Identifier
Created
Classification
Origin
08BAKU920
2008-09-26 13:13:00
CONFIDENTIAL
Embassy Baku
Cable title:  

SCENESETTER FOR THE DEPUTY SECRETARY'S VISIT TO

Tags:  OTRA NEGROPONTE JOHN AJ 
pdf how-to read a cable
VZCZCXRO2512
OO RUEHAG RUEHROV
DE RUEHKB #0920/01 2701313
ZNY CCCCC ZZH
O 261313Z SEP 08
FM AMEMBASSY BAKU
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0071
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUCNMEM/EU MEMBER STATES PRIORITY
RUEHAK/AMEMBASSY ANKARA PRIORITY 3024
RUEAIIA/CIA WASHINGTON DC PRIORITY
RUEHNO/USMISSION USNATO PRIORITY 0809
RHEHNSC/NSC WASHDC PRIORITY
RUEHVEN/USMISSION USOSCE PRIORITY 1106
RUEKJCS/JOINT STAFF WASHDC PRIORITY
RHMFISS/CDR USEUCOM VAIHINGEN GE PRIORITY
C O N F I D E N T I A L SECTION 01 OF 04 BAKU 000920 

SIPDIS

FOR THE DEPUTY SECRETARY

E.O. 12958: DECL: 09/25/2018
TAGS: OTRA NEGROPONTE JOHN AJ
SUBJECT: SCENESETTER FOR THE DEPUTY SECRETARY'S VISIT TO
AZERBAIJAN

Classified By: Ambassador Anne Derse for reasons 1.4 (b) and (d).

C O N F I D E N T I A L SECTION 01 OF 04 BAKU 000920

SIPDIS

FOR THE DEPUTY SECRETARY

E.O. 12958: DECL: 09/25/2018
TAGS: OTRA NEGROPONTE JOHN AJ
SUBJECT: SCENESETTER FOR THE DEPUTY SECRETARY'S VISIT TO
AZERBAIJAN

Classified By: Ambassador Anne Derse for reasons 1.4 (b) and (d).


1. (C) SUMMARY: Your visit comes as the Russia-Georgia
conflict continues to unfold, with critical and sensitive
ramifications for Azerbaijan. Baku quietly supported Georgia
from the start, providing immediate assistance to Tbilisi in
the form of food and other commodities, financial aid to
banks, energy, and engineering services to the railroads.
President Aliyev, however, has been sharply critical of
Georgian President Saakashvili, calling his actions vis-a-vis
Russia "irresponsible" and damaging to Azerbaijan's regional
economic assets, as well as to its sovereignty and
independence. In particular, he worries about implications
for resolution of the Nagorno-Karabakh conflict and the
impact of the crisis on Azerbaijan's oil and gas production
and export plans. END SUMMARY.

CONTEXT
--------------


2. (C) Azerbaijan, in the aftermath of the August conflict
in Georgia, is a vulnerable country in an unstable region,
wedged between Russia and Iran, aiming to protect its
independence, sovereignty and territorial integrity, with
exports of nearly one million barrels of oil per day hanging
in the balance. President Ilham Aliyev, following the course
set by his father, continues the country's strategic
re-orientation toward the West. Recent events in the
Georgia, however, have made this choice more difficult to
sustain. Russia and Iran, in particular, have engaged
Azerbaijan at high levels this month, suggesting at times
increased security and energy links to sway Baku in their
directions.


3. (C) Azerbaijan, besides producing incremental, non-OPEC
oil, cooperates with the United States on regional security
-- including in Iraq and Afghanistan, and anti-terrorism
support -- and is achieving economic reforms, as outlined in
the World Bank's recent "Doing Business" report. Still, Baku
still faces challenges on corruption, democracy and human
rights. Since President Aliyev visited the United States in
April 2006, we have worked to strengthen the relationship.
Following Russia's foray into Georgia, those efforts have
intensified. As Vice President Cheney said during his timely
visit to Baku earlier this month, the U.S. has "a deep and
abiding interest" in the well being and security of

Azerbaijan, and a commitment to further strengthen our
relations for the long term.

Security Cooperation
--------------


4. (C) Azerbaijan is a steadfast partner in U.S.
counterterrorist efforts. In Iraq, 150 Azerbaijani infantry
troops have stood alongside U.S. Marines guarding the Haditha
Dam. At the NATO Summit in Bucharest in April, and again
this month in Brussels at the NAC 26 1 talks, Azerbaijan
pledged to double its peacekeeping forces in Afghanistan from
45 to 90 troops, provide new training programs, and increase
civilian support. Azerbaijan provides unlimited and
important over-flight and landing rights for Coalition
aircraft bound for Iraq and Afghanistan, as well as strong
information sharing and law enforcement cooperation in
fighting terror.


5. (C) Security cooperation is one of the strongest aspects
of our bilateral relationship, and is even more important in
the aftermath of Russia's military action in Georgia. In
your meetings with President Aliyev and senior Azerbaijani
officials, it would be helpful to thank them for their
support and the press the need to move forward. Azerbaijan's
leadership remains focused on the Nagorno-Karabakh conflict.
Azerbaijan's leadership has indicated at all levels that Baku
wants to purchase U.S. military equipment and arms.
President Aliyev and others will likely argue that Section
907 of the Freedom Support Act, as well as Armenia-Azerbaijan
"parity" on security assistance, restrict our cooperation and
do not reflect Azerbaijan's contributions as a security
partner, nor its legitimate defense needs. Since 2001, the
U.S. Congress has granted President Bush the authority to
wave Section 907 on national security grounds, and the

BAKU 00000920 002 OF 004


President has done so on an annual basis.

6. (C) President Aliyev and others have discussed the need
for a security guarantee from the United States. We
encourage you to sound out President Aliyev on specifics.
President Aliyev has stated that, in the newly dangerous
regional climate, Azerbaijan must minimize risks and wishes
to engage with the United States on new security
consultations. He has told USG interlocutors that
"Azerbaijan is willing to go as far as the U.S. is willing to
go" on security cooperation. Azerbaijan wants peaceful,
sustainable relations with all neighbors. In the aftermath
of the Russia-Georgia conflict, however, this balanced
approach has become more difficult to maintain.


7. (C) An agreement to consult on issues of national
security would be an approach to reassure Azerbaijan's
interests. Another would be to have strategic U.S. assets in
Azerbaijan. We could expand "gas-n-go" services for
coalition aircraft by developing infrastructure for a forward
operating location at Nasosnaya Airfield. We could also
explore the possibility of stationing an X-Band missile
defense radar in Azerbaijan. Azerbaijan was, in principle,
willing to consider joint U.S.-Russian use of the Gabala
Radar Station, and we have had exploratory exchanges on a
possible train and equip program. Yet another path we could
explore is encouraging Azerbaijan to enter into an
intensified dialogue with NATO in preparation for a future
membership action plan.

Nagorno-Karabakh
--------------


8. (C) The Nagorno-Karabakh (NK) conflict is Azerbaijan's
top domestic and foreign policy priority, and the sole issue
that unites Azerbaijani citizens across the political
spectrum. All conversations in Azerbaijan eventually turn to
NK and the adjacent occupied territories. From Baku's
perspective, any solution to the conflict must preserve
Azerbaijan's territorial integrity, i.e., NK cannot become an
independent state.


9. (C) Despite international support for the OSCE Minsk
Group (U.S., France and Russia),the GOAJ and its populace
believe the international community, including the USG,
should pressure Armenia for a solution consistent with
Azerbaijan's territorial integrity. They are increasingly
frustrated with what they believe is insufficient progress by
the Minsk Group. The Azerbaijani Government was extremely
angry over the Co-Chairs' "no" vote on Azerbaijan's UN
General Assembly resolution regarding territorial integrity
and Nagorno-Karabakh and continues to express its concerns in
public and private fora. Their concerns, though, have
subsided following Vice President Cheney's visit and
affirmation that a negotiated solution on NK "must start from
the principle of territorial integrity."


10. (C) President Aliyev remains wary of the motives of his
Armenian counterpart, but concedes that Yerevan may be ready
to discuss a deal. Likewise, Aliyev has expressed concern
about Turkey's efforts to reconcile with Armenia, noting that
any border re-opening without resolution of NK would lead to
disastrous results, including relations on energy
cooperation. On the heels of the Georgian conflict, there
may be a new opening from the GOAJ for a senior-level
dialogue to resolve this frozen conflict. If successful, the
door to cooperation and constructive U.S. involvement with
Azerbaijan will swing open.

Energy Links Azerbaijan to the West
--------------


11. (C) Azerbaijan views its energy resources as the key to
establishing strategic cooperation and obtaining political
support from Europe and the West. Azerbaijan is a crucial
link in the East-West energy corridor that aims to diversify
Europe's oil and gas supply. U.S.-Azerbaijan cooperation was
critical in realizing the Baku-Tbilisi-Ceyhan (BTC) pipeline
project, which in July 2006 delivered its first oil to
Ceyhan, Turkey. Prior to disruptions to the BTC (Turkey
explosion, the Russia-Georgia crisis and current offshore
technical glitches) volumes exceeded 800,000 barrels per day.

BAKU 00000920 003 OF 004


Plans should eventually be realized to link expanding oil
production in Kazakhstan with the BTC pipeline, initially by
tanker. Azerbaijan's ability to produce and transport
natural gas to Europe via Georgia and Turkey increasingly is
the focus of bilateral energy discussions. The significance
of these issues, particularly the need for security and
stability in the Caspian-Caucasus-Black Sea corridor, has
heightened following Russia's invasion of Georgia.


12. (C) In your meetings with President Aliyev, it would be
useful to underscore that, despite the crisis in Georgia, the
USG reaffirms its commitment to work with the GOAJ and other
responsible partners in the region to develop the next
generation of Caspian energy resources, beyond the
Baku-Tbilisi-Ceyhan oil pipeline. The USG will encourage
Georgia, Turkey and Europe to join efforts to work together
constructively on projects such as the Turkey-Greece-Italy
and NABUCCO natural gas pipelines, and will emphasize the
need for more discussion and action on infrastructure
security. The USG applauds the efforts of Azerbaijan,
Turkmenistan and Kazakhstan to develop constructive,
productive relations.

Democratic Reform
--------------


13. (C) Getting the GOAJ to undertake substantive political
and economic reform is an ongoing challenge that mirrors
difficulties in most other post-Soviet states. The USG
engages with the GOAJ all levels, arguing that our three core
interests -- security, energy and economic and political
reform -- are mutually reinforcing and interdependent. Many
in the government still have business interests and do not
perceive economic reform as serving their immediate,
personal, short-term interests. Reformers here scored a
major victory in pushing through steps that won Azerbaijan
the number one spot on the World Bank's list of global
reformers in this year's Doing Business report. The
country's October 15 presidential election presents an
important opportunity for Azerbaijan to demonstrate its
commitment to democratic reform. President Aliyev is set to
coast to an easy electoral victory. The traditional
opposition, whose support is small and declining, is
boycotting the elections claiming that the pre-election
climate does not permit a fair poll. The other candidates
participating in the election have little name recognition or
chance of garnering significant support. We hope that after
the election, President Aliyev will understand a new push for
reform.

Unprecedented Economic Growth
--------------


14. (C) With GDP growth of 25 percent in 2007, Azerbaijan
has one of the fastest growing economies in the world, driven
nearly entirely by the energy sector. The government's
economic planning and the country's judicial, regulatory and
banking sectors are still developing and face a challenge in
managing this enormous influx of revenue. The IMF reports,
however, that the GOAJ plans in 2009 to rein in the dramatic
interests in spending, common in recent years, to moderate
inflation. Corruption is pervasive, as highlighted in the
latest Transparency International Corruption Perceptions
Index. Azerbaijan rated 158 out of 189 countries surveyed.
Significant institutional reform and capacity-building are
required to manage the stable growth of Azerbaijan's economy
and to prevent Azerbaijan from succumbing to the "oil curse"
experienced by many other energy producers.

Religious Issues
--------------


15. (C) Azerbaijan is a secular Shiite Muslim country with a
significant Sunni minority. Current estimates show that
Azerbaijan is roughly 65 percent Shia and 35 percent Sunni.
Following a broader post-Soviet trend, there are a growing
number of practicing Muslims, most of whom follow mainstream
teachings and make no distinction between Sunnis and Shia.
It is still a small perception of the population -- 1-3
percent -- in the view of informed observers. There are,
however, isolated pockets of extremists fuelled by increasing

BAKU 00000920 004 OF 004


interaction with Arab, Turkish and Iranian missionaries.
Rivalry among Muslim sects and religious groupings is on the
rise. Acts of terrorism are rare in Azerbaijan but have
occurred. For example, the GOAJ is currently investigating
an August 17 bombing of a Sunni mosque in Baku that killed
three people and injured several others. Azerbaijani
citizens are free to travel abroad, and some Azerbaijanis
have accepted scholarships and other vehicles to study in
Iran, Saudi Arabia and elsewhere. The strongly secular
Government of Azerbaijan often clamps down on outward
religious activity, especially in those areas where it is
thought to be radical, and has outlawed proselytizing by
foreigners.
DERSE