Azerbaijan International

Winter 2002 (10.4)
Pages 14-18

Current State of Affairs
Questions and Answers - Ilham Aliyev In Washington, D.C.

Left: Ilham Aliyev, Member of Azerbaijan's Parliament, Head of Parliamentary Delegation to Council of Europe, and First Vice President of
SOCAR (Photo: Farid Khayrulin).

This is an edited version of the Question & Answer Session that followed a presentation entitled "South Caucasus and the Caspian: A View from Baku" by Ilham Aliyev at the School for Advanced International Studies (SAIS), Johns Hopkins University, Central Asia-Caucasus Institute in Washington, D.C. on October 22, 2002.

Azerbaijani student at Georgetown University: What percentage of Azerbaijan's GDP [Gross Domestic Product] comes from oil? Is there any reason to believe that Azerbaijan has an oil-dependent economy?

Our economy is based on oil, so obviously, it is oil that will dominate the economic development of Azerbaijan for quite some time - not because other sectors of the economy are not developing, but simply because their rate of growth does not equal that of oil. During the next three to four years, we expect revenues from oil to increase five to ten times. To expect other sectors to increase at this same rate would not be realistic. At the same time, it is significant to note that more than 70 percent of Azerbaijan's GDP has been created by the private sector.
We should look at this situation from a realistic point of view: oil development in Azerbaijan is the locomotive force for our economy today and will continue to be so for many, many years to come.

Same Georgetown student: Under what circumstances would war be considered a means for Azerbaijan to liberate its lands [Nagorno-Karabakh and seven adjoining districts]?

Azerbaijan should continue to explore a peaceful resolution to the conflict in Nagorno-Karabakh. We think such possibilities are still available and because of that, we should exhaust every possibility to resolve this conflict peacefully. We don't want war. We've had enough of war. We don't want our people to be killed. But at the same time, we will never agree to the violation of our territorial integrity. Azerbaijan will never accept that. If our country and our government see that all peaceful means have been exhausted, then, of course, we will use other means to free our territory.

Below: October 2002 meeting in Washington, D.C. Sitting on the left side of the table are Ambassador Pashayev and Ilham Aliyev. Vice President Dick Cheney sits opposite, to the right (Photo: Farid Khayrulin).

Law student at Georgetown: Please comment on a rumor that is circulating in the media. Is it true that you will be replacing your father [President Heydar Aliyev] once he wins the next general election?

The next presidential election in Azerbaijan will be held in 2003, and President Heydar Aliyev has already stated that he will run for President for the next five-year term. We are all sure that he will win the majority of votes because he is the most popular politician in Azerbaijan - perhaps, the most popular politician in its entire history. Therefore, to talk about the next Presidency is a bit premature. We should wait until 2008.
I can tell you that in Azerbaijan, especially in our ruling party [Yeni Party], there are many prominent, bright, well-educated people who can undertake these responsibilities, so the focus should not be concentrated only on Ilham Aliyev. He is only one of the members of this team.

Reuters: Regarding the $3 billion pipeline that began construction last month: how much financing has yet to be put in place, and how do SOCAR and its partners intend to fill that gap?

This is an issue that we have discussed a lot with our partners at SOCAR [State Oil Company of Azerbaijan Republic]. It was our desire and also that of our oil company partners that SOCAR would participate and invest in this project.

Our financial capabilities in SOCAR are not sufficient to undertake the full responsibility for the Baku-Tbilisi-Ceyhan Pipeline, so we have a 25 percent share in the pipeline company. SOCAR will finance approximately $750 million; 30 percent of that amount will be in equity shares. We will pay cash for that. The rest will come mainly from loans from international financial institutions. SOCAR is implementing its commitments. Our company has already paid nearly $100 million, and an additional $150 million will be paid within the next two years. There is no problem financing the project from the point of view of SOCAR. We will fulfill our obligations.

Russian Novye Investia: What was the substance of your conversations with Vice President Cheney? [Ilham Aliyev met with U.S. Vice President Dick Cheney in Washington earlier in the week.]

We discussed bilateral relations. Of course, Mr. Cheney is well aware of the situation in the region because he is a very experienced politician and he knows what kinds of processes are taking place in the region. Mostly, we spoke about continuing our bilateral relations and about future cooperation between Azerbaijan and the United States in various spheres. Of course, we also discussed our future energy development.

An Armenian claiming to represent "Nagorno-Karabakh Republic" in the United States: How do you evaluate the current status of peace negotiations on Karabakh?

[The individual posing this question had to be interrupted four times by the moderator because he insisted on making a long statement, rather than simply asking a question as had been established in the rules for this Question-Answer Session. In the end, his question seemed tangential to what motivated him to ask for the floor in the first place.]

I think you live here [in the United States], so you have a lot of chances to make your statements in other places. I don't want even to comment on what you have said because you represent an entity that does not even exist. There is no "Nagorno-Karabakh Republic". There is a gang of people who have occupied this territory - who created a military regime - who commit crimes - who commit terrorist acts - this is all true - who occupied, together with Armenia, a part of Azerbaijan.

Therefore, I should mention again that perhaps you represent yourself, or maybe the Armenian lobby or community, but not Nagorno-Karabakh. You cannot represent something that does not exist.

As far as a peaceful resolution of the conflict is concerned, I told you already. We are in favor of a peaceful resolution. We are doing our best to achieve a peace settlement. But a peace settlement must be based on realistic grounds. The principles upon which the settlement must be achieved are very simple: the territorial integrity of Azerbaijan and the withdrawal of Armenian military forces from Nagorno-Karabakh.

Center for Caspian Studies, Harvard: What can the Azerbaijan government do to call attention to the plight of refugees without inciting refugees to violence?

You have pointed out a very important issue. It is true, despite the fact that a great number of refugees live in appalling conditions and their lands are occupied. I can tell you more: the Armenian army has destroyed 9,000 villages and towns. Everything is destroyed. So it's not only war. It's not only occupation. It's acts of vandalism. Those observers who visit the occupied territories of Azerbaijan from time to time are shocked because there is nothing left. Everything has been destroyed or taken away.

Our refugees have shown amazing tolerance for the situation. We should be grateful that, despite the terrible aggression committed against them, they have not committed any violent acts themselves. We are trying very hard to attract attention to this issue. We have invited visitors from the United Nations and humanitarian refugee organizations, but they tell us that we must find a peaceful resolution to the conflict.

Our problem is that, due to the activity of the Armenian lobby in the United States, France, Russia and other countries, the truth about the Azerbaijani-Armenian conflict is not known by the general public. So often we have to deal with a policy of double standards. We face that many times. But we must clearly distinguish the aggressor from the victim. Therefore, Azerbaijan should use and actively does use international organizations in order to bring this truth to the attention of international organizations, asking for their assistance in forcing Armenian aggressors to withdraw. If that does not happen, sooner or later, hostilities will break out again. We do not want hostility, but we will not allow our territory to remain occupied.

Yale's Center for the Study of Globalization: What is your strategy for the use of the State Oil Fund? And what will be the process by which decisions are made in terms of how the funds are used for investment purposes?

We are working together with the IMF [International Monetary Fund] and the World Bank to set up rules for how the State Oil Fund should be used. So far, $650 million has accumulated since its inception. For the past two years, these assets have been untouchable. This year, $72 million was allocated for the needs of refugees, in order to improve their living conditions. With this money, new villages and towns are being built. When I say refugees, I mean the 200,000 refugees who were forced to leave Armenia and flee to Azerbaijan.

Apart from that, there has not been any other expenditure. The main idea of the government is to accumulate assets to create strong potential and then follow the advice of international financial organizations, drawing upon the experience of other countries. There are similar funds existing in Norway, Canada, Alaska and other places. We are evaluating all of these experiences in order to properly manage the Fund.

We have already created transparency in the Fund. Information about the assets is published in newspapers on a regular basis. The Fund is audited; the last audit was carried out by the reputable firm Ernst and Young. From this point of view, we don't have any difficulties. The only thing, of course, is that we need to build up assets, to create a strong financial resource in order to develop other sectors of our economy.

Assembly of Turkish American Associations: In regard to the peace process and Nagorno-Karabakh (and given the situation of Turkish Cyprus, which was recently invited to join the European Union, a move that will inevitably lead to war), do you believe that the mechanisms you are employing to solve this conflict are actually reliable and will bring you the results you are looking for?

We hope that the results will be achieved. I mentioned that we should use every possible chance, if it exists, to avoid war - in order to resolve this conflict peacefully.

What you mention is another example of double standards. Those members of the U.S. Congress who visit Nagorno-Karabakh and congratulate its illegal rulers, of course, are influenced by the Armenian lobby. If not, why would they do that? Why would they close their eyes to the reality of truth? And why would they try to promote Armenian causes in Congress?

For many years, Azerbaijan has suffered from the unjust, unfair policy of Section 907 to the Freedom Support Act passed by Congress. We were the only country of the former Soviet Union [out of 15 countries] to be deprived of direct economic assistance from the U.S. government. This was done by Congress under the influence of the Armenian lobby.

For many years, we have been trying to get this amendment repealed or waived. Only recently [after 9/11] has the U.S. policy changed towards Azerbaijan so that Section 907 could be waived. This shows that the Armenian lobby is influencing Congress and public opinion. That's the reality. Of course, this policy is unfair, but this is the reality.

We must resist this. We must present our case more convincingly to the world. We must speak about it at every opportunity, at every meeting, at every conference, with every international organization. For instance, before Azerbaijan became a member of the Council of Europe, the issue of Karabakh had never been discussed. As soon as we became a member, we started to work very hard. During this past year-and-a-half, the Council of Europe has adopted more than 10 documents concerning activities in Nagorno-Karabakh, such as the illegal burying of nuclear waste from the Armenian nuclear power station, such as the destruction of our national monuments in occupied territories, including our cemeteries, and issues related to ethnic cleansing of the native population.

Coming back to the topic of Section 907: Why did the U.S. Congress allegedly adopt this law? They claimed that Azerbaijan was blockading Armenia. But Azerbaijan cannot blockade Armenia. In order to open communications between the two countries, Armenian troops would have to withdraw from the occupied territories belonging to Azerbaijan. This unjust and unfair amendment has been in force for nearly 10 years. Even today, it has not been completely canceled. It was just waived [by President George W. Bush after 9/11] for one year. [Now since Ilham gave this speech, 907 has been waived for the second year]. Therefore, we must be more active in this direction and use every opportunity to speak about this conflict because what we speak is truth and what the Armenians are saying is a lie.

The Caspian countries are moving to create a new legal regime, but the question of the Caspian's status is still under dispute. Under such circumstances, what is the likelihood of a subsea pipeline being constructed from Kazakhstan to Azerbaijan?

The number of parties who are disputing this issue has decreased. Today Russia and Kazakhstan and Azerbaijan are in agreement about the demarcation of the borders of the Caspian Sea. This is a very positive step forward from where we were two or three years ago, when there were no bilateral arrangements. We want to solve this issue on a bilateral basis. Getting an agreement between five countries is much more complex than getting an agreement between two.

The process is moving forward. Today, we don't have any problems with Russia or with Kazakhstan. The possibility of constructing a subsea pipeline is already in place; this would enable enormous amounts of Kazakh oil to flow into the Baku-Ceyhan pipeline, providing alternate access to international markets. We are in favor of such an arrangement. Of course, that decision must be made by Kazakhstan. Should they make such a decision, we will do our best to promote the idea and create the best conditions for their oil to flow in many directions.

We ourselves have greatly benefited by having two pipeline routes for our oil - one through Russia to the port of Novorossiysk, and the other through Georgia to Supsa [both ports are on the Black Sea]. When there are several pipeline alternatives, you can negotiate better tariffs, you have more room for flexibility, and you can be more in control of setting the conditions of engagement. But if you have only one alternative, as Kazakhstan has today, your options are limited. For Kazakhstan to link up with our pipeline would be good for them, good for us, and good for the entire region. From a legal point of view, there are no restrictions to constructing a subsea pipeline that would connect Kazakhstan to Azerbaijan.

Visiting scholar of the Central Asia-Caucasus Institute from Georgia: Not so long ago, there were certain legal constraints [Section 907] that did not allow cooperation between Azerbaijan and the United States in security sector reform. Would you elaborate on the development of the security sector in Azerbaijan?

We are pleased that there are no restrictions today in our cooperation in the sphere of security. Several years ago, Azerbaijan joined NATO's Partnership for Peace program. Within the framework of this program, much work was accomplished in Azerbaijan. It enabled our various military forces to become more integrated and meet the standards of NATO.
Azerbaijan is cooperating closely in regard to NATO's anti-terrorism programs. Just the other day, we had a visit from one of their high-ranking military officials. There is assistance to us in various military spheres, including equipment and training. We are satisfied with this progress, and would like to see even more cooperation in this sphere.

Eurasia Foundation: What kind of assistance do you see as the most appropriate or helpful for NGOs [non-government organizations] to engage in along the new pipeline [the Baku-Tbilisi-Ceyhan pipeline, which will stretch 1,091 miles between Azerbaijan, Georgia and Turkey, from the Caspian Sea to the Mediterranean]?

I hope that NGOs will not try to impede the progress of the pipeline. Unfortunately, a number of NGOs recently have been making statements against the construction of the Baku-Ceyhan pipeline. They sent these statements everywhere - to our company, to our investors, to the IFC [International Finance Corporation], which will be the international institution involved in lending. Curiously, when we look at the list of these NGOs who are opposing the pipeline, we see many Armenian names.

Recently, a letter opposing the Baku-Ceyhan pipeline was sent by about 30 U.S. Congressmen to President Bush. Interestingly, these Congressmen agreed to support the project if the Baku-Ceyhan route passed through Armenia instead. Of course, that would never happen, no matter how much the Armenians protest.

NGOs that are interested in protecting the environment are very welcome to get involved with us. Just today, we discussed this issue with the Executive Director of IFC, and we agreed to have more consultations so that we can understand what is going on in the environment.

From the point of view of environmental protection, some of the topics that the NGOs raise have already been very helpful to us, Georgia and Turkey in the planning stages. So we welcome those NGOs that come in the spirit of good will. But those who would hinder the progress of the pipeline in order to pursue their own agenda, I would like to ask them to stay away.

AzerTAJ: Could you elaborate more on the international report on human rights in regard to the ongoing settlement of Armenians in the occupied territory of Azerbaijan?

Yes, of course, it is a problem. We have information that Armenians are settling in the occupied territories. The main question that comes to mind is, where do they find so many Armenians to settle there? We know that the population of the Armenian Republic is shrinking. Today, according to some estimates, there are not more than 1.8 million people living in Armenia [compared to 3.5 million before the collapse of the Soviet Union]. The population of Nagorno-Karabakh was about 150,000 before the war, 10-15 years ago. Today it is not more than 30,000. So for us, it is a real question. Where do they find these new settlers? Of course, this issue is of great concern to us, and we continue to raise our voice and strongly oppose it.

MBA Student at Harvard: Could you elaborate on the projects that the government is undertaking with IMF (International Monetary Fund)?

With IMF, we do not discuss any specific projects with them because their function is a bit different. We carry out projects with the World Bank, especially in terms of creating new infrastructure such as water supplies, road construction, and assistance in the spheres of education and health care. The IMF's role is limited to consultation. We have a joint program with them and are discussing how to invest our revenues so as to diversify our economy.

Our government is preparing a program, which is almost ready now, for the economic development of Azerbaijan for the next 10 years. All the basic elements are included in that program, including which kind of infrastructure, which kind of factory, which kind of agricultural facility must be built, where are the markets, where are the production. Of course, we will need substantial financial resources to develop these projects, because Azerbaijan will not be able to undertake such a huge financial burden. But we can participate in all of these projects as a shareholder. We can invest in new infrastructure, which will help create confidence for potential investors and promote new development.

There are many possibilities for development in agriculture. We have a beautiful country, a good climate and a wide range of climatic zones, so there is great potential in construction, petrochemicals and other sectors of the economy. All of these projects are under consideration in the general development program of our country. When we have the financial resources, we will implement them.

Russian Service of Radio Free Europe / Radio Liberty: I know that President Aliyev made a statement a few days ago saying that he was not satisfied with the Minsk Group's contribution to the negotiations between Armenia and Azerbaijan. What do you want from the Minsk Group? And what is your position about the Russian role in these negotiations?

The Minsk Group has a mandate from the OSCE [Organization of Security and Cooperation in Europe] and its obligations are clearly set out - to facilitate the process of the two countries to reach an agreement. But we are not satisfied with their work. For so many years [since 1992], there have been no results. Sure, there are proposals, there are consultations, but there are no results. We want the Minsk Group to facilitate the peaceful resolution of the conflict, to facilitate the restoration of the territorial sovereignty of our country. But today, apart from the Minsk Group, we don't have any other mechanism. Despite the fact that we are dissatisfied with their activities, we consider that the Minsk Group is the only structure that can facilitate finding a peaceful solution.

As far as the position of Russia is concerned, we must divide this discussion into two parts: the position under President Yeltsin [1991­late 1999] and the position under President Putin [1999­present]. Their two policies were completely different. Before, there was 100 percent Russian support for Armenia. Before, Russian troops were helping Armenia in their military action against us. Everybody knows that Armenia would not have been able at that time [early 1990s] to occupy our territory. Everybody knows that there was an illegal transfer of arms from Russia to Armenia worth $1 billion. When this issue became public, it resulted in a big scandal in the Russian Duma [Parliament].

But after President Putin came to power, this situation changed. Today Russia has very good relations with Azerbaijan. In a very short period, we have managed to resolve almost all of our differences. Today there is no hostility between our countries. We cooperate together. We have signed a very important agreement in economic development. We have started to buy natural gas from Russia. We now deliver some of our oil via the Baku-Novorossiysk pipeline, which prior to that was not being used. Now 2.5 million tons of oil flow each year.

As I mentioned earlier, we have reached an agreement with Russia on the "Demarcation of the Caspian Sea", which would never have been possible under the former Russian administration. Today, in regard to the Nagorno-Karabakh conflict, we feel that Russia has a balanced policy, and that it really wants to facilitate both sides to find a peaceful resolution.

Student, University of Maryland, College Park: Is your government concerned about the issue of protecting the human rights of ethnic Azerbaijanis living in Iran, and does your government have a policy related to this issue?

In our relations with Iran, we always maintain that we should not interfere in each other's affairs. Iran is a government-a state-with its own way of governing. Azerbaijan is a state with a completely different type of society. We must not interfere in each other's affairs.

But, of course, we cannot ignore the large community of Azerbaijanis who live in Iran. There are more than 30 million Azerbaijanis living there. There is much traveling back and forth between the two countries. They come to visit us; our people visit them. Many people have relatives living on either side of the Araz River. So we have these cultural ties with Azerbaijanis in Iran, especially now that there is free access to each other. However, we don't think that it is the right approach to use this issue of ethnicity for political purposes. Azerbaijan and Iran are separate states. They should not interfere into our affairs; nor should we interfere into theirs.

Azerbaijani, working with a law firm: You mentioned seven regions beyond Nagorno-Karabakh that are currently occupied by Armenia. From what I understand, they are not currently populated by Armenians, but have been turned into virtual "Dead Zones". There were also reports that the natural resources of those regions are being exploited. Does Azerbaijan have any information about how dire the situation is? Are you developing any plans or programs to develop after those lands are liberated? Are you thinking about bringing any international claims against Armenia for illegal use of the natural resources of Azerbaijan?

Yes, we will do that. You are right: Armenians are using the natural resources in that area; in particular, they are producing gold from our territory. Also, as I mentioned before, they are burying nuclear waste in the occupied territories. Maybe afterward, a large-scale ecological program will be required to clean up that territory. When I mentioned that Nagorno-Karabakh is a "lawless zone", I meant that there is no international control. There is no international monitoring going on there. Armenians do whatever they want and, therefore, we are demanding that an end be put to this illegal military regime and that international monitors and observers from various spheres of expertise, including ecological organizations, immediately go there and conduct their monitoring.

IMF: We Azerbaijanis living abroad always dream that Azerbaijan will become a trade and oil hub for the region. What progress is being achieved in that regard, such as the Silk Road Project and bringing oil from Kazakhstan to Azerbaijan?

We are already bringing oil from Kazakhstan and Turkmenistan to Azerbaijan and delivering it via Georgia to international markets. Currently about 6 million tons of oil a year, give or take, is being transported this way. Once the amount of oil from Kazakhstan and Turkmenistan grows substantially, it will be economically feasible to construct the subsea pipeline.

The Silk Road Project is still developing. U.S. Senator Sam Brownback initiated this project and we are working on this. There is regional cooperation within the framework of the Silk Road Project where GUUAM - Georgia, Ukraine, Uzbekistan, Azerbaijan and Moldova - are cooperating. So Azerbaijan has already become a regional center. Without the participation of Azerbaijan, none of these transportation projects would be possible, including the East-West Silk Road and including a new project that perhaps you have heard of called the North-South Project, which will also be very beneficial and economically feasible. This project will also cross our country. It doesn't matter which direction you go - North-South or East-West, you cross Azerbaijan.

Central Asia-Caucasus Institute of Johns Hopkins University: What are your relationships with Uzbekistan and Turkmenistan?

We have good relations with Uzbekistan. We each have our own embassies. From time to time, we have delegations coming and going between the two countries. There really isn't much trade, but Uzbekistan is a friendly country for us.

As far as relations with Turkmenistan are concerned, we are not satisfied with our level of relations because Turkmenistan has made very unjust claims as far as our oil fields are concerned. They claim that the Azeri oil field belongs to them. This is wrong. Not only do we say this is wrong; all the foreign companies that have invested billions of dollars in those fields thoroughly investigated this issue before getting involved in it. Turkmenistan wants us to give part of that oil to them. This is nonsense. How can you give part of your oil away, especially in an oil field that is under operation by international companies [via the Azerbaijan International Operating Company]?

Unfortunately, Turkmenistan recently closed its embassy in Azerbaijan. We regret that. We hope that relations with them will improve. Many times we have offered to jointly develop the oil structures that are located in the Caspian on the border between us. We have suggested that we jointly invite potential foreign investors but, unfortunately, they have not responded.

Open Society Institute: Can you elaborate for us about the recent decree "On State Secrets" which, for those who are not familiar with it, places a lot of restrictions on the topics that journalists can report on, places the burden of responsibility for security clearance on journalists and also may require journalists to reveal their sources?

I can tell you that in Azerbaijan there is complete freedom of press. There is no censorship. The previous government of Azerbaijan in 1992 imposed censorship, but it has now been lifted. Today we have more than 500 newspapers; only three or four of them belong to the government. All of the rest belong to political parties - both opposition and independent groups. They can write whatever they want. They can criticize whomever they want. So there is freedom of expression and freedom of the press in the fullest sense.

There are more than 30 TV and radio stations in the capital and throughout the regions, which are also free to express their views on all aspects of political life.

What you said about the law, there could be some legislative initiative, but this law has not yet been passed. I heard that there are likely to be some modifications to it, but I'm sure that freedom of press will not suffer in Azerbaijan in the future.

Armenian Assembly: Are you ready to follow the example of Saddam Hussein, who said that other authoritarian leaders should free political prisoners, as demanded by the Council of Europe?

First of all, in Azerbaijan there are no political prisoners. Those people who have been convicted committed crimes. Terrorists, plane hijackers and other people like that - those who have committed acts of terrorism - cannot be considered political prisoners.

But unlike us, in Armenia, people who are regarded as political opponents are being killed in the Parliament, in the prisons. We all know how political prisoners are being killed in Armenia. So I advise you not to raise such an issue, because it will not work to your benefit.

U.S. Geological Survey: Can you envision an era of cooperation with Armenia if there is a peaceful resolution to the Nagorno-Karabakh conflict? If so, in what spheres could this cooperation take place?

Thank you for your question. I sense that you understand the issue very well when you preface your remarks by saying, "after the resolution of the conflict with Nagorno-Karabakh." I say this because Armenia is trying to persuade the international community that it does want to have economic cooperation with Azerbaijan, but that Azerbaijan does not want to cooperate. This is true. We cannot have economic cooperation with the aggressor who occupies our territory. Many times our government - our President - has stated that until the aggressor withdraws from our occupied territory, there will be no economic cooperation with Armenia. And this position remains unchanged.

The Armenian society or those who rule the society have to understand that without regional cooperation, the country of Armenia will not be able to exist. How can it, when it remains dependent on aid? After Armenia withdraws from our territories, communications will be opened and there can be various spheres of cooperation. Azerbaijan is not in need of such cooperation - we can do well without it. But if they ask us to cooperate, we will take this into consideration.


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