PRESIDENT ALIYEV REVIEWS ENERGY AND REGIONAL

C O N F I D E N T I A L SECTION 01 OF 06 BAKU 000689 SIPDIS SIPDIS DEPT FOR EUR/CARC E.O. 12958: DECL: 05/31/2017 TAGS: PREL PGOV ENRG MASS PBTS KDEM IR RU AJ SUBJECT: PRESIDENT ALIYEV REVIEWS ENERGY AND REGIONAL SECURITY; SAYS AZERBAIJAN NEEDS SECURITY GUARANTEES REF: A. STATE 68180 ¶B. BAKU 647 Classified By: Ambassador Anne E. Derse per 1.4 (b,d). ¶1. (C) Summary: In a May 29 meeting with visiting OVP Deputy Assistant for National Security Affairs Joseph Wood and the Ambassador, President Aliyev reviewed prospects for new southern corridor energy initiatives. Urging the U.S. to support new Turkmen President Burdimuhamedov, Aliyev said Azerbaijan is slowly rebuilding its relationship with Turkmenistan in hopes of orienting it toward the West. Aliyev believes that Turkmenistan will join the East-West energy corridor once Azerbaijan begins exporting gas to Europe. Aliyev affirmed Azerbaijan's intent to export gas to Europe, but said it needs more time to develop its resources. He also said that SOCAR had begun discussions with Turkey on a gas transit agreement and continued U.S.-Azerbaijani cooperation would be key to moving this project forward. ¶2. (C) Summary Continued: Characterizing Iran as "very dangerous and unpredictable," Aliyev said that "any interference in Iran will have implications for Azerbaijan." To counter the risks posed by its proximity to Iran, Aliyev said that Azerbaijan needs "more integration into Euro-Atlantic structures" and "security guarantees, just in case." While Aliyev affirmed Azerbaijan's commitment to political reform, he blamed deteriorating media freedoms on "certain persons who are journalists" who use the media to "insult, violate and attack others," and said that those officials who have been insulted need to defend themselves. Aliyev complained that Ukraine and Georgia have similar problems and are cited as models of democracy, yet Azerbaijan is held to a different standard. End summary. US-Azerbaijan Relationship -------------- ¶3. (C) In a May 29 meeting with President Aliyev, Deputy Assistant to the Vice President for National Security Affairs Joseph Wood conveyed the Vice President's warm regards to President Aliyev. The United States recognizes that Azerbaijan's strategic choice to integrate with the West entails risks, and appreciates Azerbaijan's courage and leadership in the region. ¶4. (C) President Aliyev responded that he is very satisfied with the bilateral relationship. Azerbaijan and the United States are working as "real partners," particularly in the fields of energy, security and regional development, all of which are strongly inter-related. Azerbaijan's strategic choice is clear, Aliyev said; Azerbaijan wants to become a "model country," well-integrated into the Euro-Atlantic structure. Its policy is open, straightforward and clearly indicated by its concrete actions. Aliyev noted that the level of US-Azerbaijan cooperation is higher than our public statements or protocol arrangements may indicate; the proof, he said, is in the concrete results achieved by the partnership. Turkmenistan and Energy -------------- ¶5. (C) Aliyev said that Foreign Minister Mammadyarov's May 23 visit to Turkmenistan was successful. Noting that Azerbaijan had "no relationship" with former President Niyazov, Aliyev said that communications with new Turkmen President Burdimuhamedov had started a few months ago, when Burdimuhamedov phoned Aliyev and expressed his willingness to engage, a move that Aliyev characterized as a "good sign." In spite of this positive gesture, Aliyev said that Turkmenistan continues to send diplomatic notes of protest regarding disputed Caspian oil fields. Nevertheless, Aliyev believes that Burdimuhamedov is "more realistic" than Niyazov and understands that Turkmenistan needs partnership, not isolation. "We need to support him," Aliyev said. (Foreign Minister Mammadyarov provided Wood further detail on recent, positive engagement and next steps with Turkmenistan, septel.) ¶6. (C) Azerbaijan's example, Aliyev continued, is a good signal for those who are "hesitant and under the influence of regional powers." The recent, dueling energy summits in Poland and Kazakhstan were a clear indication of the current state of regional politics. While Poland and Azerbaijan had BAKU 00000689 002 OF 006 been planning the Krakow Energy Summit for several months, Aliyev said that Putin had organized the Kazakhstan Summit "at the last minute." Yet what Azerbaijan has managed to achieve -- specifically saying "no" to Russian gas -- showed that it is possible to promote a country's national interests in the face of Russian pressure. If Turkmenistan follows the same model, Aliyev said, there will be positive results. If not, Turkmenistan will be "100 percent dependent on Russia and will lose money and political advantages." In that case, Aliyev continued, Turkmenistan will continue to be a "semi-colony of Russia." This is "their choice," Aliyev said, but Azerbaijan is willing to orient Turkmenistan in "our direction." ¶7. (C) In response to a question from Wood, Aliyev said that he believes it is premature to engage the Turkmen leadership in a discussion of the Petronas deal. During his May 23 trip, Foreign Minister Mammadyarov had only "modest" discussions on this issue with President Burdimuhamedov. Aliyev commented that this is the right approach, as Azerbaijan first needs to build confidence with Turkmenistan and then engage on sensitive issues. He added that Foreign Minister Mammadyarov had asked Burdimuhamedov to reopen the Turkmen Embassy in Azerbaijan. Once Turkmenistan does so, then Azerbaijan hopes to engage in energy-related discussions. Some of Turkmenistan's resources, Aliyev noted, logically should be exported through Azerbaijan. However, Turkmenistan should not believe that the development of Caspian gas resources depends on it alone; Azerbaijan, Aliyev said, has gas reserves of 1.2 trillion cubic meters in the Shah Deniz field, and 300 billion cubic meters in the ACG field, and there could be still more gas. Gas to Europe -------------- ¶8. (C) Azerbaijan can be a reliable supplier of gas to Europe, Aliyev said; it "just needs time." Noting that Azerbaijan had provided 1.3 million cubic meters to Georgia per day when Russia cut its gas supplies to Georgia, Aliyev said that experience had proven that Azerbaijan can both "live without Russian gas and help our friends." Now that Azerbaijan's Shah Deniz gas field is producing, Georgian President Saakashvili had asked Aliyev to resume gas shipments to Georgia. Aliyev said that Azerbaijan had resumed shipments, and that Georgia is now receiving 1 million cubic meters from Shah Deniz and 1.3 million cubic meters from SOCAR's fields. Georgia, Aliyev said, can now "forget Gazprom" because Azerbaijan had helped it attain a stronger position vis-a-vis Russia. ¶9. (C) Azerbaijan will be a gas supplier to Europe, Aliyev affirmed. We will have enough gas, but we need time to develop more. If Turkmenistan joins, the South Caucasus region could be a serious competitor to Gazprom. Aliyev said he believes Turkmenistan will join the East-West transit corridor when Azerbaijan starts supplying gas to Europe. Aliyev noted that the Hungarian Foreign Minister had been in Azerbaijan recently, and had been briefed on Azerbaijan's approximate production profile. He said that Azerbaijan previously had not been part of the Nabucco gas pipeline discussions, but now that Iranian gas was "out of the question," and Turkmen gas was "under question," Azerbaijan is exploring the possibilities for Nabucco. However, Azerbaijan will not be prepared to join Nabucco under the current timelines, Aliyev said. Until 2012, Azerbaijan's Shah Deniz gas will go only to Turkey and Greece. Shah Deniz production, Aliyev continued, depends on BP and "we don't have a lot of leverage." Aliyev said that Azerbaijan needs to increase its own gas production. To that end, he has instructed SOCAR to increase production to 8 bcm and "probably more" in later years. Right now, however, Aliyev said that Azerbaijan cannot guarantee production. Azerbaijan also wants to be a Nabucco shareholder, an idea that Aliyev said the Hungarians accept. He said that he has spoken to OMV, EC Commissioner Ferrero-Waldner and the Romanians about this. Aliyev noted that the Nabucco project depends on supply; construction is linked to proven reserves. Nabucco needs partners with proven resources in order to attract the necessary investment. He noted that the Nabucco project is relatively new to Azerbaijan; it is good news but Azerbaijan nevertheless needs to adjust and plan its long-term production. BAKU 00000689 003 OF 006 ¶10. (C) Turning to Trans-Caspian energy issues, Aliyev said that May 19 energy summit in Kazakhstan "doesn't mean anything" and was a "public relations framework." He said he is only a "little concerned" about Kazakhstan's position, which he characterized as "not very clear." Noting that President Nazarbayev tells Azerbaijan one thing, and then tells Russia another thing -- and the US something else, Aliyev added with a laugh -- Aliyev said that Nazarbayev had sent his son-in-law to Azerbaijan just after Putin's energy summit to clarify Kazakhstan's position. Aliyev said that Nazarbayev's son-in-law had assured him that Nazarbayev is a "strong advocate" for the Baku-Tbilisi-Ceyhan (BTC) pipeline and that Putin's energy summit was "just politics." Aliyev said he has "no doubts" that Kazakhstani oil will enter BTC, as Russia will not allow Kazakhstan to increase its exports through the Novorossiysk pipeline, and both Chevron and Total are interested in using the BTC pipeline. Moreover, Kazakhstan and Azerbaijan already are in discussions over tanker construction for Trans-Caspian transport. The two countries also could build a subsea oil pipeline, Aliyev noted, and neither Russia nor Iran could object. ¶11. (C) Aliyev said that SOCAR President Abdullayev had recently begun discussions with Turkey on a gas transit agreement. "We need an agreement," Aliyev said, because "Turkey wants to take all the gas and redistribute it." However, Aliyev believes Turkey's attitude has "changed a lot" and there will be "no problem" in reaching a transit agreement. The two sides simply need to coordinate efforts and plan what to do, Aliyev said, adding that the US and Azerbaijan are the two key countries in moving this and all other regional energy projects ahead. Europe and Asia, he continued, are "moved by our policy." "We initiate, produce, and build infrastructure, and they join." "The US and Azerbaijan need to coordinate what issues to raise with Kazakhstan, Turkmenistan, Turkey and Hungary; we also need to persuade the Europeans not to be dependent on Russia, and to persuade Turkey not to create obstacles, and to neutralize Russia and Iran," Aliyev said. In response to a question from the Ambassador, Aliyev said that he was not aware of plans for a July TGI signing ceremony, and questioned whether Turkey would be ready to receive gas through the SCP pipeline at that time. He noted that he had spoken to Turkish PM Erdogan just a few days ago, and that Erdogan had not mentioned the signing ceremony. Lavrov Visit -------------- ¶12. (C) Noting that Russian Foreign Minister had characterized the Krakow Energy Summit as an "anti-Russian" summit, Aliyev said that he had raised this with Lavrov during his May 21-22 visit to Baku. Aliyev said he told Lavrov that just as it is in Russia's interest to build pipelines, it also is in Azerbaijan's interest to build pipelines. Following their discussions, Lavrov had issued a statement clarifying that the Krakow summit was not "anti-Russia," a statement that Aliyev said indicated Russia recognized that Azerbaijan has its own interests and respects those interests. Aliyev said that Lavrov left Azerbaijan satisfied by his discussions, "even though he had no reason to be satisfied." In addition to energy, Aliyev said that he and Lavrov also discussed Russian broadcasting, and agreed to allow broadcasting only on a reciprocal basis. When it became clear that Azerbaijan intended to halt Russian broadcasts on its national channels, Aliyev said that Lavrov agreed to allow Azerbaijani Television to broadcast on Russian national channels in exchange for Russian broadcasts on Azerbaijani TV channels. ¶13. (C) In response to a question from Wood, Aliyev said he thinks that Russia does not have a long-term strategy. Instead, Aliyev said, Russia is using energy as a political instrument, as evident in its actions against Georgia, Ukraine, and Azerbaijan. And when Russia's policies failed, Russia's "imperialistic attitude" emerged. Aliyev said that the Russian leadership has done "bad things to destabilize Ukraine," and has tried to use energy policy to "blackmail" Georgia and Azerbaijan. Because the EU has no energy policy, Aliyev said, it too can be manipulated by Russia on a bilateral basis. Russia "thinks it can do whatever it wants," a situation he characterized as very different from the Russia of five years ago. Russia's tough, anti-Western rhetoric is growing, Aliyev said, and "tomorrow could be more BAKU 00000689 004 OF 006 than rhetoric." This anti-Western attitude is not limited to President Putin; it is shared by the broader population and is deeply influenced by the "brainwashing and propaganda" of the Russian media. The strong propaganda focus of the Russian media, Aliyev noted, was an important reason behind his decision to halt Russian broadcasts on Azerbaijani frequencies. Russian television, he said, has a strong anti-Georgian tone and sometimes a mild anti-Azerbaijani tone. With respect to the Nagorno-Karabakh conflict, however, Aliyev said the Russian media is completely pro-Armenian. Russian television, Aliyev concluded, is an ideological instrument that is being used to propagate a strong anti-Western message. Iran: Azerbaijan Needs Security Guarantees -------------- ¶14. (C) Iran is "dangerous - very dangerous and unpredictable," Aliyev said. Noting that diplomatic steps so far have not led to any changes in Iran, Aliyev sighed and said that any developments in Iran can lead to complications in Azerbaijan. Shaking his head, he added that "any interference in Iran will have implications for us." He added that military action against Iran would have serious humanitarian and security implications for Azerbaijan. For this reason, Azerbaijan tries to "minimize risks." Aliyev said that Azerbaijan needs more integration into Euro-Atlantic structures; it also needs "security guarantees, just in case." ¶15. (C) In response to a question from Wood, Aliyev said that he does not believe that Azerbaijan's growing relationship with the United States is having any impact on Iran's behavior. "Iran is ready for isolation," Aliyev said; "They have chosen isolation deliberately and it is the only way for them to survive." Iran prefers to see Azerbaijan as weak and poor, yet the reality undermines this. "Thousands" of Iranians travel to Azerbaijan - and particularly to Nakhchivan -- and they see that the situation in Azerbaijan is good and improving, relative to Iran. Yet Iran poses many problems for Azerbaijan, Aliyev continued, particularly in the areas of security and a huge, potential refugee problem in the event of a conflict in Iran. Iran has "almost 30 million ethnic Azeris," Aliyev noted, and "some very stupid politicians here advocate 'reunification.' From our position, we would be absorbed!" Turkey and Political Islam -------------- ¶16. (C) Aliyev continued that the "religious factor" is of increasing concern, although Turkey currently is of more concern than Iran. "Islamization in Turkey is very bad for us," Aliyev said, as Azerbaijan no longer has a model of secular development to follow. Aliyev said that "some forces" are trying to export religious movements from Turkey, a phenomenon he characterized as "more dangerous" than similar Iranian religious activities. Ordinary Azerbaijanis have "an allergy to the Iranian mullahs," he said, while they are more open to religious and cultural influences from Turkey. ¶17. (C) Aliyev noted that he had recently traveled to Egypt, where he was stunned to see that Egypt -- one of the most secular Arab countries in the 1960s and 1970s -- is now "completely Islamic." The Muslim Brotherhood holds 25 percent of the seats in parliament, Aliyev said, and if open elections were held today, the Muslim Brotherhood would win. Although Azerbaijan currently "does not have "problems like that, we may have them if we don't control the situation and take measures to prevent it," Aliyev said. ¶18. (C) Looking back at the Turkish experience, Aliyev noted that the Islamic movement in Turkey got its start in the early 1990s, and grew in popularity in response to the corruption problems in the secular government. "If we don't take measures today, we could have the same situation in 15 to 20 years," Aliyev said. His government sees European integration and sustainable development as the key to preventing the rise of political Islam. Aliyev said he is investing in education and sports programs to keep young people involved in secular rather than religious activities. Government efficiency also is important, Aliyev said, noting that secular Turkish politicians "discredited themselves." BAKU 00000689 005 OF 006 Erdogan is a "nice person," but he is an Islamist, which is a problem. Aliyev concluded that the rise of political Islam is a "potential problem" that Azerbaijan always needs to take into account. ¶19. (C) Turning again to internal Turkish politics, Aliyev predicted that there will be direct popular elections in Turkey which will result in the election of an Islamist president. At that point, Aliyev continued, the Turkish army will "say words," which will lead to either a coup or a civil war. Commenting that Turkey was heading into a very dangerous situation, Aliyev said that it was a mistake for Erdogan to have nominated Gul; he should have nominated someone else. Media Freedom -------------- ¶20. (C) In response to the Ambassador's request that Aliyev address the current state of media freedoms, particularly with respect to Azerbaijan's commitments to democratization (ref a),Aliyev said that political reform is part of Azerbaijan's Euro-Atlantic integration policy. Political reform is included in Azerbaijan's newly adopted National Security Concept (ref b) and Azerbaijan has taken practical steps to implement its commitments, including "good successes" in its NATO and EU commitments. Azerbaijan's commitment to political reform is "unchanged," Aliyev said, and the Government is "doing everything possible to be more open and to bring relations closer with Europe and the United States." ¶21. (C) Aliyev said that he "would not link the media situation to our general political line." Asserting that Azerbaijan "doesn't have any problems with the media," Aliyev said that the current situation is due to the arrest of "certain persons who are journalists," which creates the perception of violations of freedom of speech. Instead, certain people are using the media to "insult, violate and attack" others. These people who have been attacked by the media "must have the opportunity to defend themselves," Aliyev said. Noting that he personally had issued a public appeal for a moratorium on criminal libel suits two years ago, Aliyev said this had no effect on the situation. In spite of his appeal, there were more "brutal attacks" on government officials in the media, includingon officials' family members. Azerbaijan has a ifferent mentality, Aliyev said; it is more Easten than European and, in keeping with its traditins, people defend themselves against attacks in he media. "I think this can help normalize the siuation," Aliyev said. ¶22. (C) Aliyev said tht both Ukraine and Georgia have worse human rights problems, yet they are lauded by the West as democratic examples. Although Yushchenko is a "friend," Aliyev said that he had "brutally violated Ukraine's constitution, dissolving parliament and firing prosecutors." Similarly, Saakashvili arrested opposition figures because they spoke to Ossetians. Aliyev said that one journalist in Azerbaijan has been arrested because he spoke to Ghoukassian (President of the so-called Nagorno-Karabakh Republic) and has been in contact with the Armenian Special Services. (Note: Aliyev presumably is referring to jailed editor Eynulla Fatullayev, whom the Ministry of National Security currently is investigating for alleged coup-plotting activities.) "There is a perception in the West that Georgia and Ukraine are democratic, and Azerbaijan is different," Aliyev said. "We didn't do anything different." Turning again to the current media freedom problems, Aliyev said "I personally regret that this happens. I was declared a predator, one of the ten worst enemies of the press. This is not very helpful. But if I'm on that list, it can't be any worse." GUAM Summit -------------- ¶23. (C) In conclusion, Aliyev said that it is very important for Azerbaijan and the United States to exchange views. "We need to be in close, constant contact as we consult and move forward." Aliyev noted that Azerbaijan would soon host the GUAM summit (June 18-19) and that he hoped the United States would send representatives to the summit. All four GUAM heads of state, plus several other European presidents plan BAKU 00000689 006 OF 006 to attend. Aliyev confirmed that the GUAM Secretariat would be established and said that a Georgian Deputy Foreign Minister had been selected to serve as the Secretary General. GUAM, he said, will function as a normal regional organization, with a focus on energy and transportation projects that he hopes the United States will support. Comment -------------- ¶24. (C) Aliyev was relaxed and engaged throughout this hour-long discussion and clearly relished the opportunity to share views on regional energy and security issues with Wood. This is the first time that he has explicitly articulated in Baku his desire for "security guarantees" from the United States. Aliyev's unapologetically tough stance on media freedom is consistent with what we have heard in the past from Aliyev and his closest advisors, including his Chief of Staff Ramiz Mehdiyev. Aliyev's unresponsiveness with respect to current problems with the media may be due in part to the often personal nature of press reporting here, and the strong role that personal relationships and reputations play in Azerbaijani culture and politics. It is also discounts, however, the important role that an independent, ethical and professional media must play in strengthening Azerbaijan's democratic institutions and promoting good governance. Continued high-level dialogue with Aliyev and his key advisors is essential to address this problem; we plan, as a next step, a joint demarche with like-minded diplomatic colleagues on Chief of Staff Ramiz Mehdiyev -- who told Wood on May 30, on a confidential basis, that the President is contemplating a meeting with journalists in June to discuss a program for developing the media (septel). ¶25. (U) Wood cleared this message. DERSE