Stanislav Tarasov – Baku will change foreign policy. But how?
April 14, 2020 – Stanislav Tarasov – /regnum.ru/news/
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Amid the rampant pandemic and falling oil prices, Baku will simply have to restructure its foreign policy sooner or later, join new, possibly forced alliances. It is possible that he will begin to more actively and more “creatively” look for new approaches to the settlement of the Nagorno-Karabakh conflict and build relations with Armenia.
STANISLAV TARASOV, April 14, 2020, 11:12 – REGNUM On April 13, a telephone conversation took place between the Minister of Foreign Affairs of the Republic of Azerbaijan Elmar Mammadyarov and the Minister of Foreign Affairs of the Russian Federation Sergey Lavrov. These were the second telephone talks between the foreign ministers of Azerbaijan and Russia over the past few days. Previous negotiations took place on April 10, which indicates that the intensive diplomatic dialogue between Moscow and Baku did not appear from scratch. The official statements by the press services of the Russian and Azerbaijani Foreign Ministries regarding these negotiations are almost identical. But there are nuances.
So, the message of the press service of the Russian Foreign Ministry regarding the telephone conversations on April 10, Lavrov and Mammadyarov briefly and concisely: “The heads of the foreign affairs agencies discussed the situation in both countries in connection with the COVID-19 coronavirus pandemic, steps to counteract the spread of infection and neutralize its negative consequences” .
As for the negotiations on April 13, the list of issues discussed by the parties was somewhat expanded: “The heads of the foreign affairs agencies discussed topical issues in bilateral relations and foreign policy coordination, including tasks related to countering the coronavirus infection and its consequences, as well as general problems of biomedical safety.
Possible further steps on the Nagorno-Karabakh settlement are considered taking into account the proposals of the representatives of Russia, the USA and France as co-chairs of the OSCE Minsk Group. The topics of interaction between Moscow and Baku in the CIS were also touched upon. ”
As for the press service of the Ministry of Foreign Affairs of Azerbaijan, she introduced some details that Moscow does not mention, “the current situation on the border of the two countries” and the position of the parties that “the temporary closure of the borders between the two countries will in no way affect cargo transportation, as well as relations with other countries and “issues of cooperation within international organizations, including the UN and the Non-Aligned Movement”.
This suggests that the negotiations between Lavrov and Mamedyarov were broader, although the first problem was the fight against the pandemic, which Moscow is closely observing. At least due to the fact that Azerbaijan borders on Iran, where the infection continues to rage. Coronavirus, of course, reached Azerbaijan, although the first cases of the disease were detected there later than in Georgia.
In this regard, the authorities of the republic are taking measures, following the recommendations of WHO. True, the epidemic in the republic did not reach the peak that manifested itself in neighboring Iran, but epidemiologists do not exclude a sharp increase in the incidence, with rather weak hopes for warming and the onset of summer.
And no one knows how long this “invasion” can last. There is another point: the state of the country’s economy, tied to oil and gas, in the conditions, firstly, of a sharp drop in oil prices, and secondly, of a sharp decline in economic activity around the world, including countries that are the main consumers of Azerbaijani energy resources.
It is one thing to build an action strategy and conduct foreign policy based on predictive ideas about the relative short-term nature of the current situation, hoping to hold out until “better times”. Another is to face long-term and largely uncertain factors.
No one knows when and how the pandemic will end. As for oil prices, there is no clarity after the OPEC + deal to reduce its production. Recall that it defines an interim end date – April 2020, which is tied to the crisis due to the coronavirus.
But Russian Energy Minister Alexander Novak said that the negotiations on a new OPEC + deal considered a time frame of two, three, or even four years. This means that some participants seriously admit that the period of extremely low oil demand may last until 2024.
Is Azerbaijan ready for such a course of events? Will the forecasts of the American publication Eurasianet come true that the reserve fund of Baku, the “airbag”, is designed for only a few months and there are practically no resources to neutralize possible external risks for the national economy?
And not only this. Azerbaijan will lose its former geopolitical importance in the region, not to mention the aspirations declared earlier to act as almost a guarantor of Europe’s energy security.
The situation has changed, and this is fundamentally for everyone, but if we talk about Transcaucasia, it is especially for Azerbaijan, since it has a high dependence on the oil sector, where hydrocarbons make up about 40% of gross domestic product, 90% of exports and two-thirds of budget revenues. Most likely, it will not be possible to quickly compensate for the fall in oil prices.
The economic diversification program did not bring quick effective results, and the President of Azerbaijan Ilham Aliyev will not be able to go for the reduction of large social expenses planned in the budget for this year for political reasons.
Although Baku still has a certain room for maneuver – the accumulated reserves make it possible to maintain the national currency exchange rate, but with the development of a long-term crisis scenario, events of five years ago are not excluded.
In this regard, the international rating agency Fitch Ratings affirmed the long-term issuer default rating (IDR) of Azerbaijan in foreign and local currency at BB +, but revised the rating outlook from “stable” to “negative”. According to Baku experts, “after 2015 and 2016, when there was a devastating decline in oil prices, Azerbaijan (and not only it) is facing one of the most catastrophic recessions in world history.”
It is clear that in such circumstances, if the crisis situation becomes long-term, Baku will simply be forced to restructure its foreign policy sooner or later, to enter into new, possibly forced alliances. It is possible that he will begin to more actively and more “creatively” look for new approaches to the settlement of the Nagorno-Karabakh conflict and build relations with Armenia.
Because the chances to act according to the inertial scenario are already lost. As for Russia, which has nothing to do with the emergence of the current global systemic crisis, it only needs to observe the course of events in the region and hope that Baku will cope with its problems. We ourselves have enough of them.
April 14, 2020
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