Azerbaijan and the Caspian Basin: Pipelines and Geopolitics

style="color: maroon;font-family: Times New Roman;font-weight: bold;">Presentation

MOLLA-ZADE: Thank you for inviting me here to talk about Azerbaijan in the regional context, the foreign policy of Azerbaijan and issues related to oil and the pipeline. I will try to present an overview of developments in the country and in the region.
Azerbaijan, as part of the Caucasus region and Central Asia, has been over many centuries a kind of arena for confrontation and was the object of disputes and wars between many powers, especially the three regional powers, Iran, Turkey and Russia. Western players have always had an interest in the region; they came to the region for a short period of time and left it. What is known today as Azerbaijan, Armenia and part of Georgia was once a part of Iran and the Persian empire. In 1813 and later in 1828, two Russo-Iranian peace treaties were signed. As a result of these agreements (the Turkmenchai and Gulistan Treaties) what is today Azerbaijan, Armenia and part of Georgia became part of the Russian Empire. Before that, on the territory of Azerbaijan and Armenia, there were mainly khanates, the small feudal kingdoms, warring amongst themselves, such as the Baku Khanate, the Karabakh Khanate, and the Yerevan Khanate. All of them were to a certain extent controlled by the Iranian king or shah. After 1828, a new administration was imposed on the whole territory and Russian governorships were established. The main ones were Baku, Yelizavetpol (which included what is today Gyandzha and the whole of Karabakh, both lowland and highland), and the Armyanskii Rayon which was established formally in the Yerevan Khanate. In this way, in the 19th century, a new phenomenon came to the whole region: the influence of and total control by the Russian Empire.
In the mid-19th century, Baku oil was found. Many entrepreneurs from around the globe came to this city, which was small and unknown to the world, actually just an unknown town on the coast of the Caspian Sea. The period including the end of the 19th century and the beginning of the 20th is known as the oil boom. The development of Baku really began during this period; the whole downtown was built, designed by French, German and Italian architects who were invited to the city by oil barons. Most importantly, the oil boom brought cultural and intellectual development.
The liberalization of Nicholas II within the Russian Empire served to benefit many Azeris who were able to establish political parties. About 160 newspapers and magazines were published in Baku alone, and this figure reflects the intensity of political and intellectual life in Baku at that time. In 1911 the Musavat Party, the main national democratic party, was established. It actually came to power with the collapse of the Russian Empire in 1917 as a result of the October Revolution. In 1918, Azerbaijan proclaimed itself the Azerbaijan Democratic Republic, which was a very historic event for the whole Muslim people and for the whole Middle East because it was the first republic which had ever been established in the whole Middle East. Some of the political parties formed a coalition government as a result of the first democratic parliamentary elections in 1919, and the first multiparty parliament was established.
When the British General, Thompson, arrived after World War I and was sent to Baku by Allied forces, he came and said ''I am commander-in-chief. I was sent here by Allied forces, and I am going to govern, and I don''t recognize any government here.'' The leaders of the young Azerbaijan Democratic Republic, who had received their degrees from Oxford and the Sorbonne and other places (they were very fluent in English and other foreign languages), said that this was fine and that they should hold free and fair parliamentary elections and let the people choose who will govern this state. General Thompson was shocked by the liberal approach that they took, and after that he said ''I totally support your government, your ideas, and your European and liberal attitude towards the governance of the country.
This government was strongly backed by the British troops and government, and General Thompson himself was actively lobbying in the Paris-Versailles Conference for the recognition of the Azerbaijan Democratic Republic. It finally got that recognition in early 1920, including recognition that the area now known as Nagorno-Karabakh was a part of the Azerbaijan Democratic Republic, as well as the area known as Zangezur which divides Nakhichevan and Azerbaijan into two. Nakhichevan''s fate was not actually resolved, because the Ottoman troops were still stationed there, and this issue was left for the peace conferences in Lausanne and the peace conferences related to the Turkish question.
I have given you a very short historical overview. A full talk about the historical development of the region would probably take several lectures and meetings; but the importance of bringing that overview in is that the model of the Azerbaijan Democratic Republic, the secular state model, is very important for Azerbaijan today. When the Russian Empire embarked on liberalization in the Empire, this time with Bolshevik and Communist rulers, the same kind of pattern was witnessed as at the beginning of the century. Conflicts repeated themselves as a battle between Azerbaijan and Armenia and massacres involving the two ethnic groups. As you know in 1918, Armenia had been in a short war with Georgia and a longer war with Azerbaijan over the three disputed areas. Thus we see the collapse of empire and the creation of independent states amidst chaos, massacres, anti-Semitism, and all kinds of things which were common to the historical processes of the beginning of the century within the Russian Empire.
The year 1988, when the Nagorno-Karabakh conflict started, was a turning point for Azerbaijan. The protest against the secessionist and irredentist movement in Nagorno-Karabakh actually brought people to the streets, and this became the smaller part of a larger cause for the Azerbaijani people, which was to seek independence. A national liberation movement began. At the beginning it was kind of a return to the roots, the culture, the language of the people, and later on the issues of control over our oil, our wealth, our destiny and our fate were raised. The first oppositionist movement, and the group which actually initiated the national liberation movement, was the Popular Front of Azerbaijan, which was actually registered only in 1989. It was suppressed and many of its leaders were arrested in 1990 after the bloodbath which the Soviet troops orchestrated in the capital Baku.
The model of the Azerbaijan Democratic Republic of 1918-20 was actually picked up by the Popular Front and by many intellectuals in Azerbaijani society as a model for the future. The leaders of this republic, Mamed Amin, Rasul Zade, and some other political figures became extremely popular along with their ideas. Under these kinds of slogans, under this image of the republic, the whole movement started.
As you know, in 1991, the Azerbaijani parliament declared independence. Before the Belovezhskaya Pushcha agreement between the leaders of Russia, Ukraine and Belarus, Azerbaijan had been recognized only by Turkey. Even this caused irritation in Moscow. In the fall of 1991, Turkey became the first country to recognize Azerbaijan''s independence, and after Belovezhskaya Pushcha, that process continued. In 1992, the Popular Front came to power and was conducting many liberal policies. The Popular Front itself, as happened with many national liberation movements in the Middle East and some other places, split into different political parties: the National Independence party, the Musavat Party, the Popular Front itself, the Social Democratic Party and many others. Thus began the process of building this political spectrum of parties, and almost every party had its own newspaper. Different public organizations emerged. Azeri society acquired a new environment, quite different from that which it had experienced during the 70 years of Soviet rule. With the Elchibey government, in domestic policy, about 110 laws were adopted, and only 40 of them related to the economy. The rest were on political parties, the media, and some other very important issues.
The Nagorno-Karabakh conflict, the lack of experience of some government officials, the instability of the region as a whole, and Russia''s policy on Azerbaijan all led to the fall of the Elchibey government. Geidar Aliev, the ex-Communist leader of Azerbaijan, had been invited from Nakhichevan by Elchibey. This was a surprise for many people because Elchibey had been imprisoned for 3 years for anticommunist activities at Baku University in 1974, a time when Aliev was the first secretary of the Communist Party of Azerbaijan. But being in Nakhichevan, Aliev did his best to change his old image. He was able to cooperate with the Popular Front in Nakhichevan because the coup d''etat against Elchibey was designed to bring ex-president Ayaz Mutalibov back from Moscow to Azerbaijan, and the lather''s policy was known to many Azeris. If the policy of Elchibey was known to be pro-Turkish or pro-Western, Ayaz Mutalibov''s policy was known to be purely pro-Moscow and pro-Russian.
Thus now we have a third president, Geidar Aliev, who has actually been able to conduct a foreign policy that is more balanced between Russia, Iran and Turkey. Many Western analysts had expected that Aliev would turn and move close to Russia. Although he brought Azerbaijan back into the Commonwealth of Independent States, he nonetheless did not go far beyond establishing dialogue with Russia. On very many occasions, there has been pressure to bring Russian troops back to Azerbaijan. The fact is that under President Elchibey, Azerbaijan became the first former Soviet republic to rid its own territory of all Soviet and Russian troops -- and this before the Baltic states and even Germany had achieved that goal. The border troops, the military bases, and the Caspian Fleet were all gone. The last stronghold was in the second-largest city of Azerbaijan, in Gyandzha. When the airborne division left the city, they transferred weapons to the rebels who toppled Abulfez Elchibey.
Within the short period of its reign, the Elchibey government, with many mistakes, facing many problems, was able to build a foundation for independence and to establish a certain trend in Azerbaijani politics which President Aliev was able to continue and by which he was even strengthened to a certain extent. The people who toppled Elchibey were closely linked to Russian military intelligence, to the Russian army. Aliev was able to crush these groups. He was able to take control of all paramilitary formations within the government, and he was also able to bring under control those outside government structures. Despite the pressure from Moscow to bring border troops into and to establish a military base in Gyandzha, he was able to resist and carefully maneuver between Russia and Iran, signing the $8 billion oil contract with the Western consortium. In effect, he almost returned to the foreign policy of Elchibey in terms of having good relations with Turkey, the United Kingdom, the United States and even Israel, which actually was the second country, after Turkey, to recognize Azerbaijan''s independence.
Despite all kinds of pressure from Iran and the Iranian government, the Israeli government even opened an embassy in Baku. But on many occasions the Azeri president was even blackmailed and threatened that if he traveled to Israel he would meet the fate of Anwar Sadat. Nonetheless, recently the foreign minister of Iran, Velayati, and the foreign minister of Azerbaijan, Hasan Hasanov, held a press conference in Baku, an event unprecedented in diplomatic practice since Velayati began to criticize Azerbaijan openly for having diplomatic relations and any kind of ties with Israel. The answer from Baku was that Israel did not occupy Iran''s territories and Azerbaijan is trying to build good relations with countries in the region and the world; but the fact is that Armenia has occupied 20 percent of Azerbaijan''s territory and created more than a million (the UN estimates 1,100,000) Azeri refugees in their own homeland, and Iran has full-scale relations with Armenia -- diplomatic and economic, and there was even some evidence under Elchibey that Iran was supplying Armenia with fuel and weapons.
Relations with these countries at the present time are such that the government of Azerbaijan maintains the same kind of relations with the government of Turkey as had Elchibey. Maybe under Elchibey his government had greater expectations from Turkey. But maybe it was unrealistic to expect this, since there are limits to what Turkey can and cannot do for Azerbaijan and generally for the region. But in a situation where Armenian forces were actually receiving strong Russian military backing, Elchibey was expecting the same kind of military backing from Turkey. But Turkey is a NATO member and was of course not able to provide that kind of assistance. Further, it had many of its own domestic and other problems and was unable to commit itself to the kind of assistance that the Russians rendered to the Armenians of Nagorno-Karabakh and generally to Armenia.
Relations with Iran were tense under the Elchibey government, as well as when Aliev came to power. Despite this tension, Iran, even under Elchibey, became Azerbaijan''s second largest trade and economic partner. Even with Russia, the Elchibey government signed more than 20 agreements, seeking relations based on an equal partnership and the recognition of Azerbaijan''s sovereignty. The point is that Russia at that time was not seeking an equal partnership and was pursuing a policy of domination in the region. The Russians still wanted to dominate the region and they did not want to view Azerbaijan as an equal neighboring state. Nonetheless, Aliev was able to improve relations with Iran to a certain degree, and to improve relations with Russia. But still there was enormous pressure from the Russian government to bring Russian troops back, as well, of course, as Russian influence, and the Aliev government was able to resist Russian plans to deploy Russian troops even as peacekeepers on a unilateral basis in Nagorno-Karabakh. The US initiative was to deploy multinational forces to the region, because Russian so-called peacekeeping was very dangerous to Azerbaijan at that time and Aliev was able to go in the same direction.
In September 1994, the Aliev government signed an $8 billion oil deal with the International Oil Consortium despite claims that Moscow raised on the status of the Caspian Sea. The Russian position on this issue is that whatever is in the Caspian Sea does not belong solely to one state -- all Caspian states have a stake in the oil resources, denying international maritime law and practice on the use of natural resources in seas. In this way, objections were made by the Russian Foreign Ministry to the oil contract. As a result, Aliev invited Russia''s LUKoil company to join the consortium, in order to give it more legitimacy. He was able to play different forces in Russia itself off each other. The oil lobby, which is quite powerful, is behind LUKoil, and it immediately began to lobby for the recognition of the contract and became kind of a positive force countering the pressure of the Foreign Ministry and the Russian military whose objectives were to look at Azerbaijan not as an economic partner but as a sphere of influence, satisfying their geostrategic military goals.
Turning now to the issue of the two pipelines -- the government of Azerbaijan signed a pipeline agreement with the government of Russia: specifically Aliev and Chernomyrdin signed an agreement on the transport of early oil through Russian territory to the Black Sea port of Novorossiisk, through Chechnya, which is quite unsafe. This happened because there was insistence from Russia and the Aliev government wanted to give more legitimacy to the contract. Some Western countries looked at this very pragmatically. If Russia does not get a chance to transport at least some amount of oil through its territory, then Russia would not allow any oil to be shipped from Azerbaijan. That''s why the pragmatic decision made by the AIOC (the Azerbaijani International Operating Company), which consists of nine oil companies, on October 9, 1995, was to ship oil both through Georgia and Russia to the Black Sea. The government of Turkey made a commitment to buy all of the Azeri early oil, and even to help to finance the Georgian route which could be extended later on to the Mediterranean Sea port of Ceyhan, through the territory of Turkey. Such an agreement was signed between the government of Turkey and Azerbaijan. The Elchibey government and the Demirel government signed that agreement in earlier 1993, and neither country has annulled this agreement yet.
For the oil consortium, one priority is also to transport the main oil, the peak of which will be in the year 2004, to the Mediterranean Sea. This is important for a variety of reasons. Number one, it is cheaper to ship oil to the world market from the Mediterranean Sea than from the Black Sea; in terms of economics, the Mediterranean is less expensive. Number two is the quantity of oil, which will be difficult to transport, especially with supertankers, through the Bosporus Straits and the Dardanelles. Further, it makes sense for geopolitical reasons since it balances Russia and Russian influence in the region. However, for the consortium, the priority right now is not the main oil; the priority is early oil. As the president of AIOC, Terry Adams, mentioned in a recent briefing in Washington, Western oil companies should demonstrate that they are able to take at least a drop of oil out of Baku, which is very important for the main oil and future development.
The government of Azerbaijan has also signed some other agreements. A new consortium has been established to develop the Karabakh oil fields, where again LUKoil was invited and received quite a substantial percentage in that field, as did the Italian company, Agip and America''s Pennzoil. So oil and transportation are extremely strategic and important for Azerbaijan''s independence both politically and economically. If a second oil boom occurs in Azerbaijan, it will really help people to look positively on market reforms, democracy, and Azerbaijan itself, with all of its problems -- the refugee problem, the humanitarian disaster, and the economic decline.
Seventy percent of the main manufacturers are currently shut down due to the disruption of the economic ties with the former Soviet republics and the blockade imposed by Russia during the war in Chechnya on Azerbaijan, as well as some blockades which have been imposed on Azerbaijan by Iran from time to time, especially when Iran was pushed out of contention for participation in the AIOC consortium by the US government (under US government pressure Azerbaijan denied Iranian participation). In addition, of course, Azerbaijan is, as we say here in America, in a bad neighborhood, and whether Azerbaijan will be able to survive as an independent state, keep its secular pattern in the society, and build a real multiparty democracy will largely depend on the presence of the West in Azerbaijan, the support of Turkey, and the support of other countries which look favorably on Azerbaijan. Although they are distant, they have enormous power and a big say in world politics (I mean the United States, of course).
The oil money inevitably will let Azerbaijan rebuild its economy, bring in new technology, and send its young people to study abroad as the case was at the beginning of the century and bring new, progressive ideas back. This is kind of a ''good case'' scenario.
There are several other scenarios, including the ''bad case'' scenarios, and on such a lovely spring day I don''t want to talk about bad scenarios. But I hope there will be questions.
style="color: maroon;font-family: Times New Roman;font-weight: bold;">Discussion QUESTION: What is your understanding of the state of the pipeline that goes through Chechnya today?
MOLLA-ZADE: The state of the pipeline is very complicated, because the fighting is still going on. The recent cease-fire agreement does not mean that there will be a permanent cease-fire; several cease-fire announcements have been made before. So as long as this war is going on, I think that the Russian route will be in danger, and there could be (and probably would be) different terrorist acts, explosions. On the other hand, nothing has been done to the existing pipeline yet. Maybe the Dudaev people do not want to touch it because they still feel that one day they will come back to Grozny and govern Chechnya, and they will want to have good relations with Azerbaijan and they would benefit from the passage of the pipeline through their territory. So the Russian route really depends on a variety of issues related not only to Chechnya, but to the Russian elections and Russian domestic politics, whether Yeltsin will be reelected, whether the Communists come to power, whether there will be war or a settlement in Chechnya.
In this way, I think that the Georgian route, with some degree of stability (which Shevardnadze has been able to achieve), looks more attractive for the oil community. The main problem in Grozny was the paramilitary groups, different kinds of armed gangs, and Georgia itself was also in turmoil and chaos. It seems to me now that this is not the case anymore. There is a hope that both pipelines will work, and the Russian pipeline will ship, I think, 3 million tons of oil annually, and the Georgian pipeline about one million tons per year. But the importance of the Georgian route is that later on it could be extended to Turkey and to the Mediterranean.
Maybe there was no need for the Russian pipeline, because it is expensive to have two pipelines for the oil, but I think that the geopolitics of the region dictated that we should not anger Russia. That, probably, was the very strong position of BP and the British government within the consortium, and the Azerbaijani government too. People like Chernomyrdin, who are more pragmatic (and because of LUKoil''s involvement in the consortium, they are sympathetic to Azerbaijan and Aliev generally), have sent the message that if the pipeline does not go through Russia, they will be very weak and unable to do anything to promote it.
QUESTION: Do you see any evidence that Russian oil interests, in connection with the Russian military, will essentially try to undermine the Yeltsin cease-fire proposal, since their interest really is to have total control over Chechnya?
MOLLA-ZADE: In terms of the oil lobby, I think they are very seriously looking at the oil in the Caspian Sea, especially LUKoil and its president, who is Azeri, Vagit Alekperov. They are not even looking at Siberia as seriously as they are looking at the prospects and the future of Caspian oil. If you compare Caspian oil with Chechen oil, Chechen oil is really of small importance, and it does not have a future. So for the oil lobby, it is better to have good relations with Azerbaijan, Turkmenistan and Kazakstan, and cooperate and take advantage of that cooperation, both directly participating in the project and collecting tariffs on the passage of oil through Transneft. So for them, stability in Chechnya in some way is a guarantee of access. And we know that Chernomyrdin was very moderate on this war in Chechnya, and he is one of the voices in the Russian government who was and is calling for some kind of peaceful settlement, and he is known as the head of this oil-gas lobby in Russia.
As far as the military is concerned, I think you are absolutely right that the military wants to take Chechnya under control; they want to take the borders of Azerbaijan under control; they want to seal the whole southern tier and have Russian influence there. But the problem is, can they do this? Do they have enough power to do that? Of course they have high ambitions, but the reality is that the Russian army is weak; its soldiers are deserting and attacking their commanders because they don''t want to serve in Chechnya. They are running, escaping. So I think the Russian army''s inability to conduct any competent operations has been revealed in Chechnya; it was total humiliation. And this is the only reason Yeltsin is talking about peace. Even yesterday, there was a news report from the Moscow program Vremya; they were calling to Dudaev: come to peace talks, come talk peace. Now they are begging Dudaev to come to peace negotiations. Thus, ideally they want to control it. I know Zhirinovsky wants the Russian army to wash its soldiers'' boots in warm waters, but there is a different reality here.
I think that members of the oil community also have personal stakes in these projects. They are very wealthy people. They are thinking more pragmatically, more realistically, and they understand what is going on and what Russia needs. Not all of them, of course, but most. But even within the military, there are different kinds of disagreements and there is not any concept of Russian military doctrine or whatever. The most important thing is that their ability to control things does not correspond to their ambitions.
QUESTION: What could Moscow actually do to undermine projects with which it does not agree?
MOLLA-ZADE: As I already mentioned in my presentation, Russia was against the contract which the government of Azerbaijan signed with the all-Western consortium. The negotiations with the Western consortium started even before the collapse of the Soviet Union. Even at that time Moscow recognized that sector of the Caspian as part of Azerbaijan, and the Azerbaijani government under the Soviet Union started the negotiations with the Western consortium under ex-president Mutalibov. The main reason why the Elchibey government was toppled was because he was supposed to sign that contract in London on his official visit to the UK at the end of June 1993; in June he was toppled with some direct or indirect participation on the part of Russian intelligence and the military. The point is that there were objections. When Aliev signed this contract, there was some kind of coup attempt even against Aliev. While Elchibey proved unable to withstand such efforts, Aliev was able, due to his experience or whatever, to suppress this coup attempt. So yes, there were such attempts, and especially on the issue of the Caspian Sea.
In this case, if the Communists come to power in Russia and they decide to intervene, again, we are talking about a ''bad case'' scenario, and in the bad case scenario, Russia will be able really to bring troops back in and impose itself politically and militarily on the region. Then they will bring their puppets to power, and through their puppets they may influence the decisions on the business side.
But right now I don''t see any serious difficulties for Azerbaijan or for the Westerners in bringing in their technologies and establishing joint ventures. The most important thing for now is for us to get rid of our own bureaucratic hassles, within Azerbaijan itself, in order to open the doors for Western businesses, to get rid of corruption and bureaucracy and change the mentality of the people concerned. This is still the main difficulty for Azerbaijan, the mentality of the past, the old Communist bureaucracy, and that kind of thing. But that, I think, time will change. I hope that this oil development, this consortium will somehow push the deal forward. International financial institutions like the IMF and the World Bank are allocating loans to Azerbaijan, and they have put forward some preconditions and rules of the game by which the bureaucracy, whether it likes it or not, must try to abide.
QUESTION: Earlier you addressed the possibility of sabotage with the pipeline going through Chechnya. I wonder also if Azerbaijan has any worries about economic sanctions, the possibilities of cutting off the flow of oil that way, through any of these routes. And which routes are better from that perspective and which are worse?
MOLLA-ZADE: As I already mentioned, Russia has imposed some blockades on Azerbaijan, especially with the railroad and the passage through the Volga-Don Canal which links the Caspian to the oceans. There is a possibility that at some point a Russian government may decide to shut down the pipeline. That is why the Georgian alternative was very important for Azerbaijan and for the Consortium. But on the other hand, if you look at the contract which the government of Azerbaijan signed with Transneft, which is the main pipeline company in Russia which deals with these issues, Transneft (or the Russian government) has made a commitment that if the pipeline is sabotaged for any reason, and if the oil that is supposed to come from Azerbaijan is not able to pass through Chechnya or some other part of Russia, the Russian government is obligated to make a swap -- to provide that same amount of its own oil to the Consortium. This is a provision of the contract. But it is for emergency situations, not because Russia will decide to impose any blockade. But if they impose sanctions, it will backfire on them, because they have that agreement which they signed which obligates them to give this exact amount of oil to the Consortium.
There are also some other ways to refine oil in Baku, in the refineries, especially for this early oil, and to get it to the market through, perhaps, the Volga-Don Canal, or by train coming to Georgia, in case even the Georgian pipeline does not work. But the best solution for the consortium was, especially for the early oil, to take it to Iran, to the port of Bander-e Abbas. And then we would use the Iranian pipeline network or obtain a swap for oil in the Persian Gulf. There were some negotiations with the Iranian government on that, and just for that reason the state oil company of Azerbaijan, SOCAR, invited the Iranian oil company into the consortium. But then there were objections in the US. And you know what happened to Conoco in Iran. So Iran disappeared from the picture.
I think Russia is trying to take advantage of this US policy in terms of the pipeline, in terms of influence in the Caucasus. Although there is some kind of Russian-Iranian alliance to contain the West in the Caspian basin, when it comes to reality, that alliance is unstable because both Iran and Russia want to take advantage of this pipeline and this oil. So while they say, ''oh no no no, the Caspian Sea is the sea of the Soviet Union and Russia and Iran,'' this is not a strong claim. They are pushing it, but not very strongly, pushing it as leverage to gain a greater stake, to gain advantage.
QUESTION: How do you see the future of political development in Azerbaijan? Politicians are discussing whether it will be a presidential or a parliamentary republic. You even mentioned the model of the democratic republic in 1918, and in this parliament there were even representatives of the Armenian Dashnaks. How do you see this future? Can we apply this model today?
MOLLA-ZADE: When I mentioned this Azerbaijan Democratic Republic, I really meant the idea which was behind it and not so much the political structure. Azerbaijan, in my view, would do best to be a parliamentary republic with some kind of coalition government, as it was during that period of time, because this presidential rule came to Azerbaijan and some other former Soviet republics when Gorbachev decided to be elected as a president and then Yeltsin became a president. All of a sudden all of these republics decided to have presidential rule. Whether it suited these political realities, mentalities, or not, everybody decided to have a president or their leaders decided to be elected as presidents.
It is difficult to say -- at this stage of the transition, with such a strong president as Aliev, maybe it is better to have that presidential rule and that person in power who is experienced, tough, smart and knows how to operate in this very difficult situation in Azerbaijan''s history. But in the future, when things settle down, there will be more economic development. The private sector will be stronger. Then, I would say that I am probably in support of a parliamentary republic rather than a presidential one. But if the presidential system works well, and works to the benefit of Azerbaijan, then why should one change it? Any form which is sufficient, which works, which reflects the mentality, culture and law of the people, and which helps development, is a good model or system.
But one important point is that presidents in Azerbaijan have failed. They have been toppled. If you look at the period since 1988, when the Karabakh conflict started, Kyamran Bagirov, the first secretary, was replaced by Vazirov. Then after January 1990, Vazirov was replaced by Mutalibov, who was elected later as president on a non-competitive basis. Then Mutalibov fled; then Elchibey was toppled. So we see how many leaders have failed.
But if you look at the parliament which was elected in 1990 under the state of emergency, it consisted mainly of Communists (90 percent), the nomenklatura, and only 10 percent were representatives of the Popular Front, some independents and supporters of the so-called Azerbaijan Democratic Bloc. But this parliament, from 1990 to 1995, a five-year period, survived, although it was shrinking (from a 365-member body to the 50-member National Council). But when there was chaos in Azerbaijan, the parliament was making the decisions. Parliament was very important -- a stable political institution where different politicians of different groups came and discussed events and the fate of the country. When there was a problem with Mutalibov, the parliament one day announced his return and then the next day elected another speaker from the Popular Front, Isa Gambar. The same happened when Aliev came to power.
And I would just want to make one more very important point, that Russian intelligence forces (including the military intelligence organization, the GRU) tried to create more mess and chaos in Azerbaijan. But somehow some mechanisms or some instinct did not allow events to go far beyond some line, as had happened in Georgia or Tajikistan. The main goal was to frighten Westerners. No oil companies were to come; the idea was to create mass turbulence, to get people to say ''these very barbaric people are killing each other; stay away; we know the region, we know how to handle it; we will fix things, and then we will invite you to come and build with us.'' But that didn''t happen. Azerbaijan was able to become independent despite this mess, chaos and instability. It was still able to gain its independence and a government of its own. Elections were not perfect -- indeed, they were bad -- for the parliament last year. There is no justification for that. But still the country is striving for its independence.
I think that the Georgian and Azeri people believed in independence very seriously, and their punishment was the dismemberment of both. Armenia, on the other hand, was able to develop a more pragmatic foreign policy involving some restrictions on its sovereignty vis-Ã -vis Russia, looking to Russia as a guarantor of its security. Regionally, I think Armenia was able to play very carefully with Russia, having Russian bases, not pushing the Russians out, cooperating with them, and even establishing good relations with Iran. This Armenian-Iranian alliance is designed to contain Turkey in the region, and these relationships between Armenians and Russians, and Iranians and Armenians have some historical roots. So there is a triangle of some kind of cooperation between Iran, Armenia and Russia, and some struggles are taking place for influence in Azerbaijan. Of course, all this is related to oil. On the other hand, we have Turkey and the United Kingdom and the United States. Some Middle Eastern countries take different approaches. For example, Syria backs Armenia and Lebanon backs Armenia (the Armenian community is there). On the other hand, we have a good alliance for cooperation with Israel. Azerbaijan also has good relations with Saudi Arabia and Egypt

This document is a part of the Caucasus and the Caspian Seminar Transcripts collection.