Thursday, July 07, 2011
This year, 2011, is an important one for the entire former Soviet Union region. Twenty years ago the Soviet Union officially ceased to exist. A group of newly independent states appeared on the map in this part of the world. Among the new entities was a republic from the South Caucasus, Azerbaijan, a small country on the crossroads between Europe and Asia, synthesizing the cultural heritage of East and West.
This was the second time in the 20th century that the people of Caucasian Azerbaijan had a unique opportunity to create their own independent state. The first such opportunity was in 1918 after the Bolshevik Revolution against the Russian Empire.
Proclaimed on May 28, the republic's first period of independence lasted only 23 months, after which the country was occupied by the 11th Red Army. On April 28, the Azerbaijan Soviet Socialist Republic was proclaimed in Baku, the capital of Azerbaijan.
Seventy years later Azerbaijan was able to restore its statehood and again hoisted the tricolors of its first republic. On Oct. 18, 2011 the Republic of Azerbaijan will celebrate its 20th anniversary. These last 20 years can be divided into two decades: The first was the period of the foundation of the new state; the second involved attempts to strengthen it.
After the restoration of its independence the young state was faced with several problems. Azerbaijan inherited some negative issues from the defunct Soviet Union, such as a difficult economic situation, a sharp decline in production, hyperinflation, unemployment and continued conflict with Armenia over Nagorno-Karabakh, which grew into a war between the new states.
The negative consequences of the Soviet legacy also emerged as political instability within the country. Between 1992 and 1994 Azerbaijan had three governments which had polar views on the state's development strategy. Azerbaijan was on the verge of collapse. It was necessary to find a resolution to all these problems but it was complex and urgent.
Only after becoming president, Heydar Aliyev, who had extensive administrative experience from the Soviet Union, made possible the consistent resolution of the problems of the country.
Azerbaijan understood that the main asset that could be used to resolve all of these problems were its oil-rich fields. If the oil were to be properly used it could be key for a solution to both the economic and political challenges of the new state. It is no secret that the main obstacle to implementing Azerbaijan's energy policy was Russia. Russia was against Azerbaijan developing its own independent energy policy. Russia feared that a more independent Azerbaijan successfully conducting its internal and external policies might be an example for other new states of the post-soviet space. In addition, Russia was strongly against the involvement of Western companies in the development of Azerbaijani energy fields. Immediately after the collapse of the Soviet Union, Russia announced the territory of the former state within the sphere of its national interests. In 1992 it declared a doctrine of the "near abroad," thereby declaring a monopoly on political and economic influence in the region. In short the West did not seek to spread it's influence. The United States and the newly formed European Union sought to promote greater integration of Central and Eastern European states into the Euro-Atlantic area. In this way, since the end of the Cold War, the sphere of influence between the West and Russia in Eurasia was held an invisible line. In short, during the visit of US Secretary of State James Baker in February 1992 in Azerbaijan, it was announced that the US has no national interests in the South Caucasus region. In this situation, Azerbaijan had to draw the attention of the West by using own energy resources.
In order to ensure stability in Azerbaijan to attract large Western capital, Azerbaijan launched a major operation to liberate the territories around and in Nagorno-Karabakh in early 1994. However, the intervention of outside forces did not allow Azerbaijan to successfully complete a military operation. It became clear that without a balance in the region the restoration of territorial integrity would be impossible. That is why in May 1994 Bishkek signed a ceasefire agreement. This agreement provided conditions for the signing of the “Contract of the Century,” which started the exploitation of the Azerbaijani energy fields. Soon the Baku-Supsa pipeline construction began, which for the first time in the post-Soviet area allowed Azerbaijan has access to the European markets, bypassing Russia. It was soon decided to build the main export pipeline, the Baku-Tbilisi-Ceyhan pipeline. Following the discovery of large gas deposits in Shah Deniz, the Baku-Tbilisi-Erzurum gas pipeline was constructed.
Since 1995, Azerbaijan was able to achieve political and economic stability. There were several unsuccessful coup attempts against President Heydar Aliyev, who succeeded in restoring order in the country, bringing down centers of separatism in the north and south of the state and destroying bandit formations which were harming citizens. In the same year for the first time the independence of Azerbaijan's economy was growing, and the state managed to reduce inflation and economic reforms began. The energy policy was bearing fruit.
As for the second decade, it was marked by an economic boom in the country. It was time of the beginning of large-scale oil production and its export to world markets. Azerbaijan showed record growth in the world, reaching double-digit numbers.
Significantly, growth was also observed during the global financial crisis. At the same time there is a surge of activity in Azerbaijan's foreign policy, which is mainly oriented toward a resolution of the Karabakh conflict. Azerbaijan opened new representative offices abroad to actively promote Diaspora communities to use their influence and lobby various states.
Azerbaijan is well aware that to have an economy that depends only on the income brings the energy sector, can have dire consequences. One sector developing economy, may suffer from the consequences of the so-called Dutch disease. In this case, the other segments of the economy may leave underdeveloped and ultimately this may affect the future of the state. It is known that the oil reserves of Azerbaijan are not infinite and so it is worth thinking about the development of new sectors of the economy. The priority sectors for economic development were chosen as agriculture, tourism, petrochemical plants and high technology segments. It is these areas that will be key areas of development in the third decade. Tourism infrastructure is also being built and new recreational facilities have opened. In addition, the farming industry is also growing. There are new businesses in the region. As early as next year, Azerbaijan plans to launch its own satellite, which will be the basis for creating a space policy and telecommunications industry.
In addition to economic reforms, Azerbaijan intends to strengthen its position in the international arena. It is no accident that Azerbaijan announced its candidacy for a position as a non-permanent member of the UN Security Council. The main priority is to resolve the Nagorno-Karabakh conflict.
In short, Azerbaijan is optimistic entering its third decade of independence to diversify their interests and priorities, and more confident in taking its place among other actors on the international stage. Azerbaijan does not intend to be a passive observer of international events; it wants to actively participate in its processes.
*Associate Professor Rovshan Ibrahimov is head of the department of international relations at Qafqaz University in Azerbaijan.
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