Monday, December 14, 2009

With economic recovery in America continuing its sluggish pace and companies struggling to keep their employees, it is good news that one of America’s most trusted, stable and reliable friends has agreed to proceed with $2.6 billion to design and build strategic highways using American companies.

Azerbaijan’s $2.6 billion “stimulus package” for small- to medium-sized American companies could not have come at a better time. The 48-year-old president of Azerbaijan, Ilham Aliyev, decision to invite American companies to construct 21st century highways for his country will help create American jobs and lead to the purchase of U.S.-made goods and services. Mr. Aliyev decided to import American know-how, technology and raw materials to ensure that these highways are world-class.

As infrastructure work becomes exceedingly scarce for American companies, small to medium-sized firms from California, Pennsylvania, Florida, Wisconsin, Indiana, Virginia, Tennessee and Maryland will be taking part in this endeavor.

The signature project is the building of a strategic highway along Azerbaijan’s east-west corridor - the old Silk Road. A Virginia-based company will lead the efforts to build this highway with American know-how, technology and goods that will also be a green road - where for the first time a section will be dedicated to the use of nanotechnology to capture carbon emissions.

It is hard to imagine that a mere 20 years ago Azerbaijan was a Muslim republic within the former Soviet Union. Even more amazing is the journey that this nation of 8 million has endured. Eighteen years ago, Soviet troops entered Baku to put down the nascent movement for freedom and independence under the guise of “combating Islamic fundamentalism.”

On that bloody January afternoon in 1990, all hopes for this nation seemed to die. Today, Azerbaijan is a vibrant, independent state, raising itself from the ashes of the totalitarian Soviet system to make the arduous transition to democracy. It is also an American friend and strong ally in a region of strategic importance to the United States.

This South Carolina-sized secular Muslim country sandwiched between a resurgent Russia and extremist Iran is fast becoming the Kuwait of the Caspian Sea region. Today, Azerbaijan’s oil fund stands at $25 billion and by 2016 it is estimated that its foreign exchange reserves (excluding gas sales to Europe) will be $200 billion. Clearly, Washington should keep its eye on Azerbaijan.

While Mr. Aliyev sees room for large American firms to do business in Azerbaijan (GE turbines generate power for the state utility Azerenerji while Exxon and Chevron are working with the state oil company Socar to develop Azerbaijan’s vast oil and gas resources), his decision to invite small to medium-sized American companies is deliberate.

His intention is, first, to broaden Azerbaijan’s economic ties with as many states in the U.S. as possible; second, to allow local construction companies, like Azerinshaatservice, to benefit from the know-how and technologies of America’s innovative small enterprises.

Azerbaijan’s partnership with America is not limited to building world-class highways. The uninterrupted exploration, development and transportation of Caspian Sea oil and gas reserves to international markets is a goal shared by both Baku and Washington.

For example, Azerbaijan is now the lynchpin of Washington’s efforts to diversify Europe’s gas imports away from Russia. Unlike some of its neighbors, Azerbaijan’s economic and political stability as well as its responsible leadership make it a favorite anchor for the strategic Nabucco pipeline: delivering natural gas to Europe from Azerbaijan’s vast natural gas reserves.

Beyond infrastructure and energy ties, Washington looks to Azerbaijan to support American efforts in Iraq and Afghanistan and Kosovo. The late president of Azerbaijan, Heydar Aliyev, was quick to offer his support to American efforts in fighting the scrooge of global terrorism after the Sept. 11, 2001, attacks on America by volunteering to send Azerbaijan troops to Afghanistan and Iraq.

American consumers worried about stable returns on their investments can also find a reliable partner in Azerbaijan’s banking sector. Two of the leading banks in the country - run by American-educated CEOs - the International Bank of Azerbaijan and Pashabank offer Western standard banking services.

Like the FDIC in the U.S., the government of Azerbaijan also provides deposit insurance. And finally, American professors and graduate students interested in teaching and earning a higher degree can find a partner in the newly established Azerbaijan Diplomatic Academy, headed by Azerbaijan’s respected senior diplomat Hafiz Pashayev.

From the red tape of Soviet communism to the red carpet of capitalism, Azerbaijan has made the transition to becoming a reliable friend of the United States. In recognition of this remarkable transition, President Obama would be well served by inviting the leader of this transition, Ilham Aliyev, to Washington in order to broaden the strategic partnership between Azerbaijan and the United States.

S. Rob Sobhani is president of Caspian Energy Consulting.

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