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Energy-rich Azerbaijan is trying to preserve its neutrality, although the country recently became an ally of Moscow. Baku suspended all flights to Russia, but did not impose any sanctions on the Russian Federation. Can the Caucasus nation benefit from such a balancing act in its foreign policy?
Two days before Russia launched its invasion of Ukraine, Azerbaijan’s President Ilahm Aliyev came to Moscow to meet with the Russian leader Vladimir Putin and sign a declaration of allied interaction between the two countries. Russia is now an ally of both Azerbaijan and its archenemy Armenia. Baku, on the other hand, is an ally of both Russia and its frenemy Turkey.
Moscow and Ankara play the role of major foreign actors operating in the South Caucasus. After the 44-day war between Azerbaijan and Armenia, almost 2,000 Russian troops have been deployed to Nagorno-Karabakh – internationally recognized as part of Azerbaijan, although it was under Armenian control for more than two decades. As a result of the conflict, Baku restored its sovereignty over large portions of the region, as well as over surrounding territories, and Russia and Turkey opened a joint military facility in Nagorno-Karabakh to help monitor the ceasefire. In spite of that, sporadic clashes along the border between Armenia and Azerbaijan continue to this day.
That, however, does not mean that the Russo-Ukrainian war will spill over into the Caucasus. Presently, both Yerevan and Baku seek to normalize relations, although the process seems to be rather slow. Azerbaijan, for its part, is building a 110-kilometer (68-mile) railway line to the border with Armenia, which is part of the Nakhchivan corridor, also known as Zangezur corridor. According to numerous deals made between Putin, Aliyev and Armenian Prime Minister Nikol Pashinyan, Yerevan is obliged to build a 43-kilometer (26-mile) section of the corridor in Southern Armenia, which will allow Azerbaijan to have a land connection with Turkey, and also with its exclave Nakhchivan. At the same time, the project will allow Armenia to have a connection with Russia, through Azerbaijan’s territory. Yerevan, however, would prefer to have a link with Russia through Georgia, namely via the North-South road corridor. For Baku, the Nakchivan corridor seems to be a top priority.
But is the Nakchivan corridor a new route for the Chinese Belt and Road Initiative?
“It is not yet, but it may be”, Azerbaijan’s Deputy Foreign Minister Elnur Mammadov told Tsarizm in an interview, pointing out that all countries in the region will benefit from this project.
According to Mammadov, Azerbaijan is expected to complete its section of the corridor by the end of 2023. Moreover, Baku continues to build other infrastructure facilities in the region, namely airports.
“We have already completed the construction of Fuzuli International Airport, and we are building two more airports in Karabakh”, Mammadov stressed.
Besides infrastructure, Azerbaijan aims to turn the mountainous region into a “green energy zone” where foreign corporations such as BP and Masdar from the United Arab Emirates plan to build solar power plants. Such actions are part of Baku’s long-term strategy to increase its renewable capacity to 30 percent by 2030. According to the country’s energy officials, the more renewables Azerbaijan produces, the more gas it will be able to export.
Oil and gas account for around 80 percent of the country’s exports and a staggering 37 percent of total GDP. Turkey is one of the largest buyers of Azerbaijani gas. In 2021 Ankara imported 8.5 billion cubic meters from the Caucasus nation, and this year Baku plans to increase its export, especially to the EU market. however, that does not mean that Azerbaijan can replace Russia as Europe’s major supplier of natural gas, at least in the foreseeable future.
The very fact that the European Union has recently allocated a two billion euro financial package to Azerbaijan suggests that Brussels has long-term plans with Baku. Both Azerbaijan and Russia are competing for the European gas market, but the new geopolitical reality could result in significant changes in the Caucasus.
For now, Azerbaijan is expected to continue balancing between Russia, Turkey, and the European Union, but if Putin’s military campaign in Ukraine results in a defeat of the Russian Federation, Baku will likely try to distance itself from Moscow. Even though Russia and Azerbaijan are now de facto allies, it remains unclear if Baku plans to ratify the declaration Putin and Aliyev signed. For now, the document will remain a dead letter, and the energy-rich Caucasus country will unlikely rush to make any new deals with the Kremlin, especially in the light of Russia’s growing isolation in the global arena.
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