RUSSIA-AZERBAIJAN RELATIONS BACK ON TRACK DESPITE

C O N F I D E N T I A L MOSCOW 000716

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/14/2018
TAGS: PREL PGOV AJ RS
SUBJECT: RUSSIA-AZERBAIJAN RELATIONS BACK ON TRACK DESPITE
IRRITANTS


Classified By: Political M/C Alice G. Wells.
Reasons 1.4 (B/D).

l. (C) Summary. After setbacks in recent years,
Russia-Azerbaijan relations -- while scratchy -- are back on
track and steadily growing. Both GOR officials and the
Azerbaijan EMBASSY characterized the relationship as "a good
partnership based on pragmatism." The February 21 Putin -
Aliyev meeting on the margins of the CIS informal summit
covered the two thorny issues -- the Nagorno-Karabakh
conflict and Russia's growing xenophobic tendency, but the
labor drain in Azerbaijan partly caused by Russia's new
immigration law was cited as another irritant in the
relationship. On Nagorno-Karabakh, the GOR has expressed
opposition to the Azeri draft to move the conflict out of the
Minsk Group to the UN. Analysts concluded that Azerbaijan's
potential to compete with Russia economically, combined with
some shrewd Azeri diplomacy, has provided Azerbaijan a level
of autonomy from Moscow unique among CIS members. End
summary.

Not Simple but Pragmatism Wins
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2. (C) MFA Azerbaijan Desk Chief Borisov told us that Russia
and Azerbaijan had developed "a good partnership based on
pragmatism and flexibility." Although bilateral trade
remains small, reaching only USD 1.7 billion in 2007, it is
steadily growing with Russian industrial machinery and Azeri
agricultural goods topping the list of trade items. He
predicted that the October 2008 presidential election in
Azerbaijan would not change the relationship, with Aliyev
sure to be re-elected with a large margin.


3. (C) Borisov argued that the Azeri leadership's obsession
with the Nagorno-Karabakh conflict colored the overall
bilateral relationship, with the Azeris often leveling
criticism against Russia's "pro-Armenia" policy. Borisov
affirmed that Russia had a "different level" of relationship
with the two countries. Noting the positive dynamics and
good working relationship among Minsk Co-Chairs, Borisov
registered opposition to the February 20 Azeri UN draft to
move the Nagorno-Karabakh conflict out of the Minsk Group to
the UN -- a point that DFM Karasin reiterated to the
Ambassador on March 14 (septel).


4. (C) Borisov said that the GOR understood Azerbaijan's
complicated task of balancing "difficult neighbors" --
Turkey, Iran and Georgia. Aliyev's support for Saakashvili
is particularly sensitive to the GOR leadership, he added.
For instance, when Aliyev refused to join in the 2006 Russian
embargo on Georgian goods, the relationship hit the low
point. Borisov dismissed the potential "trouble" created by
the ties between the Azeri Lezgin minority and their
relatives in Russia's Dagestan, saying that this was a
historic bond based on ethnicity and nothing more.

Armenia Factor
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5. (C) Azeri EMBASSY Political Counselor Elnur Sultanov
termed the bilateral relationship "good" with no particular
political obstacles other than the Nagorno-Karabakh conflict
and a few "surmountable irritants." The February 21
Putin-Aliyev meeting on the margins of the CIS informal
summit focused on the Nagorno-Karabakh conflict in the
context of Kosovo, and xenophobia in Russia. Sultanov
reported that the Azeri community in Russia experienced
xenophobic incidents on a weekly basis; Saltanov said he
avoided riding the metro alone. He attributed prevalent
social discrimination of South Caucasians to deeply-rooted
prejudice, which official rhetoric could not easily transform.


6. (C) Sultanov also noted the labor drain in Azerbaijan
caused by the 2007 Russian immigration law, which legalized
many Azeris living in Russia. With its own economic boom to
service, Azerbaijan cannot afford to lose skilled labor to
Russia.

Azerbaijan More "Scratchy" than Armenia
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7. (C) Fedor Lukyanov, Editor-in-Chief for Russia in Global
Affairs, concluded that the Russia-Azerbaijan relationship
was more "scratchy" than the Russia-Armenia relationship,
with the former competing against Russia in many areas.
Among the CIS countries, only Kazakhstan and Azerbaijan have
a chance to become an economic power of the same stature as
Russia, he added. Lukyanov maintained that despite Putin's
"generous" offer of the use of the Gabala radar station to
the U.S., the Azeris might not renew the lease -- expiring in
2012 -- to Russia.


8. (C) Aleksey Bogaturov, Dean of the Moscow State Institute
of International Relations (MGIMO),thought that Azerbaijan
has learned to calculate well -- when to approach and when to
walk away from Russia, while at all times keeping Russian
informed of their move. In turn, Putin has given Aliyev
maximum "autonomy," avoiding any kind of ideological
friction. In the absence of the China factor (unlike
Kazakhstan),Azerbaijan, in fact, has more freedom with its
Russia policy, said Bogaturov. Another Caucasus analyst,
Vladimir Degoyev echoed them, saying that Azerbaijan was not
the "best friend" of Russia but the two countries have found
a modus operandi without defining their relationship. All
noted the curious absence of the linkage between Kosovo and
the Nagorno-Karabakh conflict in GOR official statements,
saying, there was "too much Russian interest in Azerbaijan"
and the GOR could not afford to annoy the Azeri government.

Comment
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9. (C) Barring any significant changes in Nagorno-Karabakh,
we expect the status quo for many months to come, beyond the
Medvedev inauguration and Aliyev's re-election.
BURNS