Economic Ties Bind Azerbaijan and Georgia

The dramatic end of Eduard Shevardnadze's presidency in Georgia caught authorities off guard in Azerbaijan. On November 23, Azerbaijan President Ilham Aliyev – who had gained office in a widely condemned vote weeks earlier- phoned his Georgian counterpart to urge him to stand firm. But Shevardnadze resigned hours later, effectively acknowledging Georgia's November 2 elections as illegitimate. Experts expect that Shevardnadze's successor and Aliyev, despite their different power bases, will forge a solid relationship based on their interdependent economic future.

Energy transport projects, so vital to both economies, have turned Azerbaijan and Georgia into "strategic partners." Shevardnadze and former Azerbaijani president Heidar Aliyev, both former Communist leaders, had been friends and colleagues for decades. This history may have made Baku-based analysts reluctant to acknowledge the forces driving Shevardnadze to resign. In Azerbaijan, a divided opposition tried in vain to expose Aliyev's election as rigged, and police cracked down efficiently on protestors. [For background, see the Eurasia Insight archive]. In Georgia, opposition leaders united to organize days of mass demonstrations, and by gaining the support of the military, forced Shevardnadze to step down. All along, Ilham Aliyev asserted his interest in stability above all else in Georgia. This reflects Azerbaijani strategy toward the Caucasus- and will probably apply if Mikhail Saakashvili wins Georgia's January 4 presidential election, as most expect he will.

Indeed, Georgia's "revolution of roses" may prompt Aliyev to worry more about what happens inside his country than about foreign relations. "After October 15 [presidential elections in Azerbaijan] the opposition in the country felt broken and hopeless," says Nasib Nasibli, a prominent political scientist associated with the Musavat party. "The events in Georgia brought back hope to the Azerbaijani opposition.". Many in the ruling party fear that Saakashvili's alliance with Zurab Zhvania and interim president Nino Burjanadze could provide a blueprint for Azerbaijan's established opposition. [For background, see EurasiaNet's opposition reports].

The leaders of Azerbaijan's opposition parties, on the contrary, welcomed the change of power in the neighboring country. Etibar Mammadov, the chairman of the National Independence Party, sent a congratulatory message to Saakashvili and called the events in Georgia "an important step that will affect democratic processes in the whole region." The chairmen of the Musavat and Popular Front parties sent similar letters and expressed willingness to work with Georgia's new leaders in the future. Nasibli believes that after January elections in Georgia, cooperation will expand between the veteran opposition in Baku and the new ruling elite in Tbilisi.

While one might understand some envy among Baku's opposition leaders, their warm reaction is also logical. Having fallen in a presidential contest that has left them continually subject to detainment, harassment and intimidation, the Azerbaijani opposition is keen to learn lessons and win friendship from the successful insurgents in Georgia. "The Azerbaijan opposition did not think far enough ahead," says Zarbali Agayev, a member of the Popular Front party. [For background, see the Eurasia Insight archive].

Aliyev and his circle may fear political fallout from Georgia's change in government. Politicians of all stripes- and ordinary citizens- worry about how that change will affect regional energy projects. The $ 3.4 billion Baku-Tbilisi-Ceyhan (BTC) oil pipeline, currently under construction, stands to become a prime outlet for delivering Azerbaijan oil to western markets. [For background see the Eurasia Insight archive]. Instability in Georgia could hinder the pipeline's completion. Newspapers and officials in Georgia and Baku have invoked the possibility of Russian sabotage, envisioning criminal groups or radical environmental organizations acting in tandem with Russian opportunists. Though Aliyev has gone to the trouble of stating that no threats face the pipeline, his national security staff reportedly tightened security along its route in recent weeks.

Aliyev and Saakashvili appear perfectly aligned on the pipeline's importance and on the urgency of infrastructure projects in general. "We badly need this project," Saakashvili has said. "It is a matter of survival." Georgia currently ships Azerbaijani oil through the severely limited Baku-Supsa pipeline and expects to earn that pipeline's take several times over after BTC launches. A natural gas project, the Baku-Tbilisi-Erzurum pipeline, is also in the works. This project could stabilize private investment in the region- BP, the energy conglomerate managing it, also manages BTC. [For background see the EurasiaNet Business & Economics archive]. It could also lessen Georgia's dependency on Russian gas. [For background see the Eurasia Insight archive].

Perhaps in light of the countries' economic bond, Saakashvili has taken pains to reach out to the roughly 500,000 ethnic Azeris living in Georgia. "We are confident that close mutual relations between Azerbaijan and Georgia will be further continued and ethnic Azeris living in Georgia will be actively involved, along with the nation of Georgia, in all spheres of life," he reportedly said in a letter to National Independence chairman Mammadov. Of course, Saakashvili must know that ethnic Azeris can play a meaningful role in January 4 elections. For that reason, he may be making special efforts to secure support from Azerbaijan's rulers and its opposition.

Few analysts expect these overtures to fade after the vote. Georgia and Azerbaijan depend on each other economically; they also both sit in the center of potential quarrels between the United States and Russia for regional influence. Isakhan Ashurov, an Azerbaijan opposition activist and lawyer familiar with Georgia, says: "The change of power in Georgia has irritated Russia and the latter is trying to increase its control in the region." On December 11, after reported coordination among Armenian and Russian officials, Aliyev met with Armenian president Robert Kocharian to discuss the disputed Nagorno-Karabakh region for the first time since 2002. [For background, see the Eurasia Insight archive]. Regardless of what happens on January 4, and what either country's leaders think of the other, Azerbaijan and Georgia figure to seek strength and safety in cooperation.