Tuesday, August 7, 2007

The fifth-floor office of Azerbaijani President Ilham Aliev offers a breathtaking view of the distant oil platforms in the Caspian Sea. Iran lies beyond those oil platforms that are turning this South Carolina-sized nation of 8 million into a rising energy powerhouse. There are naive observers in Washington who argue that we ought to strike a “grand bargain” with the mullahs in Tehran, but, after spending an hour with the reformist president of this secular Muslim country, it is clear that Washington would do far better to enter into a long-term strategic “grand bargain” with Azerbaijan.

This 46-year-old popularly elected and amiable president is beginning his fourth year in office, and his vision and achievements are persuasive reasons for the United States to advance its relationship with Azerbaijan to a higher economic, political and financial level.

Mr. Aliev points out that tolerance and pluralism are two fundamental characteristics of Azerbaijan. The multi-ethnic fabric of society allows for a “free zone” of religious, cultural and ethnic harmony. Members of the Christian, Jewish, Zoroastrian and Muslim faiths live, work and play side-by-side. The people of Azerbaijan pride themselves on living in a society that respects the rights of other ethnic minorities such as Kurds and Russians.

Modernity is the driving force behind the dynamism that one finds today in Azerbaijan. “Our desire to be secular, progressive, modern and forward-looking,” says the president, “is yet another feature that distinguishes Azerbaijan from other Muslim countries.” Although the people of Azerbaijan pride themselves on having a rich culture and history, they are determined not to allow extremism of any kind to ruin their march toward prosperity and integration into the international community. Mr. Aliev emphasizes: “Religion is in our hearts and should not be on our streets.”

The president’s vision of a modern Azerbaijan got a major boost when he recently authorized the creation of a world-class Diplomatic Academy, headed by Hafiz Pashayev, Azerbaijan’s first ambassador to the United States. This Western-oriented graduate school will house the first comprehensive English-language library in the country and offer young Azeri students an education rooted in secularism and tolerance.

Under Mr. Aliev, Azerbaijan is fast becoming the Kuwait of the former Soviet Union. The International Monetary Fund estimates that by 2010, annual revenues from oil exports will reach $25 billion. By 2020, Azerbaijan’s annual oil revenues will be in excess of $200 billion. The Oil Fund, established by the late president of Azerbaijan, Heydar Aliev, to ensure that future generations enjoy a high standard of living, currently totals more than $1.2 billion. When one adds to this mix an astonishing 30 percent annual growth in GDP for the past three years, it is clear that American companies can benefit from this boom.

The transformation of Azerbaijan into the main transport corridor of the region has elevated the strategic significance of this country. Last year, Mr. Aliev presided over the opening of the 1,087-mile Baku-Tbilisi-Ceyhan (BTC) crude oil pipeline. The BTC pipeline connects the Mediterranean with the heretofore landlocked but energy-rich Caspian Sea. And just last month, Turkey, Greece and Italy signed an agreement to import natural gas from Azerbaijan. Secure transport to the high seas enables the world to tap into the reserves of the region, estimated to be as much as 80 billion barrels of oil and large volumes of natural gas. And Azerbaijan is in the beneficial position of serving as the hub for the collection of the oil and natural gas moving out of Caspian region. Last year, President Bush met with Mr. Aliev at the White House to discuss Western energy security among other topics. Finally, the building of the Azerbaijan-Turkey railroad will allow for the expansion of economic ties between Europe and Azerbaijan.

Mr. Aliev explains that, “By having established Azerbaijan as a major energy player my goal now is to boost the non-oil sector.” Each month, this energetic leader visits a different region of Azerbaijan to ensure that economic prosperity is reaching throughout the country. Mr. Aliev’s plan emphasizes the petrochemical, light industry, machine building, electronics, power generation, ship building, construction and telecommunications sectors. He understands that American companies have unique technologies and know-how that can be of advantage to Azerbaijan. “I would like American companies to become long-term partners in the development and prosperity of Azerbaijan,” He says.

Our conversation came to a close with the president pointing out the publicity Azerbaijan recently received by the international media when Russian President Vladimir Putin offered to lease the Russian-controlled Gabala radar station within Azerbaijan to the United States as part of a worldwide missile defense package. I then asked the president how he would like Americans to think of his country and, without missing a beat, he said: “I would prefer Azerbaijan to be home to GE and Microsoft than to radar stations.” It is time for the United States to take Ilham Aliev up on his offer.

S. Rob Sobhani is president of Caspian Energy Consulting.

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