USAID ADMINISTRATOR FORE - PRESIDENT ALIYEV

C O N F I D E N T I A L SECTION 01 OF 03 BAKU 001138 SIPDIS FOR EUR A/S FRIED; EUR/CARC E.O. 12958: DECL: 11/30/2018 TAGS: PREL PGOV NATO AJ SUBJECT: USAID ADMINISTRATOR FORE - PRESIDENT ALIYEV DISCUSS STRATEGIC DIALOGUE, ASSISTANCE PRIORITIES Classified By: Ambassador Anne E. Derse, reasons 1.4 (b) and (d). ¶1. (C) Summary: In a November 24 meeting with USAID Administrator Henrietta Fore, President Aliyev welcomed intensified cooperation with USAID, especially in five key areas: water and sanitation, agriculture, IT/telecoms, environmental remediation and anti-corruption. Azerbijan,s leadership feels under-attended economicaly and politically, based on their importance as strategic partner to the U.S. in Afghanistan and elsewhere in the region. Fore asked if a high-level Azerbaijani delegation,s traveling to the U.S. in coming weeks to engage in a broad strategic dialogue encompassing the full range of "diplomacy, development and defense" issues in our bilateral relationship would be useful (see comment/action request in para 10). President Aliyev enthusiastically agreed to the dialogue, but also took the occasion to protest Freedom Support Act Section 907 constraints and Azerbaijan's non-participation in the Millennium Challenge Account. The President repeated requests to buy U.S. defensive weaponry. Administrator Fore raised the issue of licenses for foreign broadcasters. End Summary ¶2. (SBU) USAID Administrator Henrietta Fore met November 24 with President Aliyev to discuss economic development, environmental remediation and political reform. Administrator Fore congratulated Aliyev on his recent re-election and Azerbaijan's strong improvement in rankings in the World Bank's Doing Business report. Azerbaijan's Developmental Plans -------------- ¶3. (SBU) President Aliyev noted Azerbaijan's robust economic development, which, he said, is leading to a higher standard of living, reduction of poverty and lower unemployment. Energy development, he said, is driving economic growth, but is not the only factor. Aliyev said that the GOAJ was taking additional steps, including low interest rate loans to businesses, direct subsidies for fuel and fertilizer to farmers and massive state investment in infrastructure, to advance development, improve social conditions, and generate employment. The government's message to local and foreign businesses, he said, is that Azerbaijan is a safe, stable place to invest. ¶4. (C) The President stated that, following the October 15 election, the Administration is crafting a development plan for the next five years. This plan will include a "village-by-village review," with the focus on physical infrastructure needs, clean water for every village, agricultural development, telecommunications and education. Responding to Administrator Fore's question, the President said that Azerbaijan would value the help of the U.S. Government in the areas of water supply, sanitation and environmental remediation, and IT. ¶5. (C) Administrator Fore suggested that the USG focus and support the Azerbaijan National Development Plan. The President articulated Azerbaijan,s focus on four areas of cooperation: water and sanitation, agriculture, IT/telecoms and environmental remediation. American companies, she said, could contribute further through public-private partnerships. The President agreed, noting that food security is a priority of the GOAJ, and Azerbaijan could benefit from U.S. technical assistance on environmental clean-up. Administrator Fore said that this type of technical assistance would be a good area for further co-financing, and Azerbaijani-financed U.S. technical assistance efforts. She also stated that anti-corruption issues must be incorporated in these efforts, and noted that the U.S. Customs Service and other agencies could provide training in Azerbaijan. The President indicated his interest in following up and contributing significant financial support. ¶6. (C) Noting that the GOAJ's effort to eradicate corruption in the traffic police had failed, and that "administrative measures" alone are not enough, the President said the GOAJ BAKU 00001138 002 OF 003 is "looking at what we might do on a more radical basis" with respect to corruption. He pledged to review again the US Customs and Border Patrol offer of resident Customs advisors on a reimbursable basis to assist with Azerbaijan's new customs reforms. President Complains about 907, MCC -------------- ¶7. (C) Aliyev complained, however, that Section 907 of the Freedom Support Act has not been lifted, and serves as a hindrance to further cooperation and that it had long outlived its original purpose. Moreover, Aliyev wondered aloud why Azerbaijan had not been selected to participate in the Millennium Challenge Account (MCA),while Armenia and Georgia had. "This is a matter of principle," the President said, "not of need. Why has Armenia been rewarded for occupation?" President Discusses Security Cooperation -------------- ¶8. (C) President Aliyev also requested further access to "modern, high-tech" defensive U.S. weaponry. Azerbaijan is surrounded by large, unpredictable powers, and needs to defend itself. Further, Azerbaijan wants to protect its infrastructure and routes to markets. The President said that Azerbaijan is "integrating with NATO," through the second phase of IPAP. "Israel has access to U.S. military goods," he said, while Azerbaijan can only buy from Russia, Ukraine and Belarus. Proposal for USG-GOAJ Strategic Dialogue -------------- ¶9. (C) Administrator Fore noted ongoing U.S.-Azerbaijan dialogues on security, energy, economic reform and democracy/human rights, and suggested convening a broad, multi-discipline dialogue that would encompass the full range of "diplomacy, development and defense" issues in our bilateral relationship. To initiate this effort, she asked if a high-level Azerbaijani delegation could travel to Washington in coming weeks to meet with counterparts. Aliyev enthusiastically agreed. Administrator Raises Foreign Broadcasters and Licensing -------------- -------------- ¶10. (C) Administrator Fore raised the issue of licenses for foreign broadcasters, which Azerbaijan's National Television and Radio Council has threatened to revoke. Aliyev said that the issue is "nothing personal, but legislative" and noted that "we cannot change our legislation to satisfy the needs of the foreign broadcasters." He hoped that the BBC, and Voice of America and Radio Liberty could find a way to continue broadcasting without holding a license, and suggested satellite, cable and internet services, since there was internet service in every village. The Ambassador explained that Azerbaijan's communications infrastructure was too underdeveloped for this to be a viable option. At the same time, the President said that Radio Liberty's content was "disappointing," and repeated allegations of "90 percent" of reports being anti-government. "This doesn't reflect the nature of our relationship," he said. ¶11. (C) Comment/Action Request: Embassy supports the proposal for a high-level GOAJ delegation to travel to Washington to engage on a broad range of issues, including security cooperation, and looks to the Department to issue an invitation to a delegation led by the Foreign Minister. To attract a decision-making delegation from Baku, Washington participants at the deputy secretary level would likely be needed. Embassy, based on USAID Administrator's recommendation, hopes that Negroponte, Fore, (DOD) England and Fried would host. On assistance priorities, efforts to work with Azerbaijan on environmental remediation, through the procurement of U.S. goods and services, should be facilitated. As the Administrator noted, this area has excellent prospects for co-financing. Azerbaijan,s BAKU 00001138 003 OF 003 leadership should also make calls on Congress to open up relationships. DERSE