Page 64 - bneMag Oct23

64 Opinion
bne October 2023
to work more closely with Azerbaijan as a gas transit hub and source of non-Russian oil. European Commission President Ursula von der Leyen travelled to Baku last year to meet with Azerbaijani strongman Aliyev and signed off on a big gas delivery deal. She called Aliyev a “reliable partner” and failed to mention any of Azerbaijan's well-documented human rights abuses.
“That is all the more relevant as the next big issue is the planned transport route [from the main part of Azerbaijan] across Armenia to Azerbaijan’s exclave of Nakhchivan. Russia, Azerbaijan, and Turkey all have a shared interest in imposing their own version of what the latter two call the Zangezur Corridor with as little Armenian control of the route as possible – and perhaps by force,” says de Waal.
Aliyev has also started to talk about "Western Azerbaijan" to describe southern Armenia’s Syunik region, which is home to a large Azeri population. Given recent developments in Karabakh, his comments have become ominous.
While acknowledging Azerbaijan's past hardships, particularly during the 1990s, and the resulting displacement of its population in the first war with Armenia which the Azeris lost, it is essential to steer clear of civilisational rhetoric, says de Waal. Yet, the use of force to deal with unresolved outcomes of the second conflict in 2020 renders the "occupation" argument obsolete. Aliyev's aggressive stance and recent remarks suggest a need for a more cautious approach to Baku by Europe.
“Aliyev qualified that this return [by Azerbaijan to the entirety of the enclave] would happen 'peacefully.' But after what happened in Karabakh, how seriously can reassurance be taken?” asks de Waal.
RIDDLE
Von der Leyen blankly ignored Aliev’s dictatorial record during her meeting, yet she rails against Russian President Vladimir Putin’s record on an almost daily basis.
“Aggression continues on the home front, too. Azerbaijan’s democracy ranking with Freedom House is rock-bottom. In July the well-known economist and opposition activist Gubad Ibadoghlu, linked to U.S. universities and the London School of Economics, was arrested on palpably bogus charges and is now in ill health in detention,” says de Waal.
But the EU has been willing to ignore all of this for the sake of energy deals and attracting regional players into its anti-Russia camp. Azerbaijan's appeal to the West centres around oil and gas, business and geography. Baku has positioned itself as the sole country bridging Russia and Iran with essential east-west oil, gas, and transport infrastructure along the Middle Corridor.
“In Western capitals this frequently produced a silo effect. One part of the establishment – in the Brussels case, Michel and the European External Action Service – would press for peacemaking and resolution of the conflict with Armenia. Another – the European Commission in Brussels – would hold talks with Baku on energy and transport projects,” says de Waal.
What little trust there was between Brussels and Baku has now been broken. Aliyev has crossed a line with his unprovoked attack on Karabakh. The EU says it stands for values, and those values are now on the line.
“In short, it is time for the EU to talk a lot tougher with Azerbaijan,” says de Waal.
Russia’s vanishing trade surplus Vladislav Inozemtsev of the Centre for Post-Industrial Studies
Over the last quarter century, the Russian economy has experienced a roller coaster ride: it has seen both rapid growth in the 2000s and the failures of 1998 and 2008, not to mention the stagnation of the 2010s and the ensuing restructure to a "war footing" in recent months. Yet regardless of whether things were up or down, one feature remained constant and unchanged: from its very birth, the Russian Federation acted as a net exporter, maintaining a positive balance in foreign trade in any conditions.
Any economist will say that this gap between exports and imports was where the Russian elite extracted growing budget revenues, where entrepreneurs close and not very close to power enriched themselves, and where Russians received growing benefits and pensions. Oil and gas
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have always remained the key exports and the driver of a trade surplus.
In modern Russia, the trade surplus has grown quite steadily – and fluctuations in global market conditions have had
a much more significant impact on it than the Kremlin’s policy: in 2008, 2014 and 2022 its values reached new records despite Russian aggression against Georgia and Ukraine, while local minimums were recorded against the backdrop of collapses in 1998, 2009 and 2016. Average annual figures were $45.7bn in 1997-2001, $109.8bn in 2002-2006, and
then it reached a plateau: $174.2bn in 2007-2011, $178.7bn in 2012-2016 and $165.1bn in 2017-2021, setting a spectacular record at the end of 2022 ($332.4bn). At the same time, the foreign trade surplus has never been less than the volume of