Magazine article Washington Report on Middle East Affairs

Azerbaijan Ambassador Hafiz Pashayev Discusses Oil, Diplomacy and Regional Conflicts

Magazine article Washington Report on Middle East Affairs

Azerbaijan Ambassador Hafiz Pashayev Discusses Oil, Diplomacy and Regional Conflicts

Article excerpt

Azerbaijan Ambassador Hafiz Pashayev Discusses Oil, Diplomacy and Regional Conflicts

Alima Bisenova, a journalist from Kazakhstan, recently graduated from the University of Missouri-Columbia Journalism School.

According to Hafiz Mir Jalal Pashayev, U.S.-Azerbaijan relations were nonexistent when he arrived in America in 1993 as his country's first ambassador to the U.S. "Few American policymakers and even fewer American lawmakers had even heard of Azerbaijan," Ambassador Pashayev told the Washington Report. "Little was known about Azerbaijan other than that it was a former Soviet Republic."

In 1992, just a year before Azerbaijan's diplomatic mission was established in Washington, the U.S. Congress passed section 907 of the Freedom Support Act. That clause restricted U.S. government assistance to Azerbaijan until it "takes demonstrable steps to cease all blockades and other offensive uses of force against Armenia and Nagorno-Karabakh."

This legislation, Azerbaijan's ambassador said, resulted from the lack of objective information on the regional situation at the time and from vocal Armenian lobbying of Congress. "Section 907 is misguided and runs counter to U.S. national interests," he said.

Despite this major unresolved obstacle, Ambassador Pashayev said relations between the two countries have progressed tremendously. American business has moved to Azerbaijan and now plays a dominant role in the country's oil sector. Together American oil companies constitute some 45 percent of the Azerbaijani International Operating Company (AIOC), an international consortium that has been described as "the deal of the century."

The Clinton administration, which strongly backed the construction of a pipeline carrying Caspian Sea oil from the Azerbaijan capital of Baku to the Turkish port of Ceyhan, crafted exemptions to section 907 to permit humanitarian assistance to Azerbaijan, as well as training and support for the development of democracy. Additional exceptions were made for economic assistance programs by the U.S. Export-Import Bank, the Overseas Private Investment Corporation, and the Trade and Development Agency.

It took years of negotiations and feasibility studies, the ambassador emphasized, before the trilateral agreement to construct the Baku-Ceyhan pipeline was signed in Istanbul in November of 1999 in the presence of former President Bill Clinton and ratified by the parliaments of Turkey, Georgia and Azerbaijan. The ambassador claimed that the $2.4 billion project became commercially viable in part because the governments involved offered more beneficial concessions and lower transit fees. Moreover, the Turkish government guaranteed that, should the project cost exceed $2.4 billion, Ankara will cover the overrun.

Ambassador Pashayev looks forward to working with the new American administration. Noting that President George W. Bush and his foreign policy team bring a "high degree of awareness" to regional issues, he expects "Azerbaijan and the Caspian region as a whole to remain a priority. This reflects the strategic importance of the region for the U.S. national interest," he said. "We also see the continuation of U.S. policy supporting the Baku-Tbilisi-Ceyhan route as a key element of the East-West transportation corridor."

Asked about the reluctance of private companies to contribute to the pipeline costs, Ambassador Pashayev denied that finding companies and financial institutions willing to invest in Baku-Ceyhan was a problem. "All the companies working in the Caspian understand the importance of having a main export pipeline for the region," he said. "The most likely among the major players involved in investment and construction of the project would be BP Amoco, the leading shareholder in Azerbaijani International Operating Company. Understandably, they would like to play a major role in operating the pipeline when the construction is completed. On the Turkish side," he continued, "the major contractor would be Botash. …

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