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August 19, 2013

Putin Drops In, America Drops Out

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For the first time in his third term, Russian president Vladimir Putin has visited Azerbaijan. The former Soviet republic is an emerging leader in the South Caucasus region, and Putin's high-profile visit was another way to demonstrate to Washington that Russia’s zone of "privileged interests" today covers almost all post-Soviet republics with the exception of Baltics.

Since 2008, the United States has diminished its involvement in the post-Soviet space. It has deferred to Russia in all areas except the transit network to Afghanistan—gone after 2014. In the meantime, Moscow has happily filled the vacuum created by Washington.

On August 13, Putin arrived in Baku together with two Russian warships and a large delegation of ministers and business leaders. Among the latter were Foreign Minister Sergey Lavrov, Defense Minister Sergey Shoygu, Energy Minister Alexander Novak, Emergency Situations Minister Vladimir Puchkov, Transport Minister Maxim Sokolov, Minister of the Economy Alexei Ulyukayev, and Igor Bratchikov, head of the Russian delegation to the multilateral talks on the Caspian Sea. Also attending were leaders of Russia’s largest weapons export and energy companies, including Rosoboronexport’s Anatoly Isaikin, Rosneft’s Igor Sechin and Lukoil’s Vagit Alekperov.

Putin's visit came just two month before Azerbaijan’s presidential elections. For an act of public support for the incumbent president Ilham Aliyev and as an effort to strengthen the ties between the two countries, Putin’s timing could not have been better.

Not that Putin has much choice. Stability in the South Caucasus, and indirectly in Central Asia, directly correlates with stability in Azerbaijan. Russia perceives Aliyev's presidency as a continuation of the course charted by his father, Heydar Aliyev, with whom Putin had a warm relationship. Azerbaijan is developing a partnership with Russia, while staying away from a full-fledged alliance. Its archenemy Armenia is doing the same.

Putin and Ilham Aliyev are bosom buddies. But the failure by Russia to put forth a viable opposition candidate following the withdrawal of the Oscar-winning director and Russian citizen Rustam Ibrahimbekov pretty much guarantees Aliyev’s victory.

In general, this outcome will please Putin, since developing bilateral economic cooperation is better for Moscow than having a chill while Baku moves closer to Ankara, Brussels and Washington.

However, Russia has not yet pushed Azerbaijan's accession to its economic and political-military integration structures, such as the Eurasian Economic Union, the Customs Union, the Eurasian Economic Community (EurAsEC), and CSTO (the military bloc), although such discussions do occur from time to time.

The problem is, the Obama White House and State Department are losing interest in the post-Soviet space, and their interest may decline even further following the departure of NATO forces from Afghanistan.

At the same time, Baku and Moscow are working closely within the framework of the Organization of the Black Sea Economic Cooperation (BSEC). Azerbaijan is Russia’s largest trading partner in the South Caucasus, having supplied Gazprom 1.5 billion cubic meters of gas in 2012. Clearly, the two leaders had a lot to talk about, especially since Putin was accompanied by the oil magnates Sechin and Alekperov.

The growing role of Azerbaijan as an independent energy exporter and transit country for Central Asian resources to Europe worries Russia. Moscow is accustomed to being the chief supplier of oil and gas to the European markets.

Yet, Russia would like to get a piece of the Azerbaijani energy bonanza. Rosneft, the Russian state-controlled oil behemoth, is interested in joining the Absheron gas project. This would bring Rosneft to the lucrative European gas market, although in direct competition with another Russian stalwart—Gazprom. During the visit, the heads of the Russian and Azerbaijani state oil companies, Rosneft’s Sechin and SOCAR’s Abdullayev, signed an energy-cooperation agreement.

The Nagorno-Karabakh conflict between Armenia and Azerbaijan remains the main sticking point between the two nations, but Putin’s visit likely made no a significant difference on this issue. Putin reiterated that the dispute needs to be resolved “politically”—not through a war. This is a signal to Azerbaijan, whose military budget alone is greater than Armenia’s state budget. Due to hydrocarbon revenues, Azeri military capabilities are growing, including weapons purchased from Russia.

The Kremlin is not ready or willing to discuss any new initiatives and proposals that could potentially lead to solving the protracted conflict. This is largely due to the simple fact that Nagorno-Karabakh is an important guarantee of Russia’s political and military presence in the South Caucasus.

Following four years of high-level mediation led by the then president Dmitry Medvedev, the Kremlin has lowered its profile as a go-between. This gives Washington an opportunity to strengthen its relations with Azerbaijan and Armenia and restore its position in the region.

The United States could have taken advantage of this situation by proposing to work together with Russia on finding a solution to the Nagorno-Karabakh dispute. Secretary of State John Kerry has spoken repeatedly about the need to resolve the conflict. He enjoys an especially close relationship with Armenia from his days in the Senate, when he had ties to the Armenian diaspora.

But the administration has obviously decided to dedicate Kerry’s valuable time on even more ambitious, labor-intensive and long-term conflicts—in the Middle East. Unfortunately, this leaves the field wide open for Russia to reestablish its influence in the South Caucasus.

-Ariel Cohen is The Heritage Foundation’s senior research fellow in Russian and Eurasian studies and international energy policy. Follow him on Twitter: @Dr_Ariel_Cohen

First appeared in The National Interest.

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