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Azerbaijan-Russia Geoeconomic Links and Its Consequences

 

Azerbaijan-Russia Geoeconomic Links and Its Consequences

 

On March 5-6th 2024 suddenly Russia’s Prime Minister Mikhail Mishustin paid official visit to Azerbaijan where he met with President of Azerbaijan Ilham Alliev and Prime Minister Ali Asadov. It is interesting to note that negotiations between PM of Russia and President of Azerbaijan lasted for 3 years and such a long dialogue was even beyond of protocol and never fixed before between the parties. At the beginning of the dialogues the PM of Russia congratulated to Ilham Aliev with blatant victory at the Presidential race on 7 February 2024. According to some information, PM of Russia Mishutsin delivered to Aliev personal letter from the President of Russia Vladimir Putin. However, main topic of the three hours discussion were the following:

·         Promotion and involvement of Azerbaijan into the Russia’s new geoeconomic project “North-South” from Sankt-Petersburg till Mumbai (India) and actively development the railway transit road from Makhachkala till Askhara (Iran) with joint Azerbaijan-Russia investment package. By the way, President Ilham Aliev has confirmed readiness to get involved more fasten manner in realization the project and accepted the bid that Russia and Azerbaijan has increased their trade turnover in $4.4. Billion in 2023. Russia’s PM more insistently lending realization the “North-South” geo-economics project with trade turnover in 30 mln. tones annually;

·         Assistance in holding Russia’s presidential elections in Russia on 15-17 March, 2024 at the territory of Azerbaijan and requested opening several elections where a lot of Russia’s citizen arrived lately. About 200 000 ones;

·         Promotion of Russia’s “soft power” for opening more Russian language schools, Russian culture centers and humanitarian institutions (there are 300 Russian language schools in Azerbaijan and more than 7 000 Azerbaijani students educated in Russia) and making more close link between two countries and realization joint business projects, like 1400 joint companies acting in Azerbaijan, where only 300 ones with pure Russian 100% capital stocks. Moreover, Russian private investments in the country consists of $295 million (Russia stands at fourth place in direct foreign investment portfolio list after the UK, Turkey and Cyprus);

·         Informally Russia’s PM Mikhail Mishustin requested for assistance Azerbaijan authority in avoiding the Western economic sanctions and inquired about China’s involvement into national as well as regional affairs.

During the two day official visit period of time, the Russia’s PM was accompanied by Vice-Premier Minister Aleksay Overchuk, Minister for Transportation Vitaly Savelev, Minister for Labour and Social Affairs Anton Kotyakov, General Director of the Export State Center Veronika Nikishina who is in charge promotion of the Russian version “North-South” Transit Corridor Project (see below the map). During the negotiations the following concrete agreements and treaties were signed up and very soon are to be realized as follow:

v  Action Plan for 2024-26 period of time for development transit spots capability at the border of the two states (increasing up to 3000 car cargos turnover);

v  Inter-government Agreement on provision of exploitation and service automobile bridge over river Samur and upgrading existing transit check-point “Yarag-Kazmalyar”;

v  Road Map for promotion tourism between Azerbaijan and Russia in 2024-26;

v  Program for increasing cooperation between Ministries of Culture of both states.

As it is seen above mentioned treaties arranged during the visit were linked with realization of the “North-South” Transit Geoeconomic project where Azerbaijan agreed to participate with President Alievs’ personal consent.

Separately from the visit, at one of the international conferences hold in Russia, at the same time when the visit hold, Vice-Prime Minister Khunsulin said the following (words directly cited): “We wants via Caspian basin, via Azerbaijan and Iran  get entrance to Indian Ocean avoiding Suez Channel  and Bosporus strait. This is our strategic transport (i.e. geoeconomic) mission and task”. It seems that the mission why Russia’s PM paid visit to Azerbaijan had more geoeconomic and geopolitical missions and it is now clear why it occurred at the stage.

It also interesting that upon arrival from Azerbaijan, the Prime-minister Mikhail Mishustin has signed up a decree on opening Free Economic Zones in Mordovia, Rostov region and Tver region (by the way, Rostov region just is one of the key gateway to realize the “North-South” geoeconomic project).

 

Historically, the South Caucasus has been playing a significant role for establishing and developing the economic relations between Europe and Asia. After the trilateral agreement amongst Azerbaijan, Armenia and Russia, which led to a complete ceasefire and a cessation of all hostilities on November 10th of 2020, new geo-economic opportunities have been established in the South Caucasus region. Thanks to the trilateral agreement, the normalization of the relations between Turkey, Azerbaijan and Armenia and the potential for economic cooperation has emerged in the region. Hence, developments throughout the past two years show that there is a mutual interest in all South Caucasus countries for further establishing and expanding the trade and economic cooperation across border lines through establishing new opportunities. Therefore, it is suggested to promote the regional socioeconomic reconciliation and cooperation programs for the sustainable peace in the region. Additionally, Armenian borders with Turkey have been closed since 1993 due to the conflict between Armenia and Azerbaijan. However, in the post-conflict period there is also a new solid opportunity for the recovery of Turkey-Armenia economic relations, too. Having considered above mentioned geopolitical confrontation between the actors of the Caucasus region and even confrontation lines among three regional hegemons: Iran, Russia and Turkey and with attempt of outside regional actors, like the USA and EU (mainly with France engagement and with weak involvement of Germany – German Foreign Affairs Minister Annalena Baerbock just lately paid official visit in Georgia and criticized the current Georgian government for pursuing anti-Western foreign policy and that was only the mission) attempts to have their influence in the region, the situation in the South Caucasus more strain and would be deteriorated further on. In this case, several scenarios could be perceived in nearest future, probably even in long term but even in short term the geopolitical landscape in the region would be detrimental to international security perspectives. Let’s consider the period of for 2 years period and review the scenarios development cases: 

The First Scenario – Military Confrontation Development: recent processes taken places in the South Caucasus mainly in conjunction with so-called “Zangezur Corridor” (see in more detail below Case-study) and Nagorno Karabakh problem where two peacekeeper missions are available – the Russian Federation military contingent and the EU Military Monitoring Mission operate. Regarding the “Zangezur Corridor” where Iran and Azerbaijan and with together Armenia interests are being intertwisted. However, Azerbaijan and Iran are at the edge of war wagging and in nearest future low intensity military conflict could be developed. Iran allied with Armenia and even can provide military assistance and even provoke a small scale military intervention in order to provide its military interests in order to defender “Zangezur Corridor” bordering between Azerbaijan and Iran. By the way, on April 9 of 2023 two high level officials of Iran and Armenia met in Tehran – Secretary to National Security Council of Armenia, “grey cardinal” of the Armenian politics Armen Grigorian and Secretary to Supreme Council of National Security of Iran Islamic Republic Ali Shamkhani. By the way, namely Ali Shamkhani noted that if geographical changes occurs in the region, it will be linked with military conflict and he certainly deems Azerbaijan Armed Forces attempts to seize “Zangezur Corridor” and even in Nagorno Karabakh so-called “Lachin Corridor” connected the Nagorno Karabakh region with Armenia and now being under controlled by the Russian peacekeepers. Iranian Special Revolutionary Islamic Guard Corp military formations have been converted on military readiness level#1 across the border with Azerbaijan. The situation deterioration between Iran and Azerbaijan formally started when the Azerbaijan opened its diplomatic mission – Embassy in Israel and launched strategic partnership cooperation with the country. In conjunction with more deterioration situation in the Middle East region between Israel and Iran either in Syria, Lebanon or in Gaza sector and if Israel starts realize its plan on Air Strategic Offense on Iran in order to suspend its nuclear project, the situation would be strained in the South Caucasus. Hence, alliance conflict could be inflamed with proper ones: Turkey-Azerbaijan-Pakistan vs. Russia-Iran-Armenia. At time being, Turkey is refraining with engaging in conflict scenario with Iran unless the Presidential elections are held on May 14, 2023. However, the regional security current modality: 3+3 (Armenia, Georgia, Azerbaijan as local actors and regional hegemons – Russia, Iran and Turkey) is the only one fragile stability fora but anyway the military confrontation stage is very real to develop;

The Second Scenario – Geoeconomic War between Russia and USA in the region: the scenario and confrontation between two global powers the USA and Russia is very real one and linked with realization of proper geoeconomic projects – Russia promoted “North-South Transit Corridor” from Sankt-Petersburg till Mumbai (India) and the USA promoted also “North-South” Transit Road in case of “Three Sea Concept” with domination in the Black Sea Region. Hence, the Russia-USA geoeconomic war is very real one and could strain the geopolitical landscape in the region. Both powers are confronting to get direct access to China mega-geoeconomic project “One Belt, One Road” with around $1 trillion. The confrontation line is being dwelled in realization so-called “Anaklia Sea Port” project and the USA also launched its geopolitical game. On March 15, 2023 the Senate adopted new “Black Sea Security Act” where the official Washington declared as its privileged geopolitical zone the Black Sea Basin and submitted the proper strategy how to realize the Act. Hence, the geoeconomic war between Russia and the USA is actually de-facto underway already. The scenario is being developed in real case and who wins the game situation determined.

The Third Scenario – Geoeconomic War between Russia and China in the region: China’s interests toward the region in aegis of the Trans-Caspian Transit Corridor (Middle Transit Corridor) increased since sanction policy imposition on Russia by the Western community that forged blocking the shortest Trans-Baikal Transit Eurasian Corridor via Russian territories connected China to the EU zone as well as blocking also Arctic Maritime Transit Network. Moreover, stiff geopolitical and geostrategic instability in the Persian Gulf and Red Sea basin and blocking the “One Belt, One Road” Maritime project transit capabilities, forced the Chinese political leadership to exploit only remained de-facto real sole Trans-Caspian Transit Corridor opportunities with construction in Anaklia deep-seated port in Georgia and ship put by land network the cargos and goods via the “Middle Transit Corridor”. The project clashes with the Russia’s own geoeconomic project realization “North-South Transit Route” launching from Sankt-Petersburg to Mumbai (India) where the South Caucasus is a linchpin in realization of the Russia’s project. That is why Russia seeks to set up very near to the Georgian Anaklia sea port, in Ochamchire occupied territory of Abkhazia in Georgia a special naval base. It means that China and Russia will start their own geoeconomic war for the domination at the South Caucasus region that could be converted into geopolitical confrontation between the actors. 

 

 

 

 

 

 

Conclusion

 

Moreover, in conjunction with traditional military threats, mentioned above, are coming out on the scene so-called „non-traditional” military threats – international terrorism, drug smuggling and drug cartels activation, aggressive separatism, violent non-state actors, etc. Hence, degradation of the essence of collective security provisions in the Black Sea Region and Basin due to the „New Cold War” confrontation increases tendency multiplying those non-traditional military threats and challenges undermining basis of the regional security and national security of the regional actors and creating „anarchic disorder” modality in the 21st Century. As a result, the Caucasus is a significant location by connecting Middle East to Asia, Central Asia to Europe. Moreover, it has borders with Black Sea and Caspian Sea which are important for energy resources. By the way, it has ethnic and separatist conflicts that effected the development of the region and the Caucasus states’ internal and external policies. The west tried to provide energy without Russia, and Georgia is playing important role for transportation of Caspian oil and gas reserves to the West. Turkey has good relations with Georgia and NATO. On the other meaning, Turkey has bases on its territory against Russia and it provides security of these energy corridor by using NATO’s influence in the region. Thus, the west is directly or indirectly in on the region with a NATO’s member country, Turkey. To provide security, stability, economic stability, democracy, securing energy corridor and existence of Georgia and the Caucasus is important mission for Turkey and the west. So that, Turkey and Georgia have to enough power and policy with regard to security and foreign policy to support stability in the region.

The geo-economic and geopolitical importance of a particular region is characterized by long-term economic, management, territorial-spatial, and other factors, as well as their impact on foreign relations and international processes. The Caucasus has always been a zone of interest of many states of Europe and Asia, as well as a cluster of sociopolitical and economic contradictions. The current state of the world is such that more and more countries are inclined to view the Caucasus as a zone of their interests, which is largely due to the rising need of highly developed states for energy and raw material resources and their interest in international projects aimed at producing and transporting Caspian oil and gas, laying communication lines, building infrastructure, and so on.

The regional security implications are neatly imposed by geoeconomic indications, with its components as are to be:

·         Geoeconomic warfare

·         Sanctions and embargos

·         Currency warfare

·         Asset seizures

·         Pipeline warfare

The geoecnomic wars in aegis of the region remain one of the key geopolitical threats sparked with fierce competition of the global power geoecnomic projects with involvement of the regional actors. Russia endorsed and develops its own mega-geoeconomic project „North-South” Transit Corridor (Sankt-Petersburg and Mumbai). The USA exploits and proposes its own version of the „North-South” mega-geoeconomic project also transcended the South Caspian and Caspian Basin but started from Alexanropolus (Greece) and ended up in Mumbai (India). The Chinese mega-geoeconomic project „One Belt, One Road” (OBOR) with $1 trillion in worth promotes further on „Middle Transit Corridor” route also transcended the Caucasus-Caspian Region. That is why the geoeconbomic wars are to be wagging into the following format:

v  Russia „North-South” vs. USA „North-South”

v  USA „North-South” vs. China „OBOR”

All these above-mentioned factors clearly illustrated how and in which way the “New Cold War” dominates and abrogate fully implementation of the national interests of the regional nations. Namely connotation of “New Cold War” dilemma primarily lead to non-harmonization of the national interests per se nations. As it is known, foreign policy issues typically engage a multiplicity of values and interests that are often difficult to harmonize[1]. However, the confrontation modality even in aegis of New Cold War context and being labelled as “Central Eurasian Rimland” land between Eurasian Union and Euro-Atlantic Community could make possible to easy the stalemate via transforming the Caucasus region as “peaceful island” and appease two confronted global powers and alliances – a future forecast how is the scenario is possible to be fulfilled and promoted.

Hence, the Caucasus region as an indispensable part of the Black Sea Area is one of the main factors in the make-up of security and stability in Europe and Asia. In addition to the numerous other issues in the region, ethnic conflicts, ongoing state-building processes, the presence of vast natural resources, and strategic transport and energy corridors mean that the region is an extremely important and sensitive area.

 Map#1: Russia’s “North-South” Geoeconomic Project


 

Vakhtang Maisaia

Professor, Ph.D. in political science and military strategy

 



[1] Alexander L. George (2006), “On Foreign Policy: Unfinished Business”, Paradigm Publishers, London, p.5

 

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