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Azerbaijan: U.S. Lifts Restrictions On Aid

U.S. President George W. Bush on 28 January lifted restrictions on U.S. aid to Azerbaijan. Washington said the move will deepen its counter-terrorism cooperation with Azerbaijan and boost efforts to negotiate a peaceful settlement to its dispute with neighboring Armenia over the Nagorno-Karabakh enclave. In December, the U.S. Congress agreed to suspend a nine-year ban on military assistance to Azerbaijan, clearing the way for Bush to act.

Prague, 29 January 2002 (RFE/RL) -- U.S. President George W. Bush yesterday lifted restrictions on U.S. aid to Azerbaijan, rewarding the government for its cooperation in the fight against terrorism. The White House would not say what type of aid Azerbaijan would receive and when it would begin to flow. A White House statement indicated, however, that the goal is to "support U.S. efforts to counter international terrorism."

At the same time, White House National Security Council spokesman Sean McCormack told reporters it is hoped the move will also boost efforts to negotiate a peaceful settlement to Azerbaijan's disputes with Armenia, particularly over Nagorno-Karabakh. According to U.S. thinking, the elimination of long-standing sources of regional instability, such as the Nagorno-Karabakh question, will only help the antiterrorism campaign.

Novruz Mamedov is director of Azerbaijan's foreign relations department in the office of the president. He says Bush's decision is a historical event that will bolster relations between Washington and Baku.

"In the current stage of our relations, the lifting of the 907 Amendment (Amendment 907 to the U.S. Freedom Support Act) is an historical event for [U.S. and Azerbaijani] relations."

William Taylor is U.S. coordinator for assistance to Europe and Eurasia. On 25 January, Taylor led the American delegation at a session in Baku of a working group on bilateral economic cooperation. He said at a press conference that U.S. assistance to Azerbaijan will total $50 million in 2002, an increase of approximately $10 million over the previous year.

Taylor said the money will be used to reform Azerbaijan's economy, reduce poverty, assist law enforcement in their measures against drug trafficking and other crimes, and to strengthen the border. The assistance program may also apply to military reforms -- in particular, to civilian control over the armed forces.

Leila Butt is an analyst on Caucasus affairs for the London-based Economist Intelligence Unit. She tells RFE/RL, "The preliminary indications are that aid will not exceed 50 million a year [for 2002] in U.S. dollars, and that it's going to be used largely for border security, particularly Azerbaijan's border with Iran."

The lack of a settlement in Nagorno-Karabakh has been a major source of instability in the Caucasus, diverting attention and resources away from economic development issues in both Armenia and Azerbaijan. Rudolf Perina, the U.S. special negotiator for Eurasian conflicts, said earlier this month that a breakthrough must be achieved soon if Armenia and Azerbaijan want the international community to be generous in providing funding and assistance.

The enclave is in Azerbaijan but is populated mainly with ethnic Armenians. The enclave has been under the control of ethnic Armenian forces since the end of war in 1994.

Last month, the U.S. Congress agreed to suspend a nine-year-old ban on military assistance to Baku. Azerbaijan's government welcomes the U.S. aid. The country has failed to translate its oil riches into prosperity for the bulk of its population since winning independence in 1991, while corruption and President Heidar Aliev's control over the economy have scared away many investors.

American companies are interested in investments in Azerbaijan, especially the oil and gas industries. Therefore, they will take an active part in the financing of the Baku-Tbilisi-Ceyhan oil pipeline. The United States has championed this route because Caspian oil would bypass Russia and Iran on its way to the Turkish Mediterranean port of Ceyhan.

According to Butt, many factors point to the fact that negotiations over Nagorno-Karabakh probably will not lead to any deal in the near future. She stresses that the U.S. decision will neither impede nor facilitate negotiations between the two countries. She says such talks have stopped due to domestic opposition in both countries to a compromise deal.

"Both the Armenia and [Azerbaijani] governments have to appease their domestic populations. The domestic populations are both very hostile to what is perceived to be a compromise deal. Also what's stalling the negotiations is that Nagorno-Karabakh would like to be independent, while Azerbaijan is only willing to give it limited autonomy. In addition, the Azerbaijani government doesn't want to negotiate directly with Nagorno-Karabakh because it would be perceived that Azerbaijan was actually acknowledging that Nagorno-Karabakh was a legitimate state or republic."

While some pro-Armenian lawmakers voice concern that lifting the ban on military aid to Azerbaijan could lead to renewed aggression, Butt believes Azerbaijan -- whose army, she says, is "extremely poorly equipped and not very well trained" -- would have no interest in doing so.

"I doubt they would risk pitting their army against Armenia's, which has had some funding from Russia and which is better-equipped than Azerbaijan's. In addition to that, Azerbaijan receive lots of foreign investments from oil companies, and any escalation in the conflict would probably lead to oil companies withdrawing their funding."

Armenia effectively took control of the Nagorno-Karabakh enclave after a war in the early 1990s, sparked when the enclave's mainly ethnic Armenian population tried to break from Azerbaijani rule. A cease-fire ended the conflict, but the dispute is unresolved, despite international bids to broker a peace deal. Armenia refuses to accept any arrangement that leaves Nagorno-Karabakh under Azerbaijani jurisdiction.

Baku, meanwhile, has offered the enclave broad autonomy but insists it remain a constituent part of Azerbaijan. The states involved in the Minsk Group peace process -- including the United States -- consider Nagorno-Karabakh an integral part of Azerbaijan.