Commission on Security and Cooperation in Europe

Testimony :: Brenda Shaffer
Visiting Researcher, Center for Eurasian, Russian and East European Studies - Georgetown University


Dear members of the U.S. Helsinki Commission, 

The Republic of Azerbaijan is a strategically important country that borders Russia, Iran, and Turkey. Azerbaijan is important to a number of wider U.S. foreign policy issues, including policy toward Russia, relations with Iran, nuclear non-proliferation, Middle Eastern regional security, and European energy security. In its two decades of independence, the Republic of Azerbaijan has stood together with the U.S. as an ally on almost every major policy issue, including by sending troops to serve together with U.S. forces in Kosovo, Iraq, and Afghanistan. Azerbaijan has also served as the main transit point of U.S. troops and equipment into Afghanistan. Most recently, Azerbaijan was one of the few states bordering Russia that joined the U.S.-led effort at the United Nations to condemn Moscow’s annexation of Crimea. 

Over a third of the population of Iran is ethnically Azerbaijani; thus, developments in Azerbaijan affect developments in its neighbor to the south, including Iran’s domestic stability. Azerbaijan is a Muslim-majority country that has not established any special status for Islam, observes complete separation of religion and state, and protects equal rights for citizens regardless of religious or ethnic origin. The Republic of Azerbaijan not only allows religious freedom, but observes freedom from religious coercion. During its short period of independence prior to being conquered by the USSR, Azerbaijan in 1918 was the first Muslim-majority state to grant women suffrage, two years before the United States and long before most of Europe. 

Despite close cooperation between Azerbaijan and the United States on almost every strategic issue, relations between Washington and Baku are very complicated and occasionally tenuous. In this testimony, I will discuss Azerbaijan’s strategic foreign policy approach, its relations with a number of its neighbors (Russia, Iran, and Armenia), trends in the South Caucasus region, and suggestions for how the U.S. can best support its national interests in the South Caucasus region. 

Azerbaijan’s foreign policy Developments in Azerbaijan and the South Caucasus are strongly influenced by regional and global powers: the region is located at the crossroads of two continents and borders three important geopolitical actors: Turkey, Iran, and Russia. Due to its strategic location, the region is a focus of geopolitical competition. 

Azerbaijan possesses a strong strategic orientation toward the United States and Europe, but is also mindful of the constraints of its neighborhood. Consequently, Baku attempts to maintain a potentially treacherous balancing act in its policies—one that allows close cooperation with the U.S. without encouraging the wrath of its potentially dangerous neighbors, Iran and Russia. As a Muslim-majority country, Azerbaijan maintains close cultural ties with many Muslim-majority states, but religious and cultural factors play no role in determining the state’s alliances or main strategies of cooperation. In fact, one of Azerbaijan’s closest alliances is with Israel. Azerbaijan is Israel’s largest supplier of oil, and the two states share strategic cooperation on a number of issues. 

Azerbaijan is rich in oil and natural gas reserves, and its exporting of these petroleum resources westward has been a major feature of its foreign policy since independence. Azerbaijan is among the top twenty oil producers in the world, producing close to a million barrels a day (850,000 barrels of which are exported). Azerbaijan also exports natural gas to most of its neighbors and will soon play an important role in enhancing Europe’s energy security. At the end of 2013, Azerbaijan and a number of international investors announced their final investment decision on the Southern Gas Corridor, which is designed to bring Azerbaijan’s natural gas volumes into Europe. This ambitious project will provide the first new volumes of natural gas into Europe in decades and allow a number of states along the route to improve the security of their energy supply and lower their dependence on Russia. This $45 billion project that crosses seven countries and six regulatory jurisdictions is being built in such a way that it can easily be expanded, and can thus transit additional volumes of gas from new sources in the future. At the same time, adjoining pipelines can be built to reach additional markets that need to improve their security of supply, such as the Balkans. The Southern Corridor will be the catalyst for natural gas interconnectors in Southern Europe. For a number of years, the European Union has spoken about the importance of interconnectors, and this project has encouraged the development of these connecting pipelines between different European countries.

 Azerbaijan could have sold its natural gas at a higher profit to neighboring Iran and Russia, but embarked on this ambitious project in order to link itself with Europe and lower its dependence on these neighboring states. This strategic choice entails closer cooperation with Europe, Turkey and the U.S., but also elicits potentially negative responses from Russia and Iran. 

Since Azerbaijan’s independence with the breakup of the Soviet Union, the resolution of the Nagorno-Karabakh conflict has been the major focus of its national security and foreign policies. This conflict between Armenia and Azerbaijan started on the eve of the Soviet breakup, as ethnic Armenians in Azerbaijan’s province of Nagorno-Karabakh rallied to join Armenia. Moscow played the newly independent Armenia and Azerbaijan against each other, turning a local dispute over the status of a territory inhabited by 90,000 people into a regional war from 1992 to 1994. Eventually, Armenia was victorious, and it took control of Nagorno-Karabakh and seven other Azerbaijani districts. As a result of the war, Armenia now occupies 20 percent of the territory of Azerbaijan (as legally recognized by the U.S. government), and close to one million Azerbaijani refugees and internally displaced persons were left homeless. 6 Relations with Russia and Iran Azerbaijan borders—and has challenging relations with—both Russia and Iran. Moscow seeks to limit Azerbaijan’s cooperation with the United States and Europe, an approach it takes with most of the former Soviet states. Moscow has tried to block Azerbaijan’s energy export projects westward, and has attempted to coerce Baku to route its energy resources to Russia. 

At the same time, Azerbaijan’s neighbor to the south, Iran, also works to undermine Azerbaijan’s stability. Iran is a multi-ethnic state, and its domestic security could be affected by developments in the neighboring Republic of Azerbaijan.1 Half of Iran’s population is comprised of non-Persian ethnic minorities, with the Azerbaijanis the largest group at close to one-third of the country’s population. The majority of residents in the northwestern provinces of Iran, contiguous to the border with the Republic of Azerbaijan, are Azerbaijanis. One reason that Iran supports Armenia in its conflict with Azerbaijan is that it prefers Azerbaijan to be embroiled in a conflict and consequently unable to serve as a source of support or emulation for the ethnic Azerbaijanis in Iran. 

As part of its policy of undermining Azerbaijan’s security, Tehran has supported Armenia in its war against Azerbaijan and engaged in broad security, military, and economic cooperation with Yerevan since 1992. During the war between Armenia and Azerbaijan, Iran supplied Armenia with fuel and food and allowed the flow of arms and goods through its territory to Armenia. 

For more on ethnicity in Iran, see Brenda Shaffer, Borders and Brethren: Iran and the Challenge of Azerbaijani Identity (Cambridge, MA: MIT Press, 2002). 7 Tehran has also sponsored a number of terrorist cells and attempted terrorist attacks inside Azerbaijan, with targets that have included the U.S. embassy, the U.S. ambassador, the Israeli ambassador and local Jewish institutions in Baku. Due to its long and heavily crossed border with Azerbaijan, Tehran frequently attempts to use Azerbaijani territory to carry out attacks on Western, Israeli, and Jewish targets. 

The Caucasus: Conflict, domestic politics, and foreign powers In the South Caucasus region—as in most of the areas of the former Soviet Union that border Russia—domestic politics, foreign policy, and military conflicts are intertwined. Most of the powers involved in the South Caucasus, especially Russia and Iran, use threats to the stability of the region’s governments and violent conflicts as tools to promote their influence and interests. 8 To promote its dominance over bordering states, Russia has proved ready to use military force (as it has in Ukraine and Georgia); to work through electoral processes and civil society organizations (Russian citizens ran in recent elections to lead Azerbaijan, Georgia, and Latvia) to get its way; and to promote separatists as a lever of influence (as it has done in Moldova, Ukraine, Georgia, and Azerbaijan). If the United States is going to succeed in promoting conflict resolution and democratization in the region, as well as its own security interests, it must recognize this dynamic of regional politics. 

External support was a key factor in the emergence of the conflicts that appeared in the Caucasus during the post-Soviet period. In the former Soviet Union, there were hundreds of disjunctures where ethnic and political borders did not line up, but ethnic conflicts only broke out (with the exception of Chechnya), where Russia supported the secessionist forces. These conflicts cannot be resolved only through agreement between the secessionist forces and the country they have broken away from, but their strategic backer has to be on board. These conflicts are not ethnic conflicts, but proxy wars between Russia and in most cases forces that want stronger integration with the West. The conflicts in the Caucasus, including Nagorno-Karabakh, continue to provide outside powers with significant leverage in the region. 

In the last two decades, the United States has actively supported efforts to resolve the Nagorno-Karabakh conflict between Azerbaijan and Armenia, within the framework of the OSCE Minsk Group, which is composed of representatives of Russia, the United States, and France. These efforts have failed primarily because the United States has treated Armenia and Azerbaijan as the primary protagonists in the dispute while ignoring Russia’s role in prolonging the conflict. For example, successive U.S. secretaries of state and special negotiators have criticized the presidents of Armenia and Azerbaijan for “not preparing their people for peace,” as the leaders of the Minsk Group chided last year, and for failing to reach an agreement. The U.S. has granted millions of dollars to aid to programs aimed at “building ties between the two societies,” but has never formed a strategy for dealing with Moscow because, until the Crimea invasion, Washington never acknowledged the extent to which Moscow uses ethnic conflicts around the region as a lever of influence. 

On May 7, the U.S. representative to the OSCE Minsk Group, Ambassador James Warlick, made an important statement articulating the long-standing U.S. policy on the Nagorno-Karabakh conflict.2 This statement and continued U.S. interest in resolving the conflict are important for the prosperity of the South Caucasus and for removing a lever of Russian and other foreign influence in the region. Moscow will undermine any peace agreement that it does not view in its interest, regardless of the stances of the leaders of Armenia and Azerbaijan. The current status quo of no war, no peace serves Russian interests. The U.S. should stop blaming the leaders of Armenia and Azerbaijan for the dispute and start thinking about how to mitigate Russian opposition to settlement by identifying Russian interests that could be served through resolution of the conflict. Successive U.S. administrations, whether Republican or Democrat, have been loath to bargain with Russia on strategic issues. They have preferred instead to operate on the level of principles (such as “state sovereignty” and “the inapplicability of use of force.”). However, trade-offs are necessary in order to achieve security and allow prosperity in the post-Soviet region. 

In addition, to further support conflict resolution, the US should support Ankara’s policy of linking the opening of the border between Armenia and Turkey to significant advancement in the Nagorno—Karabakh peace process. While increased trade between Armenia and Turkey will be a good development and in the long run could help reduce Yerevan’s dependence on Moscow, this trade should be used as a force for peace. Peace cannot be accomplished without some significant Armenian withdrawal of the occupied territories. The only incentive that Yerevan has to compromise, with the exception of threat of war, is the desire to open the border with Turkey. Thus, the link of the border issue to some compromise on the Nagorno—Karabakh conflict can be used to facilitate trade and at the same time avert war. 

In the states that border Russia, there is an overlap between domestic politics and foreign intervention. While the U.S. and the Soviet Union battled it out during the 1970s through intra-state wars in the developing world, today elections and the funding of NGOs and political movements have replaced the proxy wars. During a presentation this year in Washington, D.C., a senior Georgian official pointed out that Russia has recently begun funding NGOs in Georgia to campaign for Georgian membership in Moscow’s Eurasian Economic Union instead of the EU Partnership Program. Leaders of NGOs and opposition political movements in the South Caucasus have proudly stated that they take money from Iran, Russia, and foreign religious organizations—from whomever will help them get into power. These groups have accepted outside assistance even when the agendas of these foreign states and organizations contradict their own state’s national sovereignty and the long-term democratic development of the South Caucasus states. The long-standing U.S. policy that rests on the premise that a “vibrant civil society creates stability” ignores the fact that in many parts of the world, elements of civil society are connected to foreign countries, which have no interest in democracy or stability.

Relations with the United States: Challenges and moving forward 

While U.S. officials frequently acknowledge the important role that Azerbaijan plays in security issues that are of concern to the United States, understanding security needs should be a two-way street. Washington should also address Baku’s security needs and its complex strategic environment, where both the Nagorno-Karabakh conflict and Azerbaijan’s domestic political arena serve as theaters for Russia and other neighboring powers to promote their interests. 

Washington’s actions also often contradict its own long-standing and clearly articulated policies on the region. For instance, the U.S. government officially recognizes Nagorno-Karabakh and the adjacent seven regions as under Armenian occupation. Yet, at the urging of leading Armenian-American political organizations, Congress imposed sanctions on Azerbaijan in 1992 that have not been removed in over twenty years.3 Congress also annually earmarks funds for the secessionist local government in Nagorno-Karabakh. These allocations are in violation of U.S. law, since they support settlement activity in occupied territories. Congressional allocations to Nagorno-Karabakh are equivalent to the idea of earmarking funds for Israeli settlements in the occupied West Bank or for the Russian-sponsored local government in Crimea, clearly actions that Congress would not consider taking. However, annually Congress approves the earmark to the occupied territory of Nagorno-Karabakh. 

In the past two decades, the U.S. has asked for Azerbaijan to join it in security initiatives that were important to Washington. Baku has always answered these U.S. requests, despite the fact that they often prompted serious responses and consequences from Russia and Iran. Now, as the Obama Administration hopes to improve relations with Tehran and disengage from Afghanistan and Iraq, it should uphold good relations with its allies in the region and not let these states be destabilized as payback for their cooperation with the U.S. For the United States to succeed in maintaining security and promoting its interests in the region with a smaller actual presence on the ground, it will need its allies more than ever. Washington should prioritize its good relations with states like Azerbaijan, so that Baku will be able to help its allies in the future. 


Multi-ethnic Iran’s Azerbaijani minority 

• Iran is a multi-ethnic state, and over 50 percent of its population is non-Persian. Azerbaijanis are the largest ethnic minority in Iran, comprising over a third of the country’s population. 

• Iran’s ethnic minorities are concentrated in its border provinces, and these groups share cross-border ties with co-ethnics in the neighboring states of Azerbaijan, Turkey, Iraq, Pakistan, and Turkmenistan. 

• Many prominent figures in Iran are ethnic Azerbaijanis, including Iran’s spiritual leader, Sayyid Ali Khamenei, and the head of Iran’s opposition Green Movement, Mir Hossein Mousavi. 

• Even though Azerbaijanis share the Shiite faith and a long history of common statehood with Iran’s Persian majority, Tehran does not allow Azerbaijanis in Iran to operate schools or universities in their native language or use the Azerbaijani language in government institutions. 

• In addition to shared ethnic and cultural ties, many Azerbaijanis from both sides of the border share family ties and engage in trade with each other. 

• Among the approximately 25 million ethnic Azerbaijanis in Iran, there is a broad diversity of attitudes toward the Iranian state. Some Azerbaijanis comprise a core part of Iran’s ruling elite, while others strive for language and cultural rights. But a segment of Azerbaijanis in Iran, especially young people openly identify as Azerbaijanis, oppose Persian-centered rule and struggle against the ruling regime.