Azerbaijan is a secular Muslim state at the crossroads between Europe and Asia, Russia and the Middle East. Historically it has provided a link between East and West, and just recently it came to attention as host to the Eurovision Song Contest 2012, eventually won by Sweden with an entry entitled ‘Euphoria.’

Possibly slightly less euphoric, however, is Azerbaijan’s geopolitical situation, caught as it is between the interests of Iran, the West and Russia. Its attempts to preserve its freedom to manoeuvre are akin to a tricky political dance on a tight-rope: the country is young (20 years since the break-up of the USSR) and striving to maintain its independence, while at the same time satisfying the interests of powerful actors, near or far.

Three-way crossroads

Azerbaijan is an energy-rich nation, so the orientation of its foreign policy is an important reference point for the processes of state-building and democratisation, which may (or may not) find support among the elites and ordinary citizens. The geopolitical impact of the Arab Spring has meant that Iran, the US and other Western democracies, and Russia keep a close watch on current developments in and around Azerbaijan. Baku has long pursued an even-handed foreign policy, manoeuvring to move the country into the very focus of the great powers’ interests. In a rapidly changing regional security environment, Tehran, Washington and Moscow are concerned with what might happen in this Caspian littoral state in future.

‘Baku has long pursued an even-handed foreign policy, manoeuvring to move the country into the very focus of the great powers’ interests. In a rapidly changing regional security environment, Tehran, Washington and Moscow are concerned with what might happen in this Caspian littoral state in future.’

Despite Azerbaijan’s continued efforts to maintain a balanced diplomatic stance, Iran, the US and Russia have all made attempts over the last few years to exert pressure on ruling circles in Baku. They have tried to dissuade them from certain foreign policy conduct or to convince them to act in a manner consistent with great-power interests. Washington and other Western capitals have on several occasions urged Baku to change its domestic politics so as to promote genuine democratic reform, freedom of speech and protection of human rights; Tehran and Moscow have always sought to gain greater political and economic influence in Azerbaijan.

Iran

Paradoxically, during recent months Iranian-Azerbaijani relations have reached unprecedented levels of tension. Azerbaijan has just recalled its ambassador from Iran for consultations, mirroring the action Iran took some weeks ago.

The town of Shusha in the disputed region of Nagorno-Karabakh, an Armenian enclave in Azerbaijan under Armenian control since 1992. The town was virtually destroyed during the military conflict between the two countries, but little has been done to rebuild it. flickr.com/e y e / s e e

Tehran has repeatedly accused Baku of expanding cooperation with the US and Israel, and consolidating Western strategic presence in the South Caucasus-Caspian basin. Iran’s senior clergy are well aware that Azerbaijan’s closer security ties with NATO, the US and Israel could seriously affect Iranian influence in the region. Tehran strongly believes that a politically independent, pro-Western and petroleum-producing neighbour could enter into competition with the Iranian state.

In their turn, Azerbaijani authorities are suspicious of Iran’s intentions to intensify Islamic influence in their country. Azerbaijan has indeed been significantly affected by the ideology of the Iranian-trained clerics, since Tehran has consistently exploited any unrest to strengthen its political weight there. Azerbaijani leaders have already seen Iran interfering in their country’s internal affairs and Baku has long been under pressure to cooperate more closely with the clerical regime in Tehran. As a result, Baku and Tehran struggle to find a language of mutual understanding but have as yet to reach political consensus on many geopolitical issues in the regional context.

In reality, Tehran seeks to prevent the emergence of a strong and wealthy Azerbaijan that would act as a magnet for Azerbaijanis living in communities in the northern part of Iran. The large Azeri minority is a growing concern to the Iranian leadership, as Tehran fears increased nationalism among Azerbaijanis could threaten the integrity of the Islamic Republic. This is precisely what informs Iran’s policy toward Azerbaijan. If Russia considers the problem of an independent Azerbaijan as one of the elements in a complex of South Caucasus sovereign states, for Iran this problem assumes a somewhat different political form. The very existence of Azerbaijan, even as a purely formal independent state, is quite definitely and not unjustifiably perceived as a real threat to the national security of the Islamic Republic. In other words, the presence of over twenty million Azerbaijanis residing in Iran is the spark which could ignite the fragile powder keg that is the multinational structure of the Iranian state. For that reason, it is not surprising that the interests of Iran could best be served by the simple absorption of Azerbaijan into Russia.

Russia

Russia’s attitude to Azerbaijan’s geopolitics has been very cautious. Moscow too has a vital interest in undermining American hegemony in the South Caucasus and in restricting the westward orientation of her post-Soviet neighbours. Russia continues to carve out an important political and economic role for itself in Azerbaijan and is actively but subtly competing for influence in her backyard. Baku has given Putin’s plan for a Eurasian Union some consideration, but has so far shown no interest in joining a ‘new supra-national union’ of sovereign states. The Azerbaijani leadership is still opposed to any further encroachment of Russian influence in the region and has therefore been actively lobbying for Western engagement.

'Using the Nagorno-Karabakh conflict as leverage, the Kremlin has considerably increased its influence in recent years with the purpose of bringing Azerbaijan back into Russia’s orbit.'

However, Azerbaijan’s demands that Russia pay $300 million to extend the lease on a Soviet-era anti-missile radar station in the Azerbaijani town of Qabala remain a continuous point of argument between Baku and Moscow, though the sides have never let the dispute escalate. Ruling circles in Baku know full well that Russia retains powerful economic and political weapons, which, if deployed, could hinder – or even overturn – Azerbaijan’s development plans. Using the Nagorno-Karabakh conflict as leverage, the Kremlin has considerably increased its influence in recent years with the purpose of bringing Azerbaijan back into Russia’s orbit. President Ilham Aliyev’s tactics therefore seem to be aimed at addressing Moscow’s immediate strategic interests.

Yet, with Putin’s return to the Russian presidency, the Kremlin is expected to use different political and economic levers to rein back Azerbaijan’s independent-minded policy. Russia’s closer strategic ties with Iran also serve this purpose, given that both powerful players have found common ground in many regional security issues. Great-power ambitions are increasingly manifested in the desire of the Russian leadership to run the geopolitical show in the South Caucasus and Central Asia. This might even become a reality if the military option against Iran is put into operation.

The US

Over the past few years the changing regional security situation has made Azerbaijan an increasingly crucial component of US foreign policy, though so far American strategy has been focused on grappling with the results of Russian-Iranian geopolitical manoeuvrings that hinder any serious US activity in the post-Soviet southern tier. Moscow and Tehran do not want to see Washington as a major arbitrator in the South Caucasus-Caspian basin, but Azerbaijan is trying to achieve the full involvement of the US and other Western partners in regional geopolitics in order to counterbalance Russian influence in this volatile part of the world.

The US and the European Union have repeatedly demanded that the Azerbaijani government remain committed to a long-term, genuine partnership-based strategic relationship and move forward with the evolution of their country into a strong democracy based on the rule of law, political freedoms, open society and market-oriented economy.

Security, energy, and democratic reform in Azerbaijan were the key issues discussed with the Azerbaijani president Ilham Aliyev by Hillary Clinton during her recent visit to Baku. (photo: www.president.az web site)US Secretary of State Hillary Clinton’s recent visit to Azerbaijan as part of her South Caucasus tour in early June was further proof of the geostrategic significance of this Caspian state for the United States at a time of rising tensions in the region. Although the US values Azerbaijan as a strategic ally in the South Caucasus, Washington and Baku still continue to try to thrash out their differences on a number of sensitive issues.

'US Secretary of State Hillary Clinton’s recent visit to Azerbaijan as part of her South Caucasus tour in early June was further proof of the geostrategic significance of this Caspian state for the United States at a time of rising tensions in the region.'

Against the backdrop of Moscow's attempts to change the geopolitical dynamics of the region, Washington is keen to learn more about how the Azerbaijani leadership views its relations with Russia and Iran, and to see proof that the government is working towards a democracy. At the June 6 meeting with President Aliyev, Secretary Clinton had detailed talks on security cooperation, energy matters and democratic reforms in the country. While highly appreciating Azerbaijan’s contributions to the international security efforts in Afghanistan, she called for Baku and Yerevan to break Nagorno-Karabakh impasse and stressed that the US would be ready to do everything possible to help the two nations arrive at a diplomatic solution to the Armenian-Azerbaijani conflict.

Civil society

It is not surprising, but certainly noteworthy, that the Azerbaijani authorities released Bakhtiyar Hajiyev, a pro-democracy youth activist on the eve of Secretary Clinton’s visit. Though the move was regarded as a positive step, one could argue that this was simply gesture politics on the part of the Azerbaijani government. Besides, the decision to release Hajiyev was most likely intended to reduce the tension arising from US concerns about the internal human rights situation. Even so, Hillary Clinton, like senior officials from international organisations, has urged the authorities to respect human rights and democratic principles and to foster freedom of speech by liberating all detained and imprisoned protesters.

Clinton apparently had meetings with representatives of civil society groups. Topics for discussion included their relations with the authorities: how effectively they can influence government policy-making, and what contribution they can make to increasing transparency and accountability in the government’s disbursement of the state budget and the oil/gas revenues. Civil society leaders received strong assurances from Secretary Clinton that the United States would continue to support the development of civil society in Azerbaijan.

Sunset over the Absheron penninsula in Azerbaijan. In the 19th century it was the site of some of the world's earliest oil production. 150 years later the country has become an important player on the world energy market, producing 800,000 barrels of oil per day and 1 billion cubic meters of gas per year.

These meetings demonstrate the seriousness of US concerns about domestic problems; they also send a very clear signal to the Azerbaijani government authorities that they should do all they can to initiate far-reaching democratic reforms. If this does not happen, neither the US nor other Western democracies will be able to offer Azerbaijan a real alternative to Russian policies. This will be the outcome, even if Washington’s dual-track approach of pressure and engagement, in which energy resources, security cooperation and democracy are viewed as key elements in US policy toward Azerbaijan, remains in effect.

The way out of the deadlock

After long years of pursuing a balanced interest-based foreign policy, Azerbaijan is faced with intractable geopolitical deadlock. Iran’s anti-American policy and the cold relations between Russia and the West have impacted negatively on the formulation of Azerbaijan’s strategies in the region. The present-day euphoria at the possibility of US strikes against Iran has already created additional, grave concerns in the Azerbaijani government. President Aliyev and his administration appear to realise that whatever their decision, it has to address the issues that plague their relations with Iran, the US and Russia. This is a very tough call, which will compel Azerbaijan to go either westwards or eastwards.

The way forward for the triangular relationship between Iran, the US and Russia is currently the most important strategic factor influencing Azerbaijan’s future geopolitics, regional security in the Caucasus and Caspian geo-economics.

'President Aliyev and his administration appear to realise that whatever their decision, it has to address the issues that plague their relations with Iran, the US and Russia. This is a very tough call, which will compel Azerbaijan to go either westwards or eastwards.'

At stake are Azerbaijan’s stability and security. President Aliyev appears unsure of how best to proceed. The energy trade will continue to be a significant factor and the quest for diplomatic solutions could be stepped up, but the road ahead will continue to be fraught with pitfalls and new challenges.

Most importantly, President Aliyev will manage to resolve his country’s geopolitical conundrum only if he can credibly persuade the US and other Western democracies that no one else can guarantee stability, liberalise the political system and bolster the market economy in Azerbaijan. The sooner the leadership makes the necessary adjustments to its domestic and foreign policies, the faster it will discover how to eliminate many of the problems currently gripping the country. The key question, as yet unanswered, is whether the Azerbaijani leadership is capable of a new strategic vision to introduce drastic changes, extensive freedoms and the radical reform of the government.