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bne November 2023
Opinion 65
24 hours of devastating Azerbaijani attacks. Ukraine’s ardent backer, European Commission President Ursula von der Leyen, has yet to comment on Nagorno-Karabakh.
But the Nagorno-Karabakh conflict does demonstrate that there is an “international economic order”, even if there is no “rules-based” one, and Baku has capitalised on this to ensure it can act with impunity.
Despite continued clashes on the dividing lines outside Nagorno-Karabakh and in Armenia, von der Leyen last
July travelled to Baku and agreed a deal that would see the European Union agreed to purchase up to 20 billion cubic metres of Azerbaijani natural gas within five years, doubling its purchases in the previous year as Europe shifted rapidly away from its long dependence on Russian natural gas imports. Doubts that Baku would be able to deliver such supplies were quickly realised after Baku agreed later that year to begin importing some Russian gas to free up more
of its own domestically produced gas for exports, but had little effect.
Azerbaijan has understood this true structure of the international order far better than the West has, despite the fact that the West, and in particular, the United States through the globally dominant role of the dollar, leads that order.
It is that very position that has made sanctions against Russia effective. With the Kremlin cut off from most international capital markets and subject to trade restrictions, it has had
to shift its efforts to attempts to circumvent the restrictions even in its own backyard. Although the importance of Russia’s commodity base for the world economy means that it has continued to find willing partners to help it mitigate the sanctions, it has no partner willing to openly defy the sanctions except tiny Belarus and similarly sanctions- afflicted North Korea and Iran. Even Beijing, which offers Russia rhetorical support, has ensured that its bite is far weaker than its bark, with the development bans that it
leads to suspending loans in Russia in the aftermath of the sanctions for fear they too will come under such restrictions.
Another tragedy is that Azerbaijan would likely be a far more susceptible target for such sanctions in terms of pushing it to pursue an alternate strategy. The more a country is integrated into the Western-led international economic order, the
more likely it is to pay sanctions and sanctions threats heed. Hence why Kazakh President Kassym-Jomart Tokayev has
just this week again declared that Kazakhstan will support
the sanctions regime whereas President Sadyr Japarov of Kyrgyzstan – whose sole major link with the international markets was severed last year with a deal to take over the
share of the Kumtor Gold Mine held by a Canadian-list miner
– is unlikely to make such a declaration. Azerbaijan’s key hydrocarbons partner is British Petroleum and the country’s primary economic partner, not just for arms sales, is the West, where its companies have long banked and sought investment.
And although they do not have the renown that some of the more prominent Russian oligarchs did before the full-scale invasion in 2022, its elite at least is, if not more so, keen on keeping their Western treasures – and more likely to have influence in Baku’s halls of power than Russian oligarchs have in Putin’s Russia.
Compare the daughters of the two country’s respective presidents: Vladimir Putin’s are understood to reside in Moscow and have never sought a platform in the West, whereas Aliyev’s daughters have not only been linked
to a multi-million dollar London property portfolio in investigations led by the Organised Crime and Corruption Reporting Project (OCCRP) but even launched their own glossy fashion magazine in the city in 2012.
Azerbaijan has long recognised that it could take advantage
of this misunderstanding, spending millions on lobbying
to advance its claim to be a key Western energy supplier, including hiring former British Prime Minister Tony Blair to push its cause. Even today some of its advocates can be found on social media cheering on the ethnic cleansing of Nagorno- Karabakh. And when European officials are pressed on why they are unwilling to act, they invoke the same. Baku is also aware that the West’s values grow increasingly unimportant the further they get away from Europe; the South Caucasus is on the wrong side of the Black Sea compared to Ukraine. When ethnic Armenian forces were in the more powerful position before the 2020 war, there was also no action to try and pressure them into concessions such as giving up the districts around the Nagorno-Karabakh Republic in exchange for peace.
The punch of political ongoings in the South Caucasus simply lacks the same currency in the West as do those in Europe, where the West has been willing to use sanctions threats not just around the conflict in Ukraine but also in relation to spiking tensions between Serbia and Kosovo. This extends beyond the conflict in Nagorno-Karabakh or between Armenia and Azerbaijan. When Azerbaijan detained one of its own, academic Gubad Ibadoghlu, earlier this year after he investigated potential corruption in funds intended for Nagorno-Karabakh’s reconstruction, there was also no serious action, despite the fact he has held posts at the London School of Economics, New York University, and other top-tier institutions across the West.
There is only a rules-based order if the West uses its leading position in the international economic order to uphold it. But because the West fails to understand, or at least acknowledge, that is the international economic order rather than the rules- based order on which its leading position is based, there can be no hope that a genuine rules-based order will ever materialise.
Maximilian Hess is a political risk and foreign policy analyst based in London. He also serves as a fellow at the Foreign Policy Research Institute in Philadelphia, Pennsylvania. Follow him on twitter at @zakavkaza.
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