U.S.-Azerbaijan Relations

U.S.-AZERBAIJAN RELATIONS

US Department of State
Sept 18 2009

Washington, DC
September 18, 2009

Thank you for that kind introduction and for organizing such an
important conference. It’s an honor to join you today, especially
Deputy Foreign Minister Azimov, Ambassador Aliyev, and my friend and
former colleague David Kramer.

I was asked to discuss the U.S.-Azerbaijan relationship in about 15
minutes. That reminds me of a story involving George Bernard Shaw,
the famous author, which highlights the challenge of brevity in
public speaking. It seems that Shaw was hosting an event one day
in London, and the first speaker came up to him and asked him how
long he should speak for. Shaw told him he should probably limit
his remarks to about fifteen minutes. "Fifteen minutes!" the speaker
replied in horror. "How am I supposed to tell them everything I know
in fifteen minutes ?" Shaw paused, and then responded: "In your case,
I would advise you to speak very slowly."

In my case, you don’t have to worry about me going much beyond fifteen
minutes, even if I speak very slowly.

Let me start by asking a simple question: why does Azerbaijan matter
to the United States? Since you’re all attending this conference, I’m
sure you already have a good sense of the importance of Azerbaijan,
but sometimes the obvious bears repeating.

The U.S. views Azerbaijan as a strategic partner sitting at the
crossroads of the Middle East, Europe, and Asia – regions whose future
will shape American interests and foreign policy for many years to
come. After gaining independence in 1991, Azerbaijan chose to open its
rich oil and gas resources to Western markets and develop commercial
partnerships with foreign investors, including U.S. companies. As a
result, Azerbaijan has emerged as a key player for diversifying and
securing global energy supply. Its pipelines have become main arteries
connecting the Caspian Sea to the West. Its commitment to building
its governing institutions and a modern economy has bolstered the
country’s stability and stimulated economic growth.

A more stable and prosperous Azerbaijan promises a more stable and
prosperous Caucasus. It promises more opportunities for peace in a
complex region. And it promises a more reliable partner for fighting
global threats – from terrorism to financial crises – which no single
nation can overcome alone.

That’s why the United States places such importance on our relationship
with Azerbaijan. We want Azerbaijan to succeed in becoming a
market-based economy and a democratic state. We want it to live in
peace with its neighbors and play a central role in bringing stability
to the region. These goals are not only in Azerbaijan’s self-interest,
but in our common interest.

My next question is then: how is the United States helping Azerbaijan
achieve these objectives? Our bilateral agenda focuses on three main
areas: security cooperation, energy, and economic and democratic
reform.

Security

In the security realm, one of our highest priorities is fighting
the threat of violent extremism. Azerbaijan – a moderate, secular
state with a majority Muslim population – has been a key ally
in this campaign. It has shared information, increased efforts to
combat terrorism financing, and apprehended and prosecuted suspected
terrorists.

As an active participant in NATO’s Partnership for Peace program,
Azerbaijan is developing multifaceted security relationships with
its neighbors in the region. It has made steadfast contributions
to NATO and coalition efforts in Iraq, Afghanistan, and Kosovo,
which, Mr. Ambassador, we greatly appreciate. In 2008, Azerbaijani
troops completed five years of service in Iraq, often serving next
to U.S. Marines. This year, the number of Azerbaijani peacekeepers in
Afghanistan doubled from 45 to 90. Azerbaijan also provides valuable
overflight, refueling, and landing rights for U.S. and coalition
aircraft bound for Afghanistan and Iraq.

While Azerbaijan has made critical contributions to international
security efforts, we recognize that the country has security concerns
closer to home. Key to long-term stability in the region is achieving a
peaceful resolution of the Nagorno – Karabakh conflict. Let me assure
you that the President and Secretary Clinton are committed to doing
everything possible to support that goal. We want to see Azerbaijan and
Armenia living side-by-side in a peace that fosters mutual prosperity.

Towards that end, we recently announced the appointment of Ambassador
Bob Bradtke as the next U.S. co-chair of the OSCE Minsk Group. Bob
brings more than 36 years of Foreign Service experience to the
position, reflecting the importance the United States places on
this process.

We hope that the recent progress made in talks between Presidents
Aliyev and Sargsian will lead to tangible results when they meet
next month. The outline of a possible settlement has been clear for
some time, though as with all things, the devil lies in the details
and further discussions will be needed to satisfy the concerns of
both sides. We trust that all parties will show the political will
necessary to close negotiations and bring the conflict to its desired
end. And we will devote considerable time and effort towards this goal.

Likewise, the historic steps being taken by Turkey and Armenia
towards normalizing relations are very encouraging. Although this
rapprochement is not linked to the Nagorno-Karabakh negotiations,
both processes are critical for resolving the long-standing problems
that have divided the South Caucasus and limited opportunities for
regional growth. Settling these disputes will open doors to new levels
of cooperation, trust, and commercial development region-wide.

Energy

Speaking of commercial development brings me to our next area of
bilateral cooperation – energy. The U.S. and Azerbaijan have a long
partnership in major strategic energy projects that have created
linkages between West and East.

This week Azerbaijan is celebrating the 15th anniversary of the
"Contract of the Century," which eventually led to the construction
of the Baku-Tbilisi-Ceyhan oil pipeline. Today this pipeline exports
about 1 million barrels of oil per day. Having also completed the
South Caucasus Gas Pipeline, Azerbaijan is now on the threshold of a
new and even more promising phase of energy sector development. The
recent signing of the Nabucco Intergovernmental Agreement was a major
milestone for opening up a new natural gas corridor to Europe. It is
important that Turkey and Azerbaijan build on this momentum and soon
reach an agreement on gas pricing, transit, and any remaining issues
needed to make the Southern Corridor a reality.

Such projects have not only unlocked Caspian energy resources for
the world, but have also fueled Azerbaijan’s economy and secured a
more independent economic future for the Azerbaijani people.

I realize that some have described U.S. and Russian energy
policies as the next Great Game in Central Asia. This depiction
is misleading. While there are always elements of competition in
energy matters, as in any commercial area, the U.S. does not believe
that energy security is a zero-sum game. We can gain more by working
together than against one another. It is our firm belief that greater
interconnectivity maximizes diverse sources and routes, ensures better
market pricing, and protects against supply disruptions, for the good
of all countries.

In that vein, we hope that Azerbaijan and its neighbors will continue
to develop their production of oil and gas. We encourage ongoing
discussions between Azerbaijan and Turkmenistan, Kazakhstan, Turkey,
and other partners to find reliable, transparent ways to help this
production reach European and other markets. And I assure you that the
United States stands ready to keep working closely with Azerbaijan,
our other friends in the region, and the private sector to strengthen
and expand global energy supply.

Economic and Democratic Reform

While several major U.S. firms, such as Chevron and Exxon, operate
in Azerbaijan’s energy industry, we’d frankly like to see more
U.S. investment in the non-oil sectors. American companies can
help Azerbaijan diversify its economy by bringing new technologies
and skill sets. I’m confident that investment will flow as long as
Azerbaijan continues its program of economic and democratic reform,
which is the third pillar of our shared agenda.

Azerbaijan has already made significant strides in improving the
country’s infrastructure and regulatory environment. These efforts
earned it the distinction of being the "Top Reformer" in the World
Bank’s Doing Business Report in 2009. Azerbaijan also became the
first country to comply with the Extractive Industries Transparency
Initiative, which sets the global standard for transparency in oil,
gas, and mining. But more work remains to implement these reform
processes and put into place the laws and institutions needed for
businesses to thrive and oil wealth to improve the lives of all
citizens.

Joining the World Trade Organization – an aspiration that Azerbaijan
has pursued and the U.S. strongly supports – promises to be one of
the fastest ways for the country to seize the benefits of foreign
markets and attract international investors. At the same time, WTO
rules require world class business standards, transparency, and a
level playing field for all enterprises – small and large.

This means tackling the problem of corruption. Transparency
International noted in its 2008 Corruption Perceptions Index that
corruption remains a serious challenge in post-Soviet states, including
Azerbaijan. Corruption effectively acts as an extra tax that weighs
most heavily on small businesses. It corrodes the rule of law and
cripples law enforcement. It robs citizens of the wealth derived from
economic growth. Sadly, corruption is a common failing of human nature
worldwide, the United States included. But a democratic government
has the responsibility to ensure it doesn’t become a failing of the
entire system by going undetected and unpunished.

And this begs the question: how do you fight corruption, as the
Azerbaijani government has promised in its National Strategy, without
an independent media that can bring problems to light? Free press
and a strong civil society are some of the most effective tools
for combating corruption and protecting our citizens. The continued
detentions of opposition journalists, as well as the blocking of Radio
Free Europe/Radio Liberty, Voice of America, and BBC broadcasts in
Azerbaijan, have raised significant concern in these areas. We’ve urged
the Azerbaijani government to consider the impact of such actions in
terms of its broader developmental and democratic goals.

Increased transparency in governance will help Azerbaijan realize
the democratic principles it endorses and economic well-being it
seeks. The United States provides technical assistance and training
to help improve public expenditure planning, enhance the capacity
of the commercial finance system, and strengthen private sector
competitiveness. Our assistance activities support election reform
and fund education for journalists. They also back NGOs that battle
corruption and help youth groups that seek to create new spaces for
democratic debate on the web. We believe that an active civil society
complements the role of government and cultivates a dynamic nation.

Conclusion

The U.S., as a strong and steady friend of Azerbaijan, is committed
to working together with the Azerbaijani government and its people
to support the development of a secure, prosperous, and democratic
state. It is increasingly obvious that Azerbaijan has become much
more than a trading stop on the Silk Road. As Azerbaijan progresses
down its chosen path of reform, its influence will continue to extend
into political, economic, and cultural spheres, and its connections
with the United States will continue to deepen.

A strong U.S.-Azerbaijan partnership is more important today than ever
before. There are significant global challenges which neither of us can
tackle alone. As with all bilateral relationships, there may be times
when our interests do not coincide. But I hope I’ve clearly conveyed
where we share common ground. Whether in the realm of security, energy,
or economic and democratic reform, we have an historic opportunity to
transform the region and help it achieve its geopolitical and economic
potential. We need each other to accomplish this extraordinary task,
and I’m optimistic that we’ll live up to the challenge.

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