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Azerbaijan: President Woos U.S. Investors

Washington, 27 April 1999 (RFE/RL) -- Azerbaijan's President Heydar Aliyev used a keynote speech in Washington on Monday to criticize Russian influence in the Caucasus and appeal for more U.S. investment in his country.

Aliyev, speaking at the Center for Strategic and International Studies -- an independent foreign policy think-tank -- said he will sign three new oil deals in the United States on developing the Caspian Sea's oil resources. Aliyev said that over the past three years, foreign companies have invested $2.2 billion in Azerbaijan's oil and gas sector -- with $1 billion of that coming from U.S. firms. But he noted that Baku's burgeoning commercial ties with the West are not to everyone's liking:

"The essence of Azerbaijan's oil strategy is that we are opening Azerbaijan's rich energy resources to the whole world and we are offering the development of our vast natural resources with all countries of the world, but particularly with the Western countries...But some countries and some circles are against Azerbaijan's joint development of its resources with Western countries. They believe that Azerbaijan's rich energy resources and the whole Caspian Sea have to remain in their area of influence and that Azerbaijan shouldn't get Western and particularly American businesses involved in the Caspian Sea."

In a clear reference to Russia, Azerbaijan's president accused certain governments of attempting to thwart Baku's opening to the West, using a combination of force and diplomatic manipulation. Aliyev alleged that a string of attempted coups against him and terrorist attacks in Baku, starting in 1994, were attempts at preventing Azerbaijan from signing oil deals with the West:

"I can say with full grounds today that military attempts and coup d'etat attempts and later on terror attempts in Azerbaijan in 1994 and 1995 were also made in order to prevent the implementation of Azerbaijan's oil strategy."

Aliyev went on to allege that when that strategy failed to work, governments working against Baku's interests began planting false information in the Western media, playing down the Caspian's estimated oil reserves. Some Western oil companies have pulled out of joint oil projects with Azerbaijan in recent weeks, citing lower than expected oil resources and falling world prices. But Aliyev said the reports were false and he countered that the Caspian's oil reserves remain huge and untapped.

Turning to another matter, Aliyev accused Moscow of providing neighboring Armenia with $1 billion worth of sophisticated armaments over the past three years. He said this was destabilizing the Caucasus region:

"Russia keeps its military bases in Armenia, Russia has military forces in Armenia and Russia has signed a military alliance treaty with Armenia...In recent months, Russia has been supplying new weapons to Armenia, namely S-300 missiles and modern Mig-29 fighters. All this supply of arms to Armenia is a threat to the security and stability in the Caucasus....We are concerned by this and we have been protesting very strongly against Russia's activities...We have expressed our dissatisfaction in the form of an official statement and I have also sent an official letter to President Yeltsin of Russia on this issue."

Russia says any military supplies it is bringing into Armenia are solely for use by its own forces on its own base and it has repeatedly rejected Baku's accusations.

Aliyev used the first third of his hour-and-a-half speech to attack Armenia for occupying Azerbaijan's ethnic Armenian enclave of Nagorno-Karabakh and surrounding provinces. The two countries signed a cease-fire brokered by the Organization for Security and Cooperation in Europe (OSCE) in 1994, within the framework of the so-called Minsk Group, co-chaired by Russia, France and the United States. But no final peace deal has yet been reached.

Aliyev said that Russia, instead of acting as an honest broker in negotiations between the two sides, was instead tied to Yerevan by a military alliance and he said this only harmed Russia's reputation and states attempts to bring peace to the Caucasus:

"There is no need to prove that these kinds of activities on the part of Russia harm Russia's attempt in the OSCE Minsk group to bring a peaceful solution to the (Nagorno-Karabakh) conflict."

Aliyev appealed to the United States to broaden its involvement in the Caucasus and its investments in Azerbaijan, saying he considers Baku's relations with Washington to be a "strategic partnership."

"We want the United States of America to extend more support to Azerbaijan for the sake of the accomplishments we have made and for the sake of preserving the independence of Azerbaijan."

In an RFE/RL interview Sunday, Armenia's Foreign Minister Vartan Oskanian said his country had accepted the latest OSCE proposal for resolving the Nagorno-Karabakh issue and said the onus was now on Baku to accept the deal. He also called on the United States to stay actively involved in the region. And he noted that oil should not be America's only strategic interest in the Caucasus.

The United States has traditionally warm ties with Armenia, which is benefiting from a certain degree of Russian military protection - something Yerevan does not deny. At the same time, Washington finds itself being wooed by Azerbaijan, with its oil reserves and anti-Moscow stance. Remaining friends and strong partners with both sides is certain to be one of America's more delicate foreign policy challenges in the years to come.