Home Azerbaijan’s Rebalancing Acts: Need for India to Gesticulate

Azerbaijan’s Rebalancing Acts: Need for India to Gesticulate

Azerbaijan pulled-out at the last minute from participating in the Noble Partner 2017- a NATO military exercise in Georgia held in August 2017. Similarly, it did not participate in another set of NATO-affiliated drills in Romania, called Noble Jump, in June 2017, despite of earlier promises that it would. Today,the country is reconsidering its existing strategic partnerships, and looking out for new prospective allies, such as Pakistan and Iran. The Aliyev regime, which has continually ruled Azerbaijan since 1993, is endeavouring to make timely foreign and domestic policy adjustments in the face of changing geopolitical reality, surge of religious hardliners on the world stage and fall in global oil prices.

Soon after getting independence from erstwhile Soviet Union in 1991, Azerbaijan established strategic-military cooperation with the US-led Western military alliance, which evolved and has got strong with time. Heydar Aliyev, the first President of Azerbaijan, pursued a foreign policy of preference for the West, although in principle it was labelled as ‘multi-vector policy’ that became a state strategy. This was a balanced and pragmatic approach that enabled Azerbaijan to establish constructive relations with Western powers, like the US, EU and Turkey, alongside wise partnerships with regional powers, like Russia and Iran. Therefore, Azerbaijan could strike lucrative deals with Big Oil and National Oil Companies, including the “Contract of the Century”, whichled to revival its domestic oil-gas industry. Over the years, the state petroleum company SOCAR transferred billions of petro-dollars to the state budget, which brought about general prosperity.

The country’s majority population speaks Azeri - a Turkic language, and belongs to Islam’s Persian Shia branch. However, it was under the Russian rule for the past 200 years until the Soviet collapse. It became one of the oldest known oil producing regions in the world, and by the early 20th century it was producing more than half of the world's oil supply. In World War II, Azerbaijan supplied 23.5 million tons in 1941, and accounted for approximately 75% of the total oil output of the former Soviet Union. Subsequently, oil production declined sharply to 39.15% in 1950, 5.7% in 1970 and 2.4% in 1980, which led to reduced investments there by Moscow. Early on after independence, i.e., in 1992 and 1993, a neighbouring country Armenia committed military aggression against Azerbaijan and occupied territories of Nagorno-Karabakh and surrounding regions, which it has forcefully held until today. The occupation comprises 20 % of Azerbaijani territory, and has created more than a million refugees and internally displaced people and ethnically cleansing the remainder. Each factor has profoundly contributed to shaping Azerbaijan’s development and traditions.

In recent years, Azerbaijan has emerged as a business-friendly destination for a range of sectors, such as agriculture, chemicals, cotton petrochemicals in addition to oil and gas. Also, it has consolidated its position as a prominent geopolitical player and an insurer of European energy security with energy pipelines, like Baku–Tbilisi–Ceyhan Oil Pipeline and Baku-Tbilisi-Erzurum Gas Pipeline, exporting millions of barrel of oil/ oil equivalent. Moreover, new pipeline projects, like Trans-Anatolian Natural Gas Pipeline, mega-infrastructure projects, like Baku International Sea Trade Port, and advanced technological projects, like Digital Trade Hub, which are on the anvil will make the country a power to be reckoned with at the international level. 

Thecontinued plunge in global oil prices since May 2014 has slowed the economic growth in Azerbaijan. With reduced foreign revenues, low public investment leading to depressed construction activity and high inflation due to large devaluation of manat, the country has got exposed to macroeconomic challenges and political instability. However, during this ongoing crisis hours, the country has shown tremendous resilience and solidarity to come on strong. In fact, the oil price crisis has been a disguised blessing for Azerbaijan as currency devaluation has opened up greater avenues for innovations in newfound sectors, such as renewable energy and cross-border freight transit.

India and Azerbaijan have age-old historical relations and shared traditions. The Ateshgah fire temple in Baku, which is a medieval monument with Devanagri and Gurmukhi wall inscriptions, is a fine example of the age-old relationship between the two countries. During ancient times, merchants from India heading towards Europe through the Silk Route passed through Azerbaijan. This established trade links between the societies of the two nations. In the modern era, Prime Minister Pandit Jawaharlal Nehru President Dr. S. Radhakrishnan, film star Raj Kapoor visited Baku. India established diplomatic relations with Azerbaijan on 28th February, 1992, and opened a resident mission in Baku in March 1999. Thereupon, the two countries have regularly exchanged visits by top officials and businessmen.  This year India and Azerbaijan commemorated the 25thanniversary of establishment of their diplomatic relations with cultural events held in New Delhi and Baku.

However, India’s neighbouring rival states, i.e. Pakistan and China, have even better ties with Azerbaijan at present as compared to India. Today, officials in Baku are taking steps to upgrade strategic-military and economic relations with Pakistan. Baku has become the ‘new Dubai’ for elites in Pakistan to hold business and other important meetings. Also, China is viewed as the next Eurasian economic giant by majority in Azerbaijan as the former has made great strides into its economy.

Hence, it is now an important question how India responds, rather initiates, its engagements with Azerbaijan on a revitalized mode. If India fails to act prudently, this will result in gifting a prospective strategic ally to an enemy state(s) in the unfolding zero-sum great game at the Eurasian theatre. 

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Hriday Sarma

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