EU-Azerbaijan: Driven by strategic importance, lacking value-based impact

The EU-Azerbaijan ENP agreement signed in 2006 was met with substantial enthusiasm from society and was followed by official statements on the commitment to integration in the EU. At that point, the three states of the South Caucasus were equally eager to become one step closer to the European club. The civil society of Azerbaijan proved its devotion to the ideas of European integration by initiating a national campaign in 2006 to include "European aspirations" in the text of the European Neighborhood Policy EU-Azerbaijan Action Plan, and by consistency in promoting liberal democracy and freedoms. It got even more inspired after initiation of the Eastern Partnership program (EaP) in 2009 and upgrading the status of the civil society's participation in the new institution - Civil Society Forum within the EaP.

The country was given a real opportunity to integrate closer into the EU through a potential Association Agreement, Deep and Comprehensive Free Trade Area (DCFTA) and visa liberalization agreement.

But eight years after Azerbaijan launched development of a new document "Strategic Modernization Partnership" with the EU, it is among the countries which will not sign an Association Agreement at the Vilnius Summit of EaP in November 2013. Moreover, in the newly presented EU integration index 2013, which measures the degree of EU integration of six states of the Eastern Partnership Program, Azerbaijan beats out only Belarus according to most indicators and ranks dead last in terms of holding elections.

Reasons of decline of interest for the EU integration

In 1993 Azerbaijan was the first of the 15 former Soviet republics to compel Russia to withdraw all its military bases from its territory. In 1994 it signed "the contract of the century" on the development of Caspian oil fields and later the development of the Baku -Tbilisi-Ceyhan oil pipeline route that put an end to Russia’s energy domination over the Caspian and South Caucasus. Both policy moves were critically important for the creation of a real basis for Western policies and the interests of the EU and USA in the region. Why is Azerbaijan - which was a key country in re-orienting of the South Caucasus to the West in the 1990s and has written EU integration as a strategic direction in terms of both security and foreign policy - not among the frontrunners in the EaP in the 2000s?  

Since the ceasefire agreement with Armenia in 1994, the negotiating process under the Organization for Security and Cooperation in Europe (OSCE) Minsk Group aegis has continued without visible success, which means harsh consequences for the Azerbaijani side, as Armenian troops occupy, according to official sources,  20% of Azeri lands and over 1 million displaced persons [1]are prevented from returning home.

Moreover, the EU has stated in its major documents related to the South Caucasus that it plays only supportive role in the Minsk Process, which means for Azerbaijan that it simply contributes to the "frozenness" of the conflict. Both the consensus-based mechanism of decision-making of the OSCE and substantial interference of the third parties in the secessionist conflicts in the South Caucasus made the resolution exceedingly complicated. There is also a difference, in terms of rhetoric and action, in the way the EU approaches the issue of territorial integrity vs. self-determination in regard to Georgia and in regard to Azerbaijan.

However, it would be unfair to conclude that there was nothing happening in EU policy regarding the Nagorny Karabakh conflict. In fact, the post of EU special representative for the South Caucasus, which is now occupied by Philippe Lefort, focuses on conflict areas and regions. Its mandate is to prevent conflicts in the region and to contribute to the peaceful resolution of conflicts, including conflicts in Georgia and Nagorny Karabakh.

Yet, this instrument has turned out to be only an auxiliary to the Minsk negotiation process, rather than leading the process of conflict resolution, or contributing substantial added value. The EU cannot become one of the co-chairmen of the Minsk group simply because it is not a member of the OSCE. On the other hand, the European Parliament (EP) did come up with several strong resolutions contributing to the formation of its image as non-partisan actor in the region, to balance perception of the Europe's stance in Azerbaijan as the pro-Armenian one. Overall, Nagorny Karabakh is one where there is a great mismatch been the priorities of Azerbaijan and those of the EU.

The other reason is that Azerbaijan is the only country of the Eastern Partnership whose economy is based on abundant oil and gas resources. Besides the features which are common to all post-Soviet states of the EaP, this one has an additional multidimensional effect on the pace and nature of EU integration.

One of the dimensions is economic integration. Azerbaijan, unlike other states of the regions, has not yet joined the World Trade Organization (WTO). While joining the WTO for other states bears obvious or not-so-obvious advantages, an oil rich state may lose one - which is building its independent economic policy based on energy. Since signing "the contract of the century" with leading Western oil companies on development of its major off-shore oil field Azeri-Chirag-Guneshli in 1994, Azerbaijan successfully utilized its natural resources for consolidation of its independence and promoting its interests through balancing powerful and ambitious actors. Azerbaijan since then has played a key role in the energy security of the US and Europe, being an alternative source of oil and now gas, developing the resources of its sector of the Caspian and inaugurating the Baku-Tbilisi-Ceyhan oil pipeline, which bypasses Russia. Similarly, not being part of any international or regional economic organization has helped Azerbaijan to make a decision, based on its interests, when choosing a gas transportation route to Europe from a new gas field Shahdeniz – first the Trans-Anatolian(TANAP) and then the Trans-Adriatic (TAP) gas pipelines, rather than the EU-backed Nabucco pipeline. As WTO membership is a necessary requirement for DCFTA this naturally delays Azerbaijan-EU negotiations on the latter.

The enormous oil revenues boosting economic growth rates, the state budget and the national self-esteem contributed to a sense of "resource nationalism" and slowed the integrationist trends of official Baku.

However, Azerbaijan's dependence on oil has been only increasing last few years, while oil production has been in decline since 2011. This signals a danger of economic decline if the country's non-oil sector does not develop rapidly. Although official numbers show that the non-oil sector's growth rate in the first 7 months of 2013 was higher (10.5%)  than that of oil sector (- 0.3)[2] , independent experts [3] consider it insufficient to compensate for emerging economic problems.

EU integration: elite disincentives versus society’s commitment 

 The need for Azerbaijan to diversify its economy has been stressed by local and international experts for years. Joining the WTO and signing the DCFTA could have stimulated development of the non-oil sector in the country, but there is one additional obstacle: The economy is exceedingly centralized and monopolized by the ruling elite, a handful of officials and oligarchs, which makes status quo hard to tackle. WTO and DCFTA, which would require a whole range of reforms, especially in the energy sector, and this might be perceived as a threat to the current equilibrium.

Similarly, other parts of the Association Agreement would require deep reforms in the area of human rights and democracy, education and mobility. According to the scarce information available, the progress in negotiations on the Association Agreement is very slow. The worsening human rights record, the number of political prisoners exceeding 100, the increasing number of laws restricting basic freedoms and making harder conditions for NGOs and journalists, repressions against political and youth activists indicate that the ruling Azerbaijani elite have little desire to shake the foundation on which its power lies.

Indeed, the EU integration index[4], which scores the performance of the six EaP states in three dimensions - linkage, approximation and EU management, shows Azerbaijan's lack of performance and motivation with its fifth place ranking among the six states. The index has also repeatedly showed a direct correlation between linkage, or the frequency and nature of communication between Brussels and Baku, on the one hand, and approximation, which is an indicator of the pace of reform, on the other. There was only one meeting on democracy and human rights issues in 2013 - of the EU-Azerbaijan sub-committee on Justice, Freedom, and Security.

There is a better performance by Azerbaijan in the sectoral dimension and energy and transport issues, but the weak and slow pace of reforms in key areas, concerning European values, confirms officially expressed greater willingness for cooperation than for integration. Thus the Strategic Modernization Pact with the EU [5]would seem to replace the Association Agreement, but Brussels rejected this opportunity, stating that negotiations would proceed in parallel to each other.

The recently released list of political prisoners in Azerbaijan by the local human rights groups [6] - 142 journalists, human rights defenders, political activists - is not only an indication of the degree of suppression of a basic freedoms in the country, but also of the strength of resistance and intensity of the struggle between the tiny ruling elite vs. the rest of society, reflecting clash between the power of money and social power. This is an important indicator of the great potential of the society to reform and its commitment to liberal values against the background of patronage boosted by oil money. Thus civil society is a true partner of the EU in the process of integration. As the recent poll by the Adam survey agency[7] in August-September 2013 showed support for EU integration among the Azerbaijani population grew substantially, reaching 64.0% in 2013 as opposed to 41.9% in 2012.  

The way forward

EaP empowered civil society through the creation of a new institution called the Civil Society Forum, which empowers nongovernmental organizations to influence their governments more effectively.

However, the nature of empowerment is also important. While becoming more specialized and professional, many NGOs, as service providers, play an auxiliary role in the cooperation with the government. The NGOs' influence on defining the strategic goals and political priorities and their role in EU integration may have diminished with the increased EU support for good governance as compared to value-oriented campaigning. Indeed, it was the non-governmental Azerbaijan National Committee on European Integration in 2006 which, as a result of a national campaign, compelled the government to include European integration aspirations in the text of the Action Plan. Civil society today is preoccupied with the routine struggle of defending freedoms while risking its own safety.

The importance of EU-Azerbaijan relations has been repeatedly stressed by EU officials. Azerbaijan borders three powerful neighbors - Iran, Russia and Turkey – and is an important neighbor and strategic partner of the EU providing its energy security and cooperating in fight against terrorism and radical Islamism. Yet, due to Baku's worsening human rights record there is a widespread perception in society that the EU reform agenda is less important for Brussels than its own energy interests. In addition, the "caviar diplomacy"[8] abroad seems to help the current political elites to preserve its status quo.

This controversy of EU-Azerbaijan relations climaxed with the October 9, 2013 presidential elections. While OSCE/ODIHR mission of observers came up with a critical assessment[9], saying the polls did not correspond to international standards and finding violations in more than a half of the observed polling stations, in striking contrast a group of MPs of major European organizations - EU and the Council of Europe - were much softer in their assessment[10]. This might be one of the external keys to understanding the low efficiency of the European policy in oil-rich Azerbaijan.

One dimension, however, can be considered beneficial and could be viewed as success for all parties concerned - the EU, the Azerbaijan government and Azerbaijan society - the visa liberalization agreement, which is to be signed in Vilnius. While one can argue about why the government is interested in simplifying travel to and from the EU, the effect of this opening might be critical for all dimensions of integration - economic, political and cultural. It will contribute to an open society, to promotion of values and ideas and indirectly - to the promotion of change.

To this end, as the EaP road map to Vilnius Summit  monitoring project led by PASOS (Policy Association for an Open Society[11]) says, participatory policy-making in Azerbaijan should be a priority, which means greater transparency of negotiations and more active participation by the EU delegation in dialogue with the authorities and civil society. Along with a principled approach to important institutions, such as elections, human rights and respect for freedoms, this might lead to increased value-based impact.

More articles:

• Introduction. The South Caucasus on the crossroads: Where will the road to Vilnius lead?
• Giragosian, Richard. "Armenian-EU integration: Missed opportunities & strategic mistakes"
• Haindrava, Ivlian. "Reaching out to the Abkhazians and Ossetians through the EU"
• Iskandaryan, Alexander. "Choosing between the EU and Security"
• Kochladze, Manana. "Last but not least: the Sustainable Development - the challenge to the Eastern Partnership"