- - Wednesday, March 20, 2019

ANALYSIS/OPINION:

Upon arrival in Baku, the capital of Azerbaijan, the first thing you notice is the boomtown feel. Construction cranes reach high into the sky. New building is underway as far as the eye can see. The vibe is energetic, youthful, optimistic. It resembles Texas at the turn of the 20th century, albeit with iPhones, Starbucks and Uber. And instead of American wildcatters, international oil executives roam Baku. In this new Gusher Age, they know that Azerbaijan is one of the next big frontiers.

I recently accompanied my radio colleague John Batchelor on a fact-finding mission to this rapidly transitioning country to see firsthand how the energy boom is affecting the region’s geopolitics. What is striking for an American visitor — who at home is used to hearing non-stop humming about the evils of fossil fuels — is the fervent, unapologetic embrace of them.

All of the talk in Azerbaijan is about energy — oil, natural gas, pipelines, international agreements. Oil and gas account for a whopping 41 percent of the Azerbaijani GDP and 90 percent of its exports. There is no discussion of a “green new deal.” There are no Alexandria Ocasio-Cortezes on the scene, issuing alarmist warnings about climate change and demanding an end to cars and airplanes. To the contrary, after decades under the jackboot of Soviet oppression, capitalism has firmly taken root, driven largely by oil and gas and ushering in a transformative economy.

In this ancient land, what’s old is new again. The Silk Road of Marco Polo — the long-ago trade routes from Asia to Persia and Europe — ran through it. Today there’s a new Silk Road coming into view. As assistant to the president for public and political affairs, Ali Hasanov was careful to point out to us, this one is dominated by modern transportation and communication networks that will connect the economic powerhouses of East Asia with the growing and established markets to the west. Now as then, Azerbaijan is the Grand Central Station of trade connectivity.

The home of the world’s first oil well and tanker (built by the Swedish Nobel brothers who, in the late 19th century, had stumbled upon oil in Baku and built what quickly became the world’s largest oil company, second only to the Rockefellers’ Standard Oil. The Nobels also introduced an ahead-of-its-time socially-conscious business model, donating up to 40 percent of all profits to charitable causes.)

Azerbaijan’s economic boom is even more impressive when you consider the rough neighborhood in which it sits: Russia to the north, Iran to the south, the conflict with Armenia within. Unlike some of its neighbors, it is relatively free of Islamic extremism and its destabilizing effects. Its eastern border is the Caspian Sea, which has allowed it to become a critical transit and logistical hub for the global energy flow.

During my visit, I met with Elshad Nassirov, the vice president of Sochar, the state oil company, and visited the massive oil and gas terminal at Sangachal, operated in partnership with British Petroleum and where the Caspian Sea’s vast energy resources begin their journey to the Mediterranean Basin. U.S. companies such as Exxon Mobil and Chevron and international companies such as French Total are also on the ground, all working to get the energy to the ravenous consumer market points west. The new Southern Gas Corridor will originate from Sangachal as well, headed directly to Europe.

As a result, dependence on Russian sources of energy is already being dramatically reduced, setting into motion significant geopolitical realignments. After 70 years under Soviet control, Azerbaijan’s role in slashing its neighbors’ (and Europe’s) reliance on Russian gas is quite a delicious turnabout.

It’s also clear that energy is necessary to the Azerbaijani economy but not sufficient. Diversification is a priority as it strives to develop agribusiness and court foreign investment.

And despite the dominance of oil and gas, the government is branching out to renewables, including wind. Many industry officials spoke of sensitivity to environmental considerations. The modern port of Baku, through which much of the region’s energy passes, was built to be “eco-friendly.”

At the same time, unlike in the United States and West where the left has made fossil fuels a dirty word, in Azerbaijan they are a point of pride because they are helping to lift a nation out of crushing socialist poverty and into economic prosperity.

Like most modernizing economies, Azerbaijan is a study in contrasts. Czarist ruins stand near luxury shops as both old Soviet Ladas and new Mercedes-Benzes cruise by. Its strategic position means that it has a big opportunity to be not just a major economic power player but a geostrategic one as well.

Azerbaijan was the first democratic, secular and parliamentary republic in the Islamic world and the first to give women the vote, traditions that carry into today. Social and political stability in that part of the world is rare. It may be an even more valuable commodity for Azerbaijan than oil and gas.

Given Turkey’s regressive shift to authoritarianism and Islamism, Azerbaijan is well-positioned to supplant it as the leading secular Muslim-majority nation. This locus of the new Silk Road seems tailor-made for that leadership role — and more than ready for it.

• Monica Crowley is a columnist for The Washington Times.

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