LOOKING TO ARMENIA,"AZERBAIJAN NOW SYMBOL OF

C O N F I D E N T I A L SECTION 01 OF 05 BAKU 000277 SIPDIS SIPDIS BAKU 147 E.O. 12958: DECL: 03/04/2018 TAGS: PGOV PREL AJ TX AR ENRG SUBJECT: LOOKING TO ARMENIA,"AZERBAIJAN NOW SYMBOL OF DEMOCRACY IN CAUCASUS" SAYS PRESIDENT Classified By: Ambassador Anne E. Derse, reasons 1.4 (b,d) ¶1. (C) SUMMARY: A clearly pleased President Aliyev branded the recent Armenian Presidential elections "a fraud," the incoming and outgoing Armenian President "criminals," and said that the sham elections and subsequent violence, where the Armenian government was forced to kill its own people, all showed the depths to which Armenia had sunk. He asked why the US and the international community has remained silent about both the elections and the post-election violence. He denied Azerbaijani initiation of hostilities across the line of contact, pointing out that any such action would not be in Azerbaijan's interest as it would only consolidate a weakened Armenia. On energy, he said he would try to reach out to the Turkish Prime Minister in order to solve the gas transit impasse, and called for continued US leadership in revitalizing the Nabucco project, offering to host a conference in Baku. DAS Bryza explained that USG non-support of Azerbaijan's draft UN resolution did not indicate lack of strategic partnership between the two countries. Aliyev asked that the US not seek to dissuade GUAM members from supporting the resolution. END SUMMARY ¶2. (C) On March 5 DAS Bryza and Ambassador Derse met with President Aliyev. Also present was Chief of the Presidential Apparat's Foreign Relations Department, Novruz Mammadov. Energyoff was notetaker. Armenian Rag -------------- ¶3. (C) An ebullient Aliyev suggested the discussion begin on Azerbaijan's democratic development, saying this was "easy" after the recent elections in Georgia and Armenia. Given recent developments in these countries, Azerbaijan is exemplary. It was clear that Armenia manipulated the elections: Sargsyan officially won with 52 percent of the vote, (averting a second round) but the OSCE's International Election Observation Mission's (IEOM) preliminary report stated that the vote count was "bad or very bad" in some 16 percent of the polling stations visited, i.e. Sargsyan didn't get a majority of the vote. Given that, Aliyev asked why the OSCE had declared the election "fair," and why "everyone is happy, and why everyone including Turkey is congratulating Armenia." Sargsyan didn't win. Aliyev said he expected as much. Outgoing President Kocharian "came in by force, left the country in ruins, and his hands are covered in blood." This was an important historical moment: Armenia has become "isolated, degraded; a slave to Russia and an enemy to its neighbors." Justice has been restored, and the Armenian people understand that their government leaders are criminal gangs, a mafia unable to lead the country into the future. Former President Petrossian by contrast was a wise man who sought peace with his neighbors. ¶4. (C) Continuing on the theme, Aliyev said that the government had to "shoot their own people" during the post-election protests, with at least eight Armenians dead so far. The police were the ones who had started the violence against their own people. Sargsyan was a "gangster," Kocharian a "criminal," and they both were the organizers of the Khojali massacre (of Azeri civilians by Armenian troops in 1992). The problems in Armenia are "only the beginning," and God will punish the Armenian criminal leadership. Aliyev asked why the international community was quiet about the Armenian government slaughtering its own citizens when it had been so vocal in May 2005 when Uzbek Karimov had killed Uzbek citizens in Andijan. Any government that kills its own people must be condemned. Even Georgia during the recent Presidential elections was criticized more than Armenia is being now. Aliyev complained Armenia was creating international problems through its "slavish" relations with Russia and close friendship with Iran. The Armenian people are beginning to realize that they need to change their policies, or lose their current "quasi-independence." ¶5. (C) DAS Bryza said that heretofore the USG had been careful to avoid enflaming a dangerous situation, and wanted to give him a chance to assess the situation on the ground. Preliminary assessments failed to uncover more serious procedural violations that arose later and tainted the election. Now that the violence had subsided, the USG was going to issue "sharp criticism" on both the election and the BAKU 00000277 002 OF 005 post-election violence. OHDIR was also contemplating saying that the election had been seriously flawed, Bryza noted. Line of Contact Clashes -------------- ¶6. (C) DAS Bryza said Armenia was claiming that the previous day's clashes along the Line of Contact were initiated by the attack of "several hundred Azerbaijani troops." President Aliyev said that as he had previously communicated, he had received information sometime ago that the Government of Armenia (GOA) was "preparing several scenarios" (reftel). Yesterday's clash was the GOA carrying out one of these scenarios. Aliyev said "we are happy to see Armenia weaker - frankly speaking, we want to see their society split." It was not in in Azerbaijan's interest to initiate hostilities at this time, since a GOAJ attack would only serve to consolidate, unify and strengthen Armenia at a time when Armenia was weak due to the fraudulent elections and post-election violence. As such, Azerbaijan certainly was "not looking to break the peace." "Armenia started the shooting, which happens sometimes." Although Azerbaijan did not start the hostilities, "we had to respond." There were more than ten Armenian dead, with four Azerbaijani dead, one from sniper fire. Their Defense Minister called five or six times to GOAJ Defense Minister Abiyev, saying "let's stop," so we stopped, Aliyev noted. Abiyev had called Aliyev at approximately noon on March 4 to alert him to the the clash, at which time Aliyev told him to cease hostilities. At that time, Abiyev had told him that there were two Azerbaijani soldiers dead. In response to Bryza's comments that Armenian Foreign Minister Vartan Oskanyan had told him that on March 4 at 6 PM Azerbaijan had started artillery fire, Aliyev said he knew nothing about such claims, repeating that Azerbaijan would not have been interested in seeking a fight at such a time, since it would only help a weakened Armenia consolidate - "why should we give them an opportunity? - let them drown in their own blood." (Comment: In a separate discussion with Bryza, OSCE representative Kasprzyk and the Ambassador, MinDef Abiyev said no artillery had been used. End Comment). Aliyev again denied Armenian officials comments to Bryza to the effect that "several hundred Azerbaijan soldiers" had started the hostilities by moving across a valley. He added though that "this shows that the war is not over, and today they have no chance." ¶7. (C) Aliyev said Armenia would have to find a new President, since Sargsyan was part of the violence - "the (Armenian) diaspora will have to give it some thought." Laughing, Aliyev said that "only one half-crazy journalist gets arrested in Nakhchivan" and "Ambassador Derse intervenes," yet the US remains silent in the face of what was happening in Armenia. An exultant Aliyev said that "Azerbaijan is now the symbol of democracy in the Caucuses!" It was important for the international community to express its position on the rigged election and post-election violence, otherwise "other countries will do the same and Armenia will do the same again." How can it be that a country can have a Presidential candidate under house arrest, and the international community is silent? This international silence was "strange," especially given that "Armenia is not an important country," and dependent on Russia. Finishing his musings on 'the fiasco of Armenian statehood," Aliyev said that Armenia was "losing its chance for independence." It had been selling everything to Russia even before this election, and now a "criminal gang" had "ruined Armenia's statehood dreams," leaving it a "wounded, non-democratic state with an unclear future." ¶8. (C) Bryza said he would be traveling to Armenia from Azerbaijan (via Georgia) and would be issuing and would stress the need for the status quo to be restored. Aliyev confirmed the status quo ante had been restored and said "Azerbaijan would not take advantage of the situation...Azerbaijan would not start shooting but would only respond." Bryza asked Aliyev if he thought that given events in Armenia, Minsk Group negotiations would be delayed. Aliyev said that Sargsyan was not President, and meeting with him on the margins of the NATO Summit in Bucharest would constitute recognition of him as President, which Azerbaijan was not ready to do. As such, there was no one on the Armenian side with whom to negotiate for now. In response to Bryza's question, Aliyev said he didn't think it worthwhile BAKU 00000277 003 OF 005 to have a meeting of the Minsk Group Co-Chairs with the Foreign Ministers while the situation in Armenia remained unclear - "they (i.e. Armenia) must be told to leave our land," he insisted. Bryza told Aliyev that Armenian press had misquoted him, in that he had said that he "feared a pause" in the peace talks due to Armenian uncertainty, not that he "wanted a pause." Aliyev, continuing on his theme on Armenia's worsening fate, said that Armenia was "so proud of its (economic) reforms, but now the (economic) tiger is dead." ¶9. (C) In this regard, Bryza underscored USG concerns and Congressman Knollenberg (Co-Chair of the Congressional Caucus on Armenian Issues) concerns that Azerbaijan cease its "war rhetoric." Aliyev said that the GOAJ was "not saying anything now; the GOAJ statements are very mild, and only respond to what they (Armenia) say." This was an ideological and propaganda war. He repeated his invitation to Congressman Knollenberg to visit Azerbaijan. UN Resolution -------------- ¶10. (C) Referring to the GOAJ's UNGA draft resolution on "The Situation in the Occupied Territories of Azerbaijan," Bryza said we understand that Azerbaijan found itself in a good tactical position (with Armenia off-balance and Russia having pushed hard for Serbia,s territorial integrity),and was pressing its advantage at the UN. Azerbaijan has a sovereign right to fight for its interests at the United Nations. The USG objects to the text of this specific draft resolution, however, because it prejudges several elements under negotiation in the Minsk Group process. If the USG were to support the draft resolution it would violate the prime negotiating rule that "nothing is agreed until everything is agreed." Speaking as a Minsk Group Co-Chair, Bryza said he could not support the draft resolution, given its one-sidedness. Speaking as a DAS, Bryza said he would like to support the resolution to strengthen bilateral U.S.-Azerbaijan relations. He told President Aliyev that he should keep in mind that strategically speaking "there is no question" about the depth of our countries friendship and partnership on strategic issues. But, the text of Azerbaijan,s draft UN resolution was so determinative that the USG could not support it and thus had to maintain its impartial status in Minsk Group negotiations. The GOAJ should not take USG non-support of the resolution as a sign of lack of USG support for the relationship. Bryza urged Aliyev not to treat the U.S. vote on Azerbaijan,s resolution as a test of our strong bilateral relationship. ¶11. (C) Aliyev said he agreed with Bryza's assessment, adding that the USG must do what it thinks is right, each country has to pursue its own interests. "Our friendship and partnership are indeed strong. I cannot insist that you support the resolution. We'll see what happens and we'll think what to do." However, he said, he was upset that some of his GUAM colleagues weren't supporting the draft resolution, referring to what he believed was USG advice not to do so. Even though "without Ukraine the GOAJ can get more support," from a viewpoint of GUAM solidarity he was not pleased that the USG was instructing GUAM members to oppose the resolution, since at the GUAM summit all members had agreed to maintain solidarity. Bryza said there had been no instruction to U.S. diplomats to lobby GUAM member states to oppose Azerbaijan's draft resolution. Bryza said he would clarify that there are no such instructions to lobby GUAM countries in this matter. Energy -------------- ¶12. (C) Bryza said the main impetus of this current trip to Turkey and Azerbaijan was to advance the Turkey-Azebaijan gas transit agreement. On Nabucco, he termed EU Energy Commissioner Andris Piebalgs as "optimistic" and OMV CEO Wolfgang Ruttensdorfer "very pessimistic," possibly looking for pretexts to draw Iranian and Russian gas into Nabucco. In a recent meeting between Secretary Rice and Greek Foreign Minister Bakoyianni, the Greek said that since Azerbaijan had no gas, Greece would be forced to look to the South Stream Project. Bryza has talked up Azerbaijan gas repeatedly to the press. He realized that Socar was unable to sign gas BAKU 00000277 004 OF 005 supply contracts for Nabucco while Turkish transit has not yet been fixed. While in Turkey, for the first time the Prime Minister's Foreign Policy Advisor Ahmet Davutoglu and FM Babacan raised the issue of Turkish gas transit themselves, saying that the GOT needed the USG to develop a strategy to resolve the current impasse with Azerbaijan. Bryza said he feared that the gas transit issue became blocked because someone convinced the Turkish PM Erdogan to support the 15 percent netback scheme, and now everyone is scared to seek changing this position. Many, including Botas executives, are afraid of "going to jail" if they wind up supporting a gas purchase deal that in retrospect is deemed not favorable to the GOT. ¶13. (C) Bryza said that the GOT doesn't necessarily desire to be a gas broker; they are primarily concerned about securing a sufficient supply of gas at a "politically palpable price," i.e. lower than the Gazprom price. Their demand over the next ten years is expected to increase from 35 to 70 bcm/a. Bryza thought the GOT might be willing to forego their 15 percent netback scheme if they could secure a direct gas sales and purchase agreement at a "politically sustainable price." The bilateral gas transit impasse must be solved at the political level of Aliyev-Erdogan, since the people below were "frightened." If the Turkish gas transit impasse isn't solved soon, "Nabucco looks like it will die." Bryza stressed that both BOTAS and SOCAR could cite strong commercial precedents for their respective models of gas pricing. The only way to resolve this dispute would be to elevate it to the political level. ¶14. (C) Aliyev took the point, and said he would "try with Erdogan," but that any agreement must take into account not just "our friendly relationships," but also "international practices." Referring to Nabucco, Aliyev cited the Hungarian position as "very strange." He had met with the Hungarian PM for two hours during a recent state visit, during which the PM was very positive on Nabucco and Azerbaijani gas. Then the PM goes and tells the press that "Southstream will be quicker than Nabucco." "We can't work with such partners," Aliyev said. Referring to the various Nabucco participating countries, Aliyev said that "if the US doesn't lead us, it won't work." He suggested a conference of Nabucco Energy Ministers and company heads, including EU, Turkish, Georgian, Azerbaijani and perhaps Turkmen, to give impetus to Nabucco, with the US having the main role - "Piebalgs is a nice man, but he is not for this purpose." He suggested Ambassador Mann and DAS Bryza both attend such a conference. (No) Gas for Georgia -------------- ¶15. (C) Continuing, Aliyev said that gas prices are going up. Georgia is asking for more gas, but "we don't have it." If we burn mazut so that we can give the GOG gas, we will have to charge USD 300 per thousand cubic meters so as not to incur any financial losses. If te GOAJ had access to the associated gas from theACG field, "then we could charge Georgia a frienly price," such as USD 180 per tcm. Alternativel, Azerbaijan would be willing to strike a long-tem deal to sell gas at a low price if it could buy he Georgian railroad, or some other infrastructure. The Georgian PM is coming to Azerbaijan to discuss the issue. However, the GOG is also giving the GOAJ problems over the Kulavi terminal (owned by Socar). After forcing the GOAJ to include Georgian non-investing partners in the project, the GOG is now delaying the Kulavi terminal project due to problems relating to these investors. However, the GOAJ has to act in accordance with the contracts they've signed. Georgia is trying to link other issues to getting inexpensive gas from Azerbaijan, to include delays in railroad projects. Two weeks ago the head of the Georgian railroad threatened Azerbaijan that it had to provide the GOG with cheap gas or it would face problems. Aliyev asked Bryza to please tell the Georgian PM when he saw him later in the day that such threats coming from GOG officials are counter-productive and not the actions of a friend. ¶16. (C) Aliyev said Georgian Prime Minister Gurgenidze is different than his predecessor Noghaideli. He seems unaware of the history of close bilateral GoG-GOAJ relations, and unaware of the danger of these relations being undermined for commercial reasons. BAKU 00000277 005 OF 005 NEC -------------- ¶17. (C) Aliyev told Ambassador Derse that he had signed the document authorizing the Baku mayor to sign the lease "the first thing that morning," knowing he was going to see her later that day. Ambassador Derse thanked him for his help, and stressed that the whole process has to be finished by March 14 in order not to lose funding for construction in FY08. Afghanistan -------------- ¶18. (C) Ambassador Derse gave President Aliyev the non-paper with various options for contributing to the ISAF effort in Afghanistan, following up on his request of several days earlier. Comment -------------- ¶19. (C) President Aliyev was clearly pleased at the contrast provided by the recent events in Armenia, and eager to chide the US and international community for what he saw as a double standard in reacting to these events. His call for USG leadership and guidance to revitalize the Nabucco project is heartening, and Embassy will be working with Headquarters and other colleagues in the field to determine the best source of action. The news of GOAJ-Turkmenistan agreement to begin exploring work on a possible production pipeline is surprising and positive (upcoming septel relating to Ambassador Derse conversation with SOCAR President Abdullayev in this regard). END COMMENT. ¶20. (U) DAS Bryza has cleared on this cable. DERSE