Azerbaijan Opens its Doors

A decade after claiming independence, this key East-West crossroads on the Great Silk Road is again boosting its geostrategic profile by launching oil and gas operations in the Caspian Sea. Just months after stepping into the shoes of modern Azerbaijan’s founding father Heydar Aliyev, the new president of the Republic of Azerbaijan, H.E. Ilham Aliyev, outlines his agenda for spurring the all-round development of his country.

The Diplomatic Letter: Mr. President: In October 2003, you were elected to succeed your late father Heydar Aliyev as the President of Azerbaijan. Could you describe the legacy of the man who led your country to independence for our readers? As you strive to carry forward his work, what are the top priorities on your own agenda?

H.E. Ilham Aliyev: It would be extremely hard to recount everything Heydar Aliyev did for the Azeri people in this short interview. To give you a better understanding of the breadth of his accomplishments, we need to recall the situation in Azerbaijan in 1993, when Heydar Aliyev was returned to power. History had left the Azeri people a grim inheritance, which came raining down upon them in the very first days of independence in 1991. Azerbaijan was faced with the problem of Azeri refugees run off their homelands by Armenia, which had destroyed their cities and villages. Armenian forces had occupied other territories where terrible tragedies unfolded. Our young state was also under pressure from abroad, with many foreign countries refusing to recognize Azerbaijan’s independence. Certain groups even temporarily seized power inside the country, with the aim of turning over control of Azerbaijan to outside forces. Finally, various persons and military groups repeatedly attempted to seize power, at any cost.
The Azeri economy was paralyzed throughout this entire period. The negative propaganda disseminated by the powerful Armenian diaspora, along with the unreasonable policies of those temporarily in power in Baku, cut Azerbaijan off from the rest of the world. It was a time of great chaos, when our country was on the brink of civil war. Such was the state of affairs in 1993, when Heydar Aliyev was brought back to power at the insistence of the Azeri people. He accepted the difficult and historic mission entrusted to him, doing his utmost to prevent his people from falling victim to a terrible tragedy. The climate of anarchy was dispelled in short order. Illegal armed groups were disbanded. Executive power and political stability were reestablished. A ceasefire was declared in the war sparked by the Armenian occupation of our lands, preventing the deaths of many more young Azeris and giving us time to build an army that meets the needs of a modern Azerbaijan and can guarantee the integrity of its borders.
An action plan was also laid out for rebuilding and expanding our economy by developing new technologies and attracting greater foreign investments. This process received a fresh boost in 1994, with the signing of the “Contract of the Century” between the State Oil Company of the Azerbaijan Republic (SOCAR) and a consortium of foreign oil companies. This contract was extremely important for our country, at both the economic and political levels. It showed that the international community and the world’s most powerful countries have confidence in Azerbaijan’s social and political stability as well as its promise for the future. It also laid the foundations for the country's economic development firmly in place. Azerbaijan has been moving steadily forward towards integration within the global economic system ever since, with our country now playing an active role in international economic projects of considerable scope.
Laying out and pursuing Azerbaijan’s foreign policy priorities proved to be a highly complex task. In contrast with other newly independent former Soviet block countries, Azerbaijan ran up against numerous roadblocks, as I’ve already mentioned. Under those conditions, President Heydar Aliyev worked tirelessly to overhaul the country’s political strategy. He also did his utmost to resolve Azerbaijan’s domestic problems. Meanwhile, he managed to break, in record time, an embargo imposed on the country by Armenian lobby groups. He did this by holding a volley of meetings with foreign heads of state and government and key political figures, speaking before numerous international organizations, and giving interviews in the international media. He thus set Azerbaijan on the path towards gradually joining the OSCE, the Council of Europe, NATO, other major international organizations, and, at a broader level, Euro-Atlantic structures. Azerbaijan has built new partnerships with foreign states, founded on the principles of equality and mutual interest. This has enabled it to carve out its place on the international stage, as a state pursuing its own, independent, foreign policy agenda. Heydar Aliyev’s wide political experience, along with his comprehensive approach to the political processes in the region and around the globe, helped to normalize and strengthen our relations with countries that had taken a distrustful attitude towards Azerbaijan. As it built better balanced ties with foreign countries, Azerbaijan also reinforced its position on the world stage.
Heydar Aliyev is, in every way, the founder of the modern state of Azerbaijan. He deserves full credit for keeping our country independent and spurring its development.
I would like to remind your readers that the aforementioned facts are just part of Heydar Aliyev’s great legacy to Azeris. If they hail Heydar Aliyev as their national leader, it is for very good reason. I am sure he will remain forever etched in the memory of the Azeri people.
I will carry on Heydar Aliyev’s work as the new president of the Republic of Azerbaijan. My top priorities are: strengthening the Azeri state; restoring full territorial integrity; bringing Azeri refugees back home to their lands; spurring economic growth; improving social conditions; diversifying our country’s ties on the world stage; and ensuring that Azerbaijan is closely integrated into the international community, especially into the great European family. Finally, the underlying goal behind all my efforts is ensuring the future prosperity of our people, who have a long history, a rich and varied economy, and tremendous cultural potential. I am fully convinced that, working together, we will achieve this objective.

T.D.L.: Azerbaijan began implementing major structural reforms in 2001, sparking some of the most dynamic economic growth seen in the Community of Independent States (CIS). Can you tell us what must still be done to stabilize and rationalize internal development factors? With the oil industry continuing to serve as the driving force behind the economy, how does Azerbaijan plan to diversify its revenue sources? In light of the wide social inequalities in your country, what the government is doing to fight poverty?

H.E.I.A.: The Azerbaijan Republic has achieved some of the strongest economic growth not only among CIS countries, but among Eastern European countries as a whole. It began implementing major economic reforms as early as 1996, which produced concrete results in short order. Over the past seven years, Azeri GDP has risen an average of 10% annually. In 2003, it rose 11%. Inflation has been held to between 2% and 3% for several years now. Azeris’ standard of living is improving by the day.
Large-scale investments have been made in Azerbaijan, confirming that our country has created investment-friendly conditions and now inspires true confidence. This economic success is best reflected by the growth of the petroleum and gas industries. The billions of dollars that have poured into the Azeri section of the Caspian Sea are already beginning to bear fruit, and will help spur further economic growth.
Our reforms in the agricultural sector are now complete, enabling several hundred thousand smalltime farmers to become landowners.
The privatization of state-owned assets continues to be the primary objective behind Azeri structural reforms. The first step has been the expansion of private property ownership across the country, which increased the private sector’s share of GDP in 2003 to 73,4%. Recent measures are aimed at strengthening the role of internal factors in the drive to achieve sustainable development, and thus reduce the economy’s dependence on external forces. Problem areas are being addressed through state programs that focus on several key areas, including “Poverty reduction and economic development,” and “Socioeconomic development of regions.” Our primary goals are to ensure balanced economic growth at the sectorial and regional level, widen the structural reform process, spur more dynamic growth in non-oil industries, and increase state support for the creation of new businesses.
A State Oil Fund was established in 1999 to ensure that oil revenues were managed in a sound and transparent manner. It operates in accordance with approved legal standards that comply with international norms.
We have also worked very hard to broaden Azerbaijan’s revenue sources. This has led to improvements in the regulatory and legal framework governing investments, easier access to land ownership, the privatization of state-owned assets, and the stimulation of new investments in non-oil sectors.
As for the social inequalities in Azerbaijan, they can be found in every country undergoing major transitions. In our own country, the process has been hindered by Armenia’s occupation of 20% of our lands, which has created nearly one million refugees and displaced persons. As I said earlier, our economic policy choices combined with the stabilization of Azerbaijan’s sociopolitical situation have enabled us to improve the people’s standard of living year after year, and to take strong steps to fight poverty. We began implementing the measures outlined in the State Program for Poverty Reduction and Economic Development with the issuing of a 2003 presidential decree. The program analyzed the level and nature of poverty in Azerbaijan, then outlined measures to alleviate the problem within the broader framework of the plan for reforms and institutional transformations we are implementing in the economic and social arenas. I am convinced we will be able to adequately reduce the level of poverty in Azerbaijan in short order.

T.D.L.: What role do you see Azerbaijan playing in the Caucasus region, where it is fast becoming a key economic pole? Has your country taken steps to improve the regulatory framework for foreign investments? International financial institutions are showing renewed confidence in your country. What is it doing to ensure even greater economic transparency? As a candidate for membership in the World Trade Organization, has Azerbaijan set a timetable for gradually integrating the global economic system?

H.E.I.A.: As I mentioned earlier, Azerbaijan ranks among the top CIS countries in terms of economic development. It has become the leader in the South Caucasus in other areas as well. Our country is actively involved in several regional economic projects of international scope. Azerbaijan is also one of the leading CIS and Eastern European countries when it comes to foreign investment per capita. $16.9 billion have been invested in Azerbaijan over the past ten years. Figures for 2003 show that total investments were 1.8 times higher than in 2002, climbing to $3.3 billion. We have taken steps to improve the investment climate, such as strengthening our legislative framework and supplying development aid to non-oil sectors and regional programs. Forecasts project that Azerbaijan will attract $16.9 billion in investments, as much as during the last period (including $5.7 billion from domestic sources, and $11.2 billion from abroad) for 2004-2008.
Over the past ten years, Azerbaijan has cooperated very successfully with key international financial institutions. We consulted with them before launching our economic reforms, which have benefited greatly from their technical and financial assistance and received their stamp of approval. Our country has now achieved both macroeconomic stability and sustainable development. We have made good headway towards building a strong banking and financial system. Azerbaijan will obviously continue to work with international financial institutions, taking account of the strong economic advances it has made in recent years as well as its own national interests. A number of measures have already been drawn up to that end. We also plan to attune our financial system with the newly adopted budgetary system. We will improve our treasury system as well as state-supplied facilities and equipment, set down a long-term strategy for how to use our oil revenues, and launch a good many other measures.
The Azeri economy is steadily integrating the global economic system. Our country is also cooperating with the World Trade Organization. It has been moving towards WTO membership since submitting its application in 1997, and being granted observer status. In August 2003, we created a special commission to help prepare Azerbaijan for WTO membership, with the goal of accelerating the accession process and laying out a cohesive economic policy for our negotiations with the WTO. The Azeri Ministry for Economic Development also signed a grant agreement with the United States Trade and Development Agency, which enabled us to launch a technical support project for Azerbaijan’s WTO accession bid in April 2003.

T.D.L.: The Caucasus region have seen great changes in their political and economic systems since the collapse of the USSR. What are your thoughts on the “rose revolution” that sparked a peaceful power handover in Tbilissi? Was it the start of a brand-new chapter in relations between Azerbaijan and Georgia?

H.E.I.A.: The Caucasus region has undergone significant changes since the collapse of the USSR, as it pushes steadily forward with complex political processes that have led to the appearance of conflict zones. Despite it all, our relations with neighboring Georgia have grown stronger by the year, bolstered by the mutual understanding and friendship that bind our two countries. Azerbaijan has watched the political shifts in Georgia with great interest. We followed our neighbor’s recent presidential and legislative elections very closely, fully assured that the new Georgian government had the situation under control and would successfully resolve the grave problems caused by these changes. We are very pleased to see that things have turned out as we had hoped. Georgia’s stability is, indeed, of great importance to Azerbaijan. The measures taken by Georgia’s new president, Mr. Saakashvili, have done a great deal to safeguard that stability. Azerbaijan and Georgia are friends. Our two peoples share long-standing ties, especially at the cultural level. It is remarkable that these feelings of friendship and mutual understanding have been kept alive for so many centuries, and that our ties have grown even stronger since we gained independence. We have maintained very active political relations. We consult one another regularly on both regional and international issues, and have taken the same approach towards every single problem. Our countries are also linked by joint economic projects, such as the Baku-Tbilisi-Ceyhan (BTC) and the Baku-Supsa pipelines, ongoing projects of international scope.
What’s more, we are facing exactly the same problems right now. Both Azerbaijan and Georgia have been waylaid by aggressive separatist movements that have violated their territorial integrity. We are, nevertheless, convinced that the territorial integrity of both countries will eventually be restored, in accordance with international legal standards. Let me end by saying that the promise of a bright shared future continues to guide our relations. This positive dynamic will continue to serve our two people’s best interests, helping to boost peace, stability, and regional cooperation in the South Caucasus and in the region as a whole.

T.D.L.: As you just mentioned, the Nagorno Karabakh conflict has increased instability not only in your country but in the region as a whole, while continuing to taint relations between Azerbaijan and Armenia. What must be done, from Azerbaijan’s perspective, to peacefully resolve this conflict? How do you feel about the mediation efforts of the Minsk Group, and Russia in particular?

H.E.I.A.: The Nagorno Karabakh problem has, indeed, become a destabilizing factor not only for Azerbaijan, but for the entire South Caucasus region. It is a threat to the very security of Europe.
The Armenian-Azeri dispute over Nagorno Karabakh is the root of all the dangers in this region. After Armenia’s invasion of Azerbaijan, the ancient Azeri territory of Nagorno Karabakh and the seven surrounding regions – a full 20% of Azerbaijan’s territory – were occupied by Armenia. Over one million of our fellow citizens were chased from their ancestral homeland, becoming displaced persons within their own country.
No longer under the control of the international community, these territories have become a virtually lawless zone teeming with organized crime. Armenian authorities have taken a very negative stance. They have rejected the four resolutions put forward by the U.N., the principles outlined at the OSCE Lisbon Summit, and the decrees and resolutions by other international organizations calling for the unconditional withdrawal of Armenian forces from the occupied territories and the respect of Azerbaijan’s territorial integrity. Armenia has, instead, continued its aggression towards our country. The OCSE Minsk Group, co-chaired by the United States, France, and Russia, has been trying to resolve this conflict for several years now. Unfortunately, it hasn’t made any positive headway, and so the problem remains unresolved. We have high hopes, nonetheless, that other international organizations will start paying closer attention to this problem. The decrees, resolutions and various official documents issued by the Council of Europe, the European Union, and other international bodies all confirm the fact that Armenia has occupied Azeri territory, and fully support our country’s territorial integrity and sovereignty over these lands. That said, it is extremely important for the international community and other international organizations to step up their efforts to peacefully resolve this dispute without delay. The first step towards achieving that goal is ensuring that the rule of law is enforced, starting with its most basic principle: the integrity of borders and national territory. In other words, our country’s territorial integrity must be restored, Armenian armed forces must pull out of the occupied territories, and the refugees and displaced persons must return to their homes.
Armenia is trying to justify this act of aggression and the occupation of our lands by citing another principle of international law, which asserts that the Armenians in Nagorno Karabakh have the right to self-determination. But let me stress the fact that Armenians have already established self-government, within the confines of the Armenian state. There are Armenians living in many other countries around the globe. Just imagine what would happen if they tried to assert self-determination in all those countries as well. I would like to add that Armenia has repeatedly proposed forging economic ties between our two countries, a truly preposterous idea. No state in the world could establish economic ties with a country that is occupying part of its lands. In fact, Armenia’s aggressive policies have kept it locked out of the major international economic projects currently underway in the region. As for other factors weighing on the resolution of this conflict, let me underscore the fact that there are no foreign military bases on Azeri soil at this time. I am firmly convinced that the region would find renewed peace and security if the other countries of the South Caucasus took the same position. We want to live in peace, as we develop our economy and country. We want the South Caucasus to be a peaceful, stable, and prosperous region. But we will never be able to achieve these objectives unless the Armenian-Azeri conflict over Nagorno Karabakh has first been resolved.
This is why I insist on the fact that the international community must redouble its efforts to put an end to the Armenian aggression against Azerbaijan.
Finally, I would like to point out that the OSCE Minsk Group, which is handling this issue, has made no headway whatsoever. We would consequently like to see the Minsk Group’s co-chairs, Russia included, step up their efforts as well.

T.D.L.: Azerbaijan and Russia signed a series of new cooperation agreements during your state visit to Moscow last February. How would you describe the current state of relations between your countries? What are your thoughts on Russia’s attempts to strengthen ties between the countries of the region, by promoting the Eurasian Common Economic Zone and rekindling the Organization of Collective Security Treaty of the CIS (OCST)?

H.E.I.A.: Azerbaijan and Russia continue to push forward building successful bilateral ties, which are very dynamic across the board. They are founded on earnest political dialogue and mutual understanding at both the regional and international levels. The agreements signed during President Vladimir Putin’s official visit to Azerbaijan, in January 2000, and during my own visit to Russia last February, have been key to widening the legal framework of our bilateral relations and expanding them all the faster.
As one example of successful cooperation between Azerbaijan and Russia, there was the signing of the bilateral agreement on the legal status of the Caspian Sea, which delineated the boundary between the countries’ respective sections.
The dynamic growth seen in both countries’ economies, with a steady rise in GDP, has led to an increase in the volume of bilateral trade.
Russia and Azerbaijan are also expanding their cooperation in the energy sector, based on the principle of mutual and shared interest. Azeri oil makes its way to the port of Novorossisk. Meanwhile, we import Russian-produced gas and power.
As I said earlier, Azerbaijan’s ties with Russia are built upon very close cooperation. This cooperation is conducted at both the bilateral and multilateral levels. We are very pleased that these expanded ties have served the interests of our country and our people, within the Community of Independent States (CIS), at the regional level, and at the international level.
As for the CIS Collective Security Treaty, Azerbaijan is not party to this agreement, owing primarily to the fact that Armenia is.

T.D.L.: The Caspian Sea’s oil reserves have become a hotly disputed battleground since the collapse of the USSR, with the area’s legal status still an open question. Could you outline Azerbaijan’s proposals for resolving this dispute? Is the construction of the Baku-Tbilisi-Ceyhan pipeline (BTC) the first step in your country’s new strategy for freeing up its oil resources?

H.E.I.A.: During the Soviet period, the area’s mineral resources were divided up into sections that were tapped by the ex-Soviet republics surrounding the Caspian Sea. Azerbaijan believes that sovereign rights and jurisdictions over the Caspian Sea should be divided up between the littoral states in relevant sections. Its position on how to divide up the basin takes the dividing lines between littoral states into account, a principle that must be enforced in accordance with standards of international law in order to preserve the sovereign rights of states bordering the Caspian and the past experience.
These principles were reaffirmed in the treaties Azerbaijan signed with Kazakhstan, in November 2001, and with Russia, in September 2002. We hope to sign similar agreements with the other littoral states, and to resolve the problem of the legal status of the Caspian Sea without further delay.
Azerbaijan has been very successfully tapping these oil fields since 1994. We have even accelerated the pace of several projects in the Azeri section of the Caspian. Billions of dollars have been invested in our country. In 1997, crude oil began pouring out of the Chirag field. The opening of the Baku-Novorossisk and Baku-Supsa pipelines enabled Azerbaijan to get its oil to international markets. At the time, our only goal was to build a vast oil pipeline across Azerbaijan that would allow us to export our oil. Now that the construction of the Baku-Tbilissi-Ceyhan pipeline is 50% complete, our vast project is finally falling into place. We have signed financing agreements for the Baku-Tbilissi-Ceyhan pipeline project, putting an end to the problems raised by this issue. The assistance we received from leading international organizations was of cardinal importance in the launching of this project, as it will be for other projects in the future.
We intend to continue tapping into our oil and gas fields, most notably through the Shahdeniz project, which has proved to be one of the biggest and richest fields in the Azeri section of the Caspian. It is being developed by a consortium that brings together the world’s leading oil companies. I am sure it will be a great success, and that all these initiatives will help to bolster the Azeri economy and, on a broader level, to strengthen regional cooperation, safeguard peace and stability, and improve the standard of living of the peoples in the region.

T.D.L.: International terrorism has become an increasing concern as the region pushes forward with projects to transport oil from the Caspian basin to international markets. Would Azerbaijan like to see more concerted regional cooperation to heighten security in the region?

H.E.I.A.: Maintaining regional security is, indeed, a key issue for our region, in view of the increasing exploration and export of the Caspian’s oil resources and the surge in international terrorism. The South Caucasus has been plagued by ongoing conflicts in recent years, making this problem all the more acute. Azerbaijan is carrying on an open dialogue and fruitful talks with the leading states in the region and around the globe. It advocates close cooperation at both the bilateral and multilateral levels, in order to maintain regional security. It is also actively involved in drawing up intergovernmental and multilateral agreements. But let me emphasize, once again, that our failure to resolve the conflicts in the region has prevented us from achieving our goals. In that light, the peaceful resolution of the Armenian-Azeri conflict over Nagorno Karabakh would be a great boost to regional security. The region will not know true peace and stability until this conflict is resolved, which is why we believe that the international community should focus on this problem and take concrete steps to resolve it.

T.D.L.: Azerbaijan is actively involved in the fight against international terrorism. Could you share your thoughts on the problem of Islamic terrorism, in light of the recent attacks in Spain, Turkey and Morocco? After U.S. Secretary of State Donald Rumsfeld’s visit to Baku in December 2003, should we expect to see closer military cooperation between Azerbaijan and the United States?

H.E.I.A.: Azerbaijan is actively involved in the fight against terrorism. Immediately after the tragic events in the United States on Sept. 11th, 2001, Azeri authorities took a real step forward in this battle, declaring that our country would join the international coalition against terrorism. The Azerbaijan Republic condemns terrorism in all its forms, and supports the international community’s efforts in the war on terrorism.
Our country too has been a victim of terrorism. At the start of the Armenian aggression against Azerbaijan, in the late 1980s, Armenians committed numerous acts of terrorism inside Azeri territory, leaving hundreds of people dead or wounded. In that sense, the fight against terrorism is of vital importance to us.
We therefore condemn the acts of terrorism that have been committed in Spain, Turkey, Morocco, and other countries around the world. I would also like to stress that we cannot take an ambiguous stance towards the issue of terrorism. A terrorist has no religion or nationality, which is why terrorism is not limited to any one religion or any one culture. The fight against international terrorism will not be effective unless we analyze this worldwide problem from this perspective.
With regard to military cooperation between Azerbaijan and the United States, let me just say that our countries are close partners, and that they are expanding their ties in several different arenas. Azeri soldiers are playing an active role in operations in Kosovo, Afghanistan, and Iraq, working alongside U.S. soldiers as part of the international coalition. Our leaders exchange visits at many different levels of government. The December 2003 visit by U.S. Secretary of State, Donald Rumsfeld, was instrumental in strengthening ties between our two countries. I am convinced that continued Azerbaijan-U.S. cooperation will help preserve international security and further the battle against international terrorism.

T.D.L.: Azerbaijan became a member of the Council of Europe on 25 January 2001. Does this augur well for even closer ties between your country and the EU? Could the recent enlargement of the Union to the East help move things in this direction? Have European assistance programs, such as TACIS and TRACECA, produced concrete results in your country? To what other areas would you like to see this cooperation expanded?

H.E.I.A.: Our country belongs to the great European family. It cooperates with the European Union within the framework of the Partnership and Cooperation Agreement signed in Luxembourg in April 1996. The PCA serves as the legal base of our ties and covers a large range of areas, including the political and trade arenas. It has been supplemented by a Joint Declaration on relations between the EU and the Caucasus countries, signed at the Luxembourg Summit in June 1999.
I would like to underline that recently, the European Union has been very helpful in the resolution of the Armenian-Azeri conflict over Nagorno Karabakh, which pleases us greatly. We are also very glad to see the European Union taking pains to welcome the countries of the South Caucasus as its new neighbors. It has already taken clear steps in this direction, as witnessed by the appointment of an EU Special Representative for the South Caucasus. Moreover, at its July 2002 meeting, the EU-Azerbaijan Parliamentary Cooperation Committee recognized Azerbaijan’s territorial integrity and supported several of its positions on how to settle this conflict. This support was reconfirmed in the August 2002 European Union declaration, further bolstering our desire to see the European Union redouble its efforts to resolve the Nagorno Karabakh conflict, in accordance with standards of international law. I believe that our ties with the European Union will continue to steadily grow, and that our country will become an active member of the EU in the near future.
From our perspective, the ongoing enlargement of the European Union to the East and the acceleration of the European integration process are helping to improve the situation in countries with economies in transition, as well as helping to bring the peoples of Europe closer. We are convinced that Azerbaijan will play an active role in these different processes.
Azerbaijan’s highly strategic location – on the eastern flank of the Caucasus, bordering the Caspian Sea, straddling Europe and Asia – has guided its economic ties with other countries. Our country has stood at the crossroads of major trading routes throughout history. In this sense, Azerbaijan has an opportunity once again to serve as a bridge linking Europe to the Caucasus and Central Europe. It could play this role, for instance, in exporting the Caspian’s oil and gas resources to the West. The European Union has pledged to assist Azerbaijan in developing its full potential through the TACIS program. Working through TACIS, the EU is financing projects that bring new technologies to Azerbaijan, helping to strengthen the market economy and enhance democracy in our society. The European Commission is also working with the Azeri government and other organizations within the framework of the TACIS program, in an attempt to identify sectors that need financial support. This program is also helping us implement reforms inside our country. Under the TACIS program, the European Union has given us 30 million euros through a special assistance program designed to bolster the Azeri private sector. This will give our government more room to maneuver as it tackles pressing social problems. This assistance is supplemented by 14 million euros for the 2002-2003 period, and another 92.17 million euros for humanitarian assistance for Azeris and displaced persons. Let me emphasize that overall European Union financial assistance to Azerbaijan totals some 370 million euros.
TRACECA, also known as “The New Silk Road,” is another project being carried out under the umbrella of the TACIS program, with the aim of developing a Europe-Caucasus-Asia transportation passage. Azerbaijan, a strategic point on the Great Silk Road since ancient times, is the EU’s main partner in this project. TRACECA is trying to link Europe and Central Asia by the shortest and least costly route, via the Caspian Sea and the Caucasus. TRACECA is also funding other projects designed to improve roads and railways in the region. Azerbaijan was actively involved in drawing up the Main Multi-party Agreement on the International Transportation directed to the development of Europe-Caucasus-Asia passage. Signed in September 1998 during the Baku Summit, this accord moved the TRACECA program from the design stage into the operational phase. Azerbaijan also successfully lobbied to have the program’s General Secretariat located in Baku. The TRACECA program has helped to build a new bridge between Azerbaijan and Georgia, and to renovate the 12th-century Red Bridge.
There are hence excellent opportunities for further expanding ties between Azerbaijan and the European Union in future. The main areas of focus have already been laid out and approved by the Partnership and Cooperation Agreement and by the Joint Declaration issued at the Luxembourg Summit. They are designed to enhance trade ties and investments, and to find a settlement to the Armenian-Azeri conflict over Nagorno Karabakh. In fact, all European Union assistance to our country is aimed at resolving these problems.
By strengthening Azerbaijan’s position in the region, as well as its role as a leader in the South Caucasus, we will no doubt be able to widen the sphere of cooperation between the European Union and Azerbaijan in the very near future. In that light, the European Union’s decision to lay out long-term partnership strategies with Azerbaijan should further accelerate these processes.

T.D.L.: Your first official bilateral visit as President of the Azerbaijan Republic was a trip to Paris on 22-23 January 2004, bearing witness to the excellent ties between Azerbaijan and France. Could you tell us why you chose Paris, and describe the special relationship shared by our two countries? What do you think should be done to ensure bilateral ties continue to grow and to build even greater mutual understanding between the peoples of France and Azerbaijan?

H.E.I.A.: The Azeri and French peoples have a rich shared history built on cultural and commercial ties along with links in countless other areas. When Azerbaijan regained its independence, at the end of the 19th century, we opened a new chapter in the relations between our two countries. Our ties have grown steadily ever since. It was no coincidence that Azeri President Heydar Aliyev visited France on his first oversees visit, back in 1993. In 2004, I too made my first official oversees visit to France. This choice has become a tradition. I’d particularly like to emphasize that since President Heydar Aliyev’s return to power in 1993, Franco-Azeri relations have held a key spot on the head of state’s agenda, and have been one of Azerbaijan’s top foreign policy priorities. France even awarded President Heydar Aliyev the Great Cross of the Legion of Honor, demonstrating its appreciation for the Azeri leader’s great merits.
There are many other factors that help explain the close ties between our two countries and two peoples. As you know, Azerbaijan’s geostrategic location has made it a permanent bridge between the East and the West. France, for its part, has played a major role in the history of Europe. The Azeri and French peoples have a long shared history, as well as deep cultural ties. The steady expansion of our countries’ ties will be conditioned by the long-standing and moral values I’ve already outlined, as well as shared economic interests.
The fruitful cooperation being built between France and Azerbaijan has produced positive results in a wide variety of areas. Our political relations are founded on mutual understanding. Azerbaijan has every intention of joining European structures in future, with France playing a key role, which is why bilateral ties are of such great importance to us.
We are also working to steadily expand our economic ties. French companies are investing actively in the Azeri oil and gas sectors. I would like to highlight the work being done by TOTAL, which helped build the Baku-Tbilissi-Ceyhan (BTC) oil pipeline. Bilateral trade between our two countries has reached relatively high levels. Our cultural ties are also growing steadily. In short, we have very friendly ties with France and have every reason to believe they will be strengthened even further in future. These ties hold great potential as a base for stepping up our political dialogue, expanding our economic ties, increasing trade, and enhancing people-to-people relations between our two countries. I am convinced that by building upon this potential we will be able to achieve our shared goals, and that these processes will help bring our two peoples and our two countries closer on every level.