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Georgia Stands With Azerbaijan: Strategic Partnership In The South Caucasus

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Authors: Aliyar Azimov and Aynur Azimzade*

South Caucasus has always been a focus of geopolitical competitions for centuries with its geo-strategic location and natural resources. The transportation and energy projects, which implemented in the region, have further increased strategic importance of South Caucasus due to being in the junction West and East in the globalized 21st century. After the dissolution of USSR two major processes occurred: 1) regional cooperation between independent states in terms of common threats and economic-political projects; 2) geopolitical interests and competition among the regional powers (Russia, Iran, Turkey) and the US and the EU.

After the disintegration of the Soviet Union, the three South Caucasus countries found themselves in a new geopolitical vacuum, which resulted in serious events also (territorial conflicts and separatism). On the other hand, this vacuum enabled two of the newly independent South Caucasus countries – Azerbaijan and Georgia – to build and maintain good neighboring relationships, to jointly implement major and strategic regional oil and gas projects (Baku-Tbilisi-Ceyhan oil pipeline, Baku-Tbilisi-Erzurum gas pipeline) without any intervention of Russia. Until 2008, Russia was a major gas supplier to Georgia. However, the August War in 2008 ended with cut off relations between Russia and Georgia. Starting from 2007, Azerbaijan has steadily been supplying the majority of Georgia’s oil and gas demand, especially after the August War Azerbaijan provided more energy flow by completely meeting its strategic ally’s energy needs.

The development of east-west energy corridor in the South Caucasus allowed Azerbaijan and Georgia to involve in the projects as the main partners and to promote the development of the infrastructure by improving the macro-economic environment and international integration. Turkey also gives support to the international projects in the region and deepening the multilateral relations between Azerbaijan-Georgia-Turkey also promotes and intra-regional cooperation and diplomatic resolutions of regional problems. This cooperation is the most functional; it is built on interdependence by trade and transportation relations.

Since 1992, political relations between Azerbaijan and Georgia has reached a high level, cooperation in all fields has become more strategic year by year, and neighborship relations are based on the principles of the strong friendship and mutual respect. Because of this, all officials in Georgia have always firstly visited Azerbaijan in their terms.

Why Georgia needs Azerbaijan?

The East-West strategic energy cooperation helped to strengthen the state independence of Georgia and Azerbaijan. The projects, which implemented and proposed to be realized, are the basis of a strong foundation for economic stability and prosperity for both countries, even for South Caucasus. Considering this fact, in 2009 Georgia was not affected by the energy crisis thanks to Azerbaijan and energy contracts for the supply of gas and oil. Georgia is especially interested in energy transportation from Azerbaijan because since the gaining independence Georgia has had a permanent and stable supply of energy which allowed industries to operate smoothly and contributed the economy of Georgia significantly by making it as a transit country.

Azerbaijan also plays a vital role in the transformation of Georgia into the EU and the development of EU-Georgia relations. The lack of stability in the Middle East increases the role of Caspian Basin not only as a significant energy source but also more secure and shortest supply route for both countries as well as for the EU. Azerbaijan-Georgia good neighborhood relations are vital for the EU in the context of east-west energy cooperation. As the EU is more interested in ensuring a reliable flow of energy resources to the Member States and cooperates with Azerbaijan and Georgia, it makes both countries to be a significant player in the projects and economically and politically powerful in the South Caucasus region.

Salome Zourabichvili’s first official visit to Azerbaijan

On 27 February 2019, newly elected Georgian President Salome Zourabichvili made her first official visit to Azerbaijan. It was a signal of Georgian administration’s desire to continue its strategic partnership with Azerbaijan. Azerbaijan is one of the biggest investors to the Georgian economy and considering large regional projects between both countries, her first official visit to Azerbaijan in the region was not surprising.

In the recent past, there was a tension between Azerbaijan and Georgia due to:

  • The monument of an Armenian separatist, who fought against Azerbaijan during the occupation of the Nagorno-Karabakh territory of Azerbaijan by Armenian military, in the Akhalkalaki region of Georgia, where ethnic Armenians live, and the participation of Georgian administration in the opening ceremony of this monument,
  • In the response of this event, protest of Baku against the unveiling of a monument to a separatist in Georgia.

For this reason, the Georgian President’s visit to Azerbaijan was of particular importance. The Georgian President knew well that Azerbaijan plays a crucial role in the energy supply and settlement of the problems in the region. At the same time, because its energy sector is dependent on Baku-Supsa, Baku-Tbilisi-Ceyhan and Baku-Tbilisi-Erzurum pipelines and Southern Gas Corridor, Georgia does not want to lose Azerbaijan as a strategic partner. Georgian President’s visit to Azerbaijan also showed that some provocations could not affect the relations between the two countries. Zourabichvili’s speech in Baku once again confirmed that Georgia always stands together with Azerbaijan on the issue of Nagorno-Karabakh by stating, “Conflicts and violation of territorial integrity are tragedies for both countries. We still fight together to restore and recognize our territorial integrity in international organizations.” The Armenian media expressed assurance that Zourabichvili would change her statement during her visit to Armenia on March 13-14.However, Georgian President protested visit to Abkhazia and South Ossetia paid by Nagorno-Karabakh separatists by stating “It is very unfortunate when delegations from Nagorno-Karabakh visit Abkhazia and South Ossetia and discuss these two conflicts as of the same type. This is very sad and painful for us. These conflicts impede the development of our region. Georgia has two occupied territories, and if we talk about the country’s interests, then one single concern for us is recognition of our sovereignty in deeds than in words.” After the meeting, the Russian newspaper “Kommersant” mentioned about the Georgian president’s visit in its article by stating, “These statements by President Zurabishvili were not seen in the Georgian post-Soviet history, because Georgia has pursued an impartial policy in the Armenian-Azerbaijani conflict till now.”

Armenia has tried to position itself as a bridge between Iran and Georgia to transport Iranian energy resources to Europe. However, in 2008, its position in the Russian-Georgian war strained relations between Georgia and Armenia. Armenia was interested in North-South cooperation in order to escape from regional isolation and to revive its economic condition. Nevertheless, newly elected Georgian President’s visit to both countries and her statements declared that relations with Azerbaijan are a high priority for Georgia and for being leading countries in East-West cooperation, Georgia has extensive interests in establishing strong friendship relations.

Azerbaijan and Georgia have been cooperating in several political and economic projects since the early years of independence. Several factors influence the dynamics of the Georgian-Azerbaijani relations in a positive way. Firstly, cooperation in transportation, energy, and economics is interdependent. Georgia’s location makes it more essential for Azerbaijan in terms of to reach European and World markets. On the other hand, Georgia has increased its economic prosperity by participating in regional projects. In 2018, Azerbaijan was a third-largest direct foreign investor (33 million dollars) to the Georgian economy, second in Georgian imports (14.4%) and third in Georgian exports (10.7%).

Another key factor in the Azerbaijani-Georgian relations is that Azerbaijan and Georgia support eachother’s positions on important issues in the international arena. Georgian officials always stress all the official statements that the solution of the Nagorno-Karabakh conflict, which occurred as a result of the occupation of Azerbaijani lands by Armenia, within the framework of Azerbaijan’s territorial integrity. 

When it comes to energy cooperation, Azerbaijani oil-gas company SOCAR is the main supplier of gas to Georgia as a reliable energy partner. Despite the gas agreement signed between Georgia and Russia in 2017, SOCAR has a large share in the Georgian energy sector. In 2018, gas transportation volume was 2.5 billion cubic meters of natural gas to Georgia. High dependence on Azerbaijani gas arose the concerns about national security, but in fact, Azerbaijan never used energy shipments as a political pressure tool. Even Azerbaijan have supplied more energy to Georgia in order to resolve energy shortages during difficult times.

S. Zourabichvili’s recent visit to Baku declared that Georgia does not want to lose its strategic ally. Because political and economic support by Azerbaijan is essential for Georgia in terms of its integration to the West. Also, because of Georgia plays a transit role between Azerbaijan and the West in the field of transportation and energy, losing this position is unacceptable for the Georgian administration.

*Aynur Azimzade is research fellow at the Institute of Caucasus studies of Azerbaijan National Academy of Sciences

Mr. Aliyar Azimov is Senior Specialist in the Institute of Caucasus Studies at Azerbaijan National Academy of Sciences. He is an honored graduate student of Pécs University. He got his Bachelor degree at Baku State University from International Relations and Economics programme. His main research fields concern on energy politics and security, international security and foreign policy issues, peace and conflictology, political economy, and internal/external affairs of South Caucasus. He is successful participator of Essay Contest, titled Russia’s actions against the Southern Gas Corridor and potential impacts in this direction, held by UNEC Research Foundation. He was honored as the best student of year in 2013 at Baku State University. Mr. Aliyar worked as a program manager at Hungarian NGO – Subjective Values Foundation. Currently, he is also External Relations Manager at Technote, which is the biggest tech media company in Azerbaijan.

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Eastern Europe

The Big Lie About Ukraine’s War

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photo © UNICEF/Anton Skyba for The Globe and Mail

Before Ukraine’s President Volodmyr Zelensky quit negotiations with Russia to settle the war in Ukraine, he told CNN’s Fareed Zakaria on 20 March 2022, “I made a point that the war in Ukraine has been lasting for eight years. It’s not just some special military operation.” Zakaria had asked him “You have said recently that Ukraine perhaps will not be a member of NATO. You have admitted that. Could that — there are people who ask, could that concession, had you made it clearly and loudly earlier, could that have prevented this war?” Zelensky’s reply said that for Ukraine to make such a “concession” — unless some NATO countries would step up to provide “guarantees” to Ukraine’s winning this eight-year war — would be unacceptable to Ukrainians, because this war had started “eight years” earlier, and they wouldn’t accept now — after Russia’s invasion of Ukraine on 24 February 2022 — a “concession” of an indispensable part of what their military has been fighting for ever since long before that, going all the way back to 2014 — virtual if not official membership in NATO, so that American missiles can then become posted on Ukraine’s border only 300 miles away from Russia’s command center in The Kremlin. That has always been Ukraine’s goal throughout this eight-year war. And for Ukraine to “concede” it to Russia now would be for Ukraine to lose what they have been waging war for eight years in order to attain. He also told Zakaria that Ukrainians would never accept any concession to Russia on what was, before 2014, Ukrainian land: Crimea and Donbass: “Any compromises related to our territorial integrity and our sovereignty … We cannot concede to it.” The NATO issue is part of that: “NATO could be a source of guarantees for Ukraine, but we are not accepted as a member of NATO, so Ukraine has to seek for other security guarantees from individual countries, that could be NATO members. That is what we are proposing, a number of leaders of world countries could be the source of guarantees for Ukraine. They could be part of this circle of powerful countries. That is what we can talk about, security guarantees for Ukraine.” His war in Ukraine is a war for “sovereignty” within the Ukraine that existed before 2014, and including Ukraine’s right to allow U.S.-or-allied missiles to be posted there within only a five-minute flight-time away from nuclear-annihilating The Kremlin. He even said that “We are running out of time. You have to admit Ukraine into NATO right now. We do not have much time. You have to accept Ukraine as a member of E.U. [as a stepping-stone to being allowed into NATO]”. In other words: Only as a temporary measure would he accept some NATO countries offering to provide “guarantees” to Ukraine’s winning this eight-year war — and he is holding the same goal now, that Ukraine’s Government has been pursuing ever since 2014.

Here is a video of the 2014 regime-change in Ukraine which had produced this war. And here is what had led up to that historic regime-change event. And here is how that historic regime-change event ultimately produced Russia’s invasion of Ukraine on 24 February 2022.

So: the Big Lie about Ukraine’s war is that it started on 24 February 2022, instead of during 20-26 February 2014. Even Ukraine’s President acknowledges that it is false. For some reason, the leaders of Ukraine’s ‘allies’ do not acknowledge it.

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Is a Marshall Plan for Ukraine possible?

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Photo: © UNICEF/Ashley Gilbertson

Reflecting on Ukraine’s future beyond the current conflict, many politicians and experts speculate about the expediency of a new Marshall Plan for the country. Although the old Plan (officially known as the European Recovery Program) was designed and implemented by the Truman administration some three quarters of a century ago, it is still considered one of the most successful large-scale projects of post-conflict reconstruction. The experience still represents a certain value today. Leaving aside the political aspects of the U.S. aid program to Europe, which is a separate subject to discuss, we will confine ourselves to some relevant technical features of this initiative.

First of all, it would be wrong to think of the Marshall Plan as some bottomless source of financial resources that poured by the United States into the economy of Western Europe. In 1948–1951, Washington invested in Europe just over $13 billion, which is about $115 to $150 billion at today’s rate. Recall that at the end of the summer the Ukrainian leadership estimated the needs for the post-conflict reconstruction of the country at $600–800 billion—by the results of the autumn hostilities with a lot of new damage inflicted upon the core economic infrastructure, these needs were to increase even more, measuring now in trillions of dollars.

Since financial resources under the Marshall Plan were distributed among 17 countries and territories, even the largest recipients did not receive much: Great Britain — 3.3 billion, France — 2.3 billion, West Germany — 1.4 billion, Italy — 1.2 billion, etc. Most of experts believe that the money received from the U.S. directly boosted the growth of European economies by about 0.5% per year on average. However, this does not mean that the Marshall Plan played a merely marginal role in the post-conflict reconstruction of Europe. The importance of the Plan was not so much in the absolute amount of aid, but rather in the fact that this mechanism helped launch the natural process of Europe’s economic revival, namely the recovery of the private sector, the accumulation of trade between European countries, the rise of national investment activity, and the establishment of new economic institutions. The Plan also acted as a kind of guarantee granted to European nations by the U.S. government, allowing the gateways to open for the flow of American FDIs into Western Europe. It also became a catalyst for the fast growth of domestic investments in most of participating countries.

Applied to the current situation, this suggests that foreign aid as such is unlikely to be the only or the main driver of the post-conflict development of the Ukrainian economy. Ukraine still needs to make decisive progress in such areas as combating corruption, the independence of the judiciary, and improving the quality of public administration at various levels. The challenge is to unleash the creative potential of the Ukrainian society and to make full use of the many comparative advantages that the nation can demonstrate integrating itself into European and global economies. In other words, any potential Marshall Plan for Ukraine is not a substitute for still incomplete domestic reforms, but only one of the possible tools to facilitate them. But just as three-quarters of a century ago, large-scale government or international aid programs should stimulate private sector investment, both external and domestic.

The source of funding for the reconstruction of Western Europe in the late 1940s – early 1950s was obvious, since the U.S. was at the peak of its economic and financial power and could therefore allocate 13 billion to European countries relatively painlessly. Moreover, a significant part of these resources was returned to the U.S. in the form of purchases of American goods and services by Europeans. Even in those days, though, Washington began to cut aid to European partners as soon as money was needed for the Korean War.

Today, the U.S. is burdened with much more serious financial problems, and one should no longer expect Washington to be that generous. Especially since the U.S. has already taken the lead in providing unprecedented military and technical assistance to Kiev. Given the importance of Ukraine to the states of the EU, it would be logical to assume that Brussels rather than Washington would be the main donor for a post-conflict Ukraine. However, today the financial standing of the European Union, including Germany as the main potential sponsor of the new Marshall Plan, leaves much to be desired.

Perhaps, architects of a new Plan could rely on the reserves of the Russian Central Bank, frozen by the West after February 24, 2022. Making a decisive move from freezing to confiscation is not yet possible, but it will probably be done in the end. However, there are many other contenders for these Russian funds. For example, countries that have sheltered Ukrainian refugees, as well as those most affected by the sanctions war with Moscow, would like to receive financial compensation. So, in fact, $300 billion of frozen Russian reserves is not a bottomless pit where you can get money at will. Even if all of this money ends up in Ukraine, it is not likely to cover all the costs of the post-conflict reconstruction.

Only in case of complete and unconditional surrender of the Kremlin could it be possible to pull significant funds from Russia to add to the declared level of $600–800 billion. Today, such a surrender does not look as a likely outcome of the conflict. However, if we assume a scenario of such surrender for a moment, we then have to conclude that a depleted and bloodless Russia, capitulated to the Collective West, simply won’t have the necessary resources it could promptly transfer to the reconstruction of Ukraine. Paying reparations has never been easy. For example, after the end of World War I, Germany could not pay its war debts to the victorious countries in full as late as the end of the Weimar Republic, and in 1933 the Third Reich simply unilaterally refused to pay any further reparations afterwards.

Apparently, Ukraine’s recovery will take a long time under any scenario for the end of the crisis. It might go faster in agriculture, in residential construction or in services, it is likely to go slower in heavy industry and in hi-tech. In the case of Ukraine, it is probably not quite correct to talk about “recovery”, because the task will not be to return to the old economic structure that the country had in the beginning of the century, but to create an entirely new economy, which could organically fit into the international (global, not just European) division of labor of the mid-21st century. In this process, the role of external sources of funding will be significant, although not decisive. Much more will depend on the strategic economic decisions made in Kyiv, as well as on the long-term vision that the European Union might or might not develop regarding a unique future role of Ukraine in the Forth Industrial Revolution, which is already sweeping across the continent.

Another feature of the Marshall Plan should be noted. The program was launched two years after the end of World War II, when not only the military actions in Europe were completely stopped, but the post-war European order was defined as a whole. If we draw an analogy with the present, a successful Marshall Plan for Ukraine can also be possible only once the conflict is over and when minimal stability is restored on the European continent. This, in turn, means that each new day of the conflict results in new human casualties and causes greater damage to the Ukrainian economy, pushing the prospect of the beginning of the post-conflict reconstruction farther away.

From our partner RIAC

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Azerbaijan is to open an embassy in Israel: timely or little late?

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Image source: twitter @GeorgeDeek

Time to open that bottle!” tweeted with joy George Deek, Israel`s Ambassador in Azerbaijan on November 18, by posting a photo of wine flanked by the flags of the two countries. What lit him up was the decision of the Azerbaijani parliament to (finally) open an embassy in Israel.

The joy was shared by Israeli officials and media outlets: for instance, Prime Minister Yair Lapid praised the decision, calling Azerbaijan “an important partner of Israel and home to one of the largest Jewish communities in the Muslim world”. The Jerusalem Post, in its turn, referred to Azerbaijan as the first Shiite country to open an embassy in Israel.

The two countries have established and been successfully leading one of the unique, if not strange, case of partnership since the early 1990s: a Shiite Azerbaijan plays an incredible role in the energy security of the Jewish state surrounded usually by antagonistic states: according to some estimates, Israel receives 40-50% of its oil imports from Azerbaijan.

Another, no less important, director of the bilater relations is security-oriented. Israel has managed to become the largest supplier of weapons to Azerbaijan. SIPRI estimates that some 60% of Azerbaijan’s defense imports in 2015-2019 originated in Israel, while in 2020, that number jumped to almost 70%. This partnership benefited Azerbaijan, who successfully used the Israeli-manufactured state-of-the-art military technology during the 2020 Karabakh war to defeat its arch-nemesis Armenia and liberate the formerly occupied territories. The contribution of Israel to the historic triumph was acknowledged both by political elite and general society in Azerbaijan: seeing Israel flags, along with Azerbaijani and Turkish ones, across the entire country is therefore not uncommon nowadays.

Last May, amid regional tensions with Iran, reports emerged on Azerbaijan buying Iron Dome missile defense batteries. Then in October 2021, Azerbaijan reportedly considered buying Israel’s Arrow-3 missile defense system. Neither Israeli authorities nor Israeli defense firms commented on the news.

Another sign of deepening ties and mutual trust came to light lately when the Israeli government approved an emergency plan to receive Jews fleeing from Russia. The plan involves possible transition camps for Russian Jews in Finland and in Azerbaijan ahead of their arrival to Israel.

Add to this, Azerbaijani-Jewish diaspora who naturally forges the warm relations between the two countries. While the Jews were persecuted, oppressed and driven out both in Christian and Muslim worlds in the Middle Ages, Azerbaijan always served as a safe haven for them: an all-Jewish town just outside of Baku, Azerbaijan`s capitol city, Red Town is home to at least 4,000 people and is sometimes referred to as Jerusalem of the Caucasus. This fact also boosts the image of Azerbaijan as a reliable and amicable land in the Jewish perception. According to historians, the indigenous Mountain Jews have been living in geography for at least 2,000 years. A unique sub-group of the Jews, they now protect the interests of both Azerbaijan and Israel.

Despite the nearly perfect ties between the two countries, Azerbaijan had for decades avoided opening an embassy in Israel, although the latter has been diplomatically represented in Azerbaijan since 1993. The reason could be related to the assumption that such a move could alienate the huge Muslim world, most of whose members had been quite hostile towards Israel. However, things started changing with the signing of the Abraham Accords. The thaw between some Gulf countries and Israel heralded a new era in the Middle Eastern geopolitics and Azerbaijan had to rethink its relevant policies.

The signs of Azerbaijan`s intention to finally set up a mission in Israel had been observed for some years until when Baku opened Trade and Tourism Representative Offices in Tel Aviv in the summer of 2021.

While elevating its diplomatic presence in the Jewish state, Azerbaijan, known for its skillful balancing, did not forget Palestine and passed a parliamentary resolution on opening a representative office in Ramallah as well.

Yet, Azerbaijan`s historic decision amid its tensions with Iran and the comeback of Netanyahu, who is expected to resume Israel`s assertive policy especially in the Iran direction could not be only a coincidence. Intriguingly, in early October Israel`s Defense Minister Benny Gantz paid a visit to Azerbaijan, where he met not only his counterpart but also Azerbaijan`s president Ilham Aliyev. This visit overlapped with the attempts of Israel and Turkey to finally overcome their past disagreements and open a new chapter in the relations, something the Azerbaijani side had for years desired for and worked on.

It can be predicted that Azerbaijan`s foreign policy priority for the next period will be focusing not only on cementing bilateral ties with the Jewish state, but helping to establish what some Azerbaijani experts see as Azerbaijani-Israeli-Turkish triangle, a geopolitical constellation, which would also determine the regional picture in the coming years.

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