10 Years of Eastern Partnership in Azerbaijan: Still a long way to go

Ten Years of Cooperation: Where Are We?

2019 marks the 10^th anniversary of the signing of the Eastern Partnership initiative with six former Soviet Republics – Armenia, Azerbaijan, Belarus, Georgia, Moldova, and Ukraine. The direction of development for Armenia and Belarus is clear: in these countries, the political establishment chose to align with the Eurasia Economic Union, as well as the Collective Security Treaty Organization, despite close cooperation with the EU. In the case of Georgia, Ukraine, and Moldova, the political elites made clear their future intentions to be part of the European Union and NATO, citing the Baltic states as a role model. For Azerbaijan, the future is more ambiguous. Cooperation with the European Union in energy and trade remains one of Azerbaijan’s policy priorities. Azerbaijan looks to the EU as a market for its resources with the hope that the EU can someday become a force to counterbalance Russia in resolving the Karabakh conflict with Armenia.

The 2017 and 2018 surveys on perceptions among Azerbaijanis found that between 40-47% of those surveyed trust the EU, while 41% of surveyed, associate peace, security and stability to the EU. Other values associated with EU in the survey included honesty (38%) and economic prosperity (26%).[1] Moreover, the Azerbaijani political establishment is always satisfied with the EU’s consistent support of the territorial integrity of Azerbaijan. The most recent statement of European Council President Donald Tusk on July 9, 2019, in Baku that “the EU supports Azerbaijan’s sovereignty, independence, and territorial integrity,”[2] proved to Azerbaijanis once again that contrary to other regional players, the EU is the most unbiased. Meanwhile, for the last twenty-five years, the EU has been an important partner for Azerbaijan, providing around €333 million in technical, humanitarian, emergency, and food assistance. EU investments of €35 billion make it the largest investor in Azerbaijan. Moreover, the share of EU countries in Azerbaijan’s foreign trade was 47%, far more than the country’s trade with CIS countries or Turkey. However, the recent political changes in EU, which include Brexit and the rising number of far-right and nationalists parties winning seats in the European Parliament has shaken Azerbaijan’s confidence in the sustainable future of the EU.

The Aftermath of Brexit and the Migration crisis: Where to Go? 

Financial problems, the migration crisis, as well as the rise of right-wing parties in Europe, sent worrying signals across the region. At the same time, the unexpected results of the UK’s Brexit referendum significantly impacted the perception of Azerbaijanis about their country’s future cooperation with the EU. Britain is a major investor in Azerbaijan, especially within the energy sector, and has played a key role as Baku’s EU champion. London has been a preeminent defender of Baku initiatives within the EU, among other things advocating for the signing of an oil contract between Azerbaijan and oil companies; the Baku-Ceyhan oil pipeline, as well the Southern Gas Corridor project that will transport gas from the Caspian Sea to Europe. Britain’s energy interests in Azerbaijan have allowed Baku, in turn, to better promote its own interests to EU members and obtain pro-Azerbaijani resolutions or statements from the EU on the Karabakh issue. Obviously, Britain’s decision to leave the EU does not mean that Baku will stop cooperating with Brussels. However, London’s absence as a major player and supporter will make it difficult for Azerbaijan to receive the same level of EU support on a range of projects such as Trans-Caspian gas pipeline from Turkmenistan to Azerbaijan and further to Europe.[3]Taking into consideration growing euro-skepticism, Baku began to explore other regional associations that could help the country cope with its economic, financial and political problems. The Eurasian Economic Union (EEU) led by Russia is viewed as an alternative center of power and gravity. Baku’s 25-year membership in another Moscow-led union – the Commonwealth of Independent States (CIS) – has not brought anything negative to Azerbaijan, while allowing the country to pacify Russian dissatisfaction with Azerbaijan’s pro-Western inclination. Although it is a weak association of countries, it has nevertheless helped Azerbaijani-Russian relations after a tense period in the early 1990s and, with its visa-free regime, addressed the problem of high unemployment in Azerbaijan by allowing for massive labor migration to Russia. Moreover, the number of remittances from Russia to Azerbaijan helped a lot to mitigate poverty in the country. The local press at some point discussed the possibility of Azerbaijan joining the EEU. However, the move would not increase the export potential of Azerbaijan since the lion’s share of the country’s exports is comprised of oil and gas, which something that is not in short supply in the EEU. Moreover, most of its energy resources are exported to European Union countries. The biggest hope of the population of Azerbaijan and its political establishment have is that someday Russia will help solve the Karabakh conflict on Azerbaijan’s preferred terms. But these hopes have gone unfulfilled thus far.  

What should the EU Strategy be towards Azerbaijan?

Security Initiatives

Looking at the efforts of the EU to integrate Eastern Partnership countries, it can be said that the main weakness is its selective approach. For instance, four out of the six countries have had their territorial integrity violated (Azerbaijan, Georgia, Moldova, and Ukraine). This needs to be addressed. However, while Georgia, Moldova and Ukraine received the full support of the EU, including their recognition that Russia committed acts of aggression, Azerbaijan does not enjoy the same status. While the EU supports the territorial integrity of Azerbaijan, the EU nevertheless has stopped short of recognizing Armenia as an aggressor. Today, neither the United States nor the EU enjoy the same degree of leverage in the South Caucasus as Russia does. Moscow has a military presence in Armenia (a military base in Gyumri); a strong economic position in Armenia and Georgia, as well as extensive level of soft power being leveraged in Azerbaijan (e.g. media, culture, the presence of Russian language schools and a university). Moreover, Russian political figures frequently visit Baku, and the Russian political establishment does not hide the future plans it has for Azerbaijan, which includes the involvement of Azerbaijan into its orbit of influence. Baku-Moscow military cooperation has also grown significantly. Over the last six years, Azerbaijan has imported about $3.35 billion in arms, 80% of which has come from Russia, including two S-300 missile systems, 94 T-90S tanks, 20 Mi-35M helicopters, and 100 BMP-3 armored vehicles. Azerbaijan has also purchased 25 Su-25 planes and 93 T-72M1 tanks from Russia’s ally, Belarus[4]. Meanwhile, following the shock of defeat in April of 2016, the Armenian side began purchasing massive amounts of military equipment from Russia to change the balance of power or deter future Azerbaijani actions. At a September 2016 military parade dedicated to the 25th anniversary of Armenian independence, Yerevan presented Russian-made Iskandar mobile short-range ballistic missiles. The appearance of Russian Iskanders in Armenia is likely to spark a new arms race in the South Caucasus and creates new challenges for security. Overall, the EU’s passive approach to address the security concerns of Azerbaijan, and its failure to take an active position in the resolution of the Karabakh conflict, encourage Azerbaijan to seek Russian assistance. Moscow is, of course, interested in prolonging the conflict and keeping both countries on edge while continuing to arm both sides of the conflict. With its soft and economic power, the EU can help Azerbaijan with reconstruction efforts; promise both countries huge investment, economic benefits and push for a peaceful resolution to the conflict.

The Baku government understands that for the foreseeable future, the Karabakh conflict will continue to be a major challenge for Azerbaijan. The conflict will also have a tremendous negative impact on the future of the country, from both a democratic and economic development perspective. The West’s disengagement from the region over the years has created a vacuum into which an increasingly aggressive Russia has inserted itself. Rather than seeking a peaceful resolution to the conflict, Moscow saw an opportunity to use the conflict to bolster arms sales and to meddle in both countries’ foreign policy agendas. Meanwhile, Azerbaijan understands that a military solution to the conflict could have a detrimental effect on the region’s development and allow Moscow to insert peace-keepers into the region. Thus, for Azerbaijan, the EaP was one of the rare political platforms where it hoped to solve the Karabakh conflict through peaceful initiatives and counterbalance the growing Russian influence. The focus of the EU should be to get more actively involved in the resolution of the long-standing Karabakh conflict and help Azerbaijan solve its security problems, which might lead to reforms in the security sectors. Unfortunately, NATO was not able to meet these goals during the years it cooperated with Azerbaijan. Moreover, NATO’s involvement would immediately irritate Iran and Russia who view NATO as a danger. Thus,  EU political and economic support for Azerbaijan in overcoming the impact of the conflict and its help in restoring Azerbaijan’s territorial integrity would go a long way in winning the hearts and minds of the public, much like it did in Georgia, Moldova and Ukraine in the past.  

The EU should understand that Azerbaijan is located in a turbulent region and is monitored closely by regional powers like Russia, Iran, and Turkey. Azerbaijan has had to take steps that would not endanger the major security interests of these countries. Any rapprochement with NATO would be viewed as a threat from the Russian or Iranian perspective. Thus, the EU’s strategy used in the Baltic states or Central European countries (linked with NATO) in the 1990s and 2000s, cannot be used in Azerbaijan. EU penetration of the region should not be paired or linked with the US or NATO. It is worth to mention, however, that trust toward NATO in Azerbaijan reflects the same perception that people have toward the EU. In a Gallup poll conducted in February of 2017, around 21% of those surveyed associate NATO with the protection of the country. 16% viewed NATO as a threat, while 44% viewed the alliance as neither a threat nor protection. It is interesting to observe that among the post-Soviet countries, Azerbaijan has the second-lowest number of people who consider NATO as a threat after Georgia (8%). Azerbaijan has the highest percentage of the population who embrace a neutral attitude towards NATO, followed by Moldova (38%)[5]. These numbers mean that a significant chunk of the Azerbaijani population remains undecided about the priorities of the country since the government has frequently changed its rhetoric from criticism of EU to almost cordial relations over the last five years.  The future policies of the EU should target these undecided people in order to win their trust and support. This category of people can be easily swung toward influences from other poles of influence such as the EEU and Russia. But beyond the above-mentioned initiatives, the EU should change its strategy toward Azerbaijan overall. The continued drift today between Turkey and the West, or between the EU and USA, Brexit, as well as the Russia-West opposition, has changed the political landscape of world politics. There is no longer a single or unanimous Euro-Atlantic community. Britain will soon play an independent role, while some EU countries have more vested interests in the region than others. The EU should prioritize a more economic, institutional, cultural or conflict mediating approach, rather than a purely political one.

Economic Initiatives

EU policy should target more economic initiatives in the country. Azerbaijan is located at the crossroads of major Eurasian land and air transportation corridors. Since gaining independence, the Azerbaijani government has actively tried to make the country a bridge between Europe and Asia. After the collapse of the Soviet Union, the European Union initiated projects to re-connect post-Soviet states with the markets of Europe and Asia. In 1993, the EU launched the Transport Corridor Europe, Caucasus and Asia (TRACECA) program as a means to spur intermodal transport initiatives. Since then, the EU has invested around $800 million into capital projects and the renovation of ports, railroads, and roads along the TRACECA corridor. By 2007, trade among TRACECA members surpassed $40 billion, while their combined trade with the EU reached $290 billion. However, starting in 2015-2016, the initiative on linking Europe with Asia was monopolized by China’s Belt and Road project, while the EU has limited its involvement. Brussel’s investments and support for the transport corridor dropped to almost negligible numbers. In fact, the EU has shown little if any interest in the newly-constructed international port of Alyat on the Azerbaijani shores of the Caspian Sea and has not championed much construction of the Trans-Caspian gas pipeline, which extends from Turkmenistan to Azerbaijan and further to Europe. In fact, EU involvement in port development would be in the interests of the EU to establish an alternative to Russia and the maritime transportation route which facilitates the export-import of good to and from China and India.

Today, Azerbaijan is at the center of three major integration initiatives/platforms —the European Union, the Eurasian Economic Union and the recently established BRI (Belt and Road initiative) championed by China. All three initiatives target Azerbaijan. Still, Baku has placed a lot of hope on the East-West corridor as the way to get closer to the EU. Thus, Baku would need greater support for its transportation initiatives and more European involvement in economic projects. Azerbaijan is currently constructing an enhanced port at Alyat “the Jewel of the Caspian”—which includes a maritime port, an international logistics Center, and a Free Economic Zone. The whole project is estimated to cost around $870 million, and it is expected to handle 10 million tons of cargo and 40,000 containers a year (with an eventual capacity of up to 25 million tons of cargo and 1 million containers). However, the country needs investments from the EU to revive the project and make it sustainable. The EU can help the region and Azerbaijan by prioritizing this transportation corridor (similar to what the EU did with TRACECA back in the 1990s); invest in making Azerbaijan a hub, and extend loans for building better infrastructure. Such help could tremendously help Azerbaijan and Georgia to build sustainable transportation corridor and catch some share of export-import goods between China and EU. Thus, the Black Sea-Caspian Sea corridor could be further revived.

Assistance with Sustainable Reforms

Finally, the most needed area of cooperation for Azerbaijan is the continuation of reforms in public administration, and assistance in establishing  more accountable and transparent governance, as well as developing the current institutions. There are also a few critical areas that require immediate attention and where EU help would be crucial. Training the new generation of public administrators is one of the most important areas for Azerbaijan. The key to success in public administration reform is education. As such, the EU should allocate more resources and help Azerbaijan to re-train its public servants to foster a new generation of civil servants. The EU already engages considerably in these activities but could do more. The number of students studying at European institutions through various EU (Erasmus) and national programs of some EU countries (DAAD, Visby) is growing but not large enough to make a significant difference in the country. Thus, the EU could prioritize several important goals and implement some programs to reach them by 2024-205. These goals could be gender equality and the increasing role of women in politics, economy and public area. Next, strengthening the legal system in the country and helping in judicial reforms would improve the legal system of the country. All these goals could be harmonized with Sustainable Development Goals (SDG) and Agenda 2030 helping Azerbaijan to reach 2030 goals with the help of the EU. Azerbaijan has done enough work on improving its management of public services. For example, the country launched a one-stop service center, has almost completely destroyed petty corruption and has facilitated the service delivery to the population. Moreover, the creation of the State Commission on Public Services helped their ability to hire qualified professionals to fill governmental jobs. However, more assistance and know-how is needed and the EU’s help in this would be crucial.

Conclusion and Recommendations

The EU should also understand that in the long run, both the population and the political establishment see their future with Europe (whether united or disunited). In building its strategy toward Azerbaijan, the EU should also look at previous strategies of the Euro-Atlantic community. Back in the 1990s, the US and the EU tried to build regional cooperation in the region. The Baku-Tbilisi-Ceyhan pipeline not only served to deliver oil from the Caspian shores to Mediterranean ports, but also to build and foster economic and political cooperation between Azerbaijan and Georgia. If we look at the strategic partnership between Georgia and Azerbaijan today, it proved to be the right decision. The Azerbaijani public and political establishment do not look at regional cooperation as a threat to their European ambitions. Instead, they see it as a chance to become more closely integrated with the EU as an entire region. Meanwhile, it should be recognized that Azerbaijan should take further steps to move closer to the EU and the international community. This includes speeding up the process of joining the WTO, continue institutional reforms, and building more strategic cooperation. However, if the EU and Azerbaijan continue to play a passive and inactive role, the moment will be lost, and Azerbaijan may fall prey to other regional centers of political gravity.