EurasiaNet Business & Economics - Aliev Focuses on Trade Ties During Washington Visit

BUSINESS & ECONOMICS

ALIEV FOCUSES ON TRADE TIES DURING WASHINGTON VISIT

Ula Marshall 9/14/00

US and Azerbaijani officials emphasized trade over politics during the recent visit to Washington by President Heidar Aliev.

During Aliev’s two-day visit September 11-12, US diplomats were enthusiastic about trade opportunities, and indicated that they were prepared to consider advocating the lifting of sanctions that inhibit US aid to the Caucasian nation. At the same time, both US and Azerbaijani officials paid scant attention in their public comments to the domestic political situation in Azerbaijan, where the jailing of a newspaper editor on terrorism charges has prompted an outcry from various human rights organizations. [For additional information see EurasiaNet’s Human Rights archive].

Aliev, who visited Washington after attending the United Nation’s Millennium Summit in New York, vigorously promoted Azerbaijan’s economic interests. The Azerbaijani leader signed an oil agreement at the US Capitol and attended the opening ceremony of an Azerbaijani trade center. In addition, Aliev addressed participants of a conference � "Azerbaijan: Gateway to Eurasia. Land of Strategic and Commercial Alliances" -- sponsored by the US-Azerbaijan chamber of commerce.

"We are going to focus on the diversification of our economy," Aliev said in his September 11 speech. "This opens up numerous commercial opportunities for American businesses in Azerbaijan."

Seeking to allay investor concerns, Aliev stressed his government was taking steps to create a more stable economic environment. Citing the establishment of the country’s Foreign Investment Agency, Aliev said in his speech that a goal for Azerbaijan was to create "favorable conditions for the normal operation of foreign investors, as well as provide an effective mechanism of troubleshooting to solve the problems that foreign investors face."

US officials welcomed Aliev’s pledge to diversify an economy now dominated by the oil and gas sector. Such an effort, US officials added, would enhance stability in Azerbaijan by expanding economic opportunities and reducing widespread poverty.

At the same time, US officials expressed concern about corruption in Azerbaijan. Jan Kalicki, the Commerce Department official responsible for trade and investment relations with former Soviet states, cited recent improvements in Azerbaijan’s legal framework, but suggested the system was not sufficiently transparent to reassure many potential US investors. Foreign business leaders "must be sure that they have firm and predictable business conditions," Kalicki said.

Aliev and other Azerbaijani officials lobbied for the removal of sanctions, imposed under Section 907 of the Freedom Support Act, which blocks US aid to Azerbaijan. The sanctions were instituted during the height of the Nagorno-Karabakh conflict. The legislation, passed in 1992, facilitates the distribution of US economic and humanitarian aid to the former Soviet Union. Azerbaijan is the only former Soviet state ineligible to receive such aid.

While in New York, Aliev and his Armenian counterpart, Robert Kocharian, held talks aimed at producing a lasting peace settlement in Karabakh. Both sides reported no new breakthroughs. The two leaders agreed to continue the dialogue. [For additional information see the Eurasia Insight archive].

Both US and Azerbaijani officials called for renewed efforts to build an oil pipeline, saying the new oil route could serve as the foundation for broad economic development across Central Asia and the Caucasus. The pipeline project, known as Baku-Ceyhan, would transport Central Asian oil to port facilities on the Turkish Mediterranean Sea coast, circumventing existing routes through Russia. The project has encountered a variety of obstacles in recent months. [For additional information see EurasiaNet’s Business and Economics Department archive].

The state-building implications of Baku-Ceyhan are profound, according to Ambassador John Wolf, the US representative to the Asia Pacific Economic Cooperation forum. Baku-Ceyhan is "about the relations that states will have with each other, and whether they will have direct access to world markets for the exports they need to survive," Wolf said. "Finally, it’s about whether they [Caspian states] must subordinate themselves to the economic and political interests of large and powerful neighbors."

Editor�s Note: Ula Marshall is a freelance journalist, based in Washington, DC.

The Central Eurasia Project aims, through its website, meetings, papers, and grants, to foster a more informed debate about the social, political and economic developments of the Caucasus and Central Asia. It is a program of the Open Society Institute-New York. The Open Society Institute-New York is a private operating and grantmaking foundation that promotes the development of open societies around the world by supporting educational, social, and legal reform, and by encouraging alternative approaches to complex and controversial issues.

The views expressed in this publication do not necessarily represent the position of the Open Society Institute and are the sole responsibility of the author or authors.