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PP RUEHAG RUEHDBU RUEHDF RUEHIK RUEHLN RUEHLZ RUEHROV RUEHSK RUEHSR
RUEHVK RUEHYG
DE RUEHKB #0359/01 1210950
ZNR UUUUU ZZH
P 010950Z MAY 09
FM AMEMBASSY BAKU
TO RUEHC/SECSTATE WASHDC PRIORITY 1133
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUCNMEM/EU MEMBER STATES  PRIORITY
RUEHAK/AMEMBASSY ANKARA PRIORITY 3359
RHMFISS/CDR USEUCOM VAIHINGEN GE PRIORITY
RUEAIIA/CIA WASHINGTON DC PRIORITY
RUEKDIA/DIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY
RUEHNO/USMISSION USNATO PRIORITY 0895
RUEHVEN/USMISSION USOSCE PRIORITY 1316
RHEHAAA/WHITE HOUSE WASHDC PRIORITY
RHMFIUU/CDR USCENTCOM MACDILL AFB FL PRIORITY

UNCLAS SECTION 01 OF 04 BAKU 000359 
 
SENSITIVE 
SIPDIS 
 
FOR DEPARTMENT OF DEFENSE DAS/RUE MARY WARLICK 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON ENGR AJ
SUBJECT: SCENESETTER FOR DEPUTY ASSISTANCE SECRETARY OF 
DEFENSE MARY WARLICK,S VISIT TO BAKU, MAY 4-6 
 
Summary 
------- 
 
¶1.  (SBU) Your visit comes as Baku is abuzz with analysis, 
sometimes speculative and alarming, of Turkey and Armenia,s 
recent announcement of a "roadmap" to reconcile differences 
over interpretation of events of 1915 and the eventual 
reopening of borders, and implications of the deal on 
Nagorno-Karabakh negotiations.  The news of Turkey-Armenia 
"rapprochement" forced Baku into a diplomatic scramble to 
ensure the protection of its equities, including on the 
future of westward transit of Caspian hydrocarbons. 
President Aliyev and other high-level officials, to 
counter-balance Ankara's moves, have traveled repeatedly to 
Moscow for energy and security discussions.  Some officials, 
at times, have been critical of U.S. actions.  Through all of 
this, though, the GOAJ's determination to contribute to the 
international effort in Afghanistan remains unchanged, and 
leaders want to engage with the United States in other 
military/security spheres.  Regional Response ,09, which 
involved over 200 troops from the Utah National Guard, was a 
resounding success.  President Aliyev meanwhile has 
consolidated his domestic political position through a 
national referendum eliminating the two-term limit that would 
have forced him to leave office in 2013.  The country is 
maintaining macroeconomic and social stability in the face of 
the global financial crisis, but has taken insufficient steps 
to reform its economy and root out corruption to ensure 
longer term sustainability.  End Summary. 
 
Security Cooperation 
-------------------- 
 
¶2. (SBU) Azerbaijan's strategic direction is deeply affected 
by its physical security environment.  Sandwiched between 
Russia and Iran, and with the unresolved Nagorno-Karabakh 
conflict tying down 70 percent of its ground forces along the 
Line of Contact, Azerbaijan recognizes the need for strong 
allies.  The country has also increased its defense spending 
tenfold in five years and now spends nearly 2 billion dollars 
annually on defense.  While this rate of growth may sound 
alarming, it is tempered by the fact that it represents an 
approximate 3 percent of GDP, the Azerbaijani Army is in need 
of replacing or repairing many items and infrastructure, and 
the sum of money is spread across multiple ministries, not 
just the MoD. Your GOAJ interlocutors will be unequivocal 
about Azerbaijan's orientation westward for its security 
needs, but they will just as forcefully argue that they need 
- and deserve - American weapons systems to build adequate 
defenses.  Azerbaijanis complain bitterly about the 
restrictions of section 907 of the Freedom Support Act, even 
when the waiver provision is invoked, because of the "parity" 
policy on assistance to Armenia and Azerbaijan observed by 
Congressional appropriators. 
 
¶3. (SBU) Late last year Azerbaijan withdrew its 150-man 
contingent from Iraq, at the request of the Iraqi Government. 
 Azerbaijan,s troops had partnered with U.S. Marines 
guarding the Haditha Dam.  Since then, Azerbaijan has 
followed through on its commitment to double from 45 to 90 
the size of its military contribution to Afghanistan, and is 
awaiting the Afghan Government's response to its proposal of 
increasing investment and civilian contributions such as 
construction of schools and training Afghan diplomats as 
police at its academies.  Your interlocutors here, 
particularly at the MFA, will be keen to discuss developments 
in Afghanistan and Pakistan, and may offer additional areas 
for cooperation. 
 
¶4.  (SBU) Your visit is an opportunity to solidify further 
Azerbaijan's cooperation on regional security issues and 
counter-terrorism, and to build on Commander, USTRANSCOM 
General McNabb,s efforts to develop a surface transport 
corridor linking Europe and the CENTCOM operational theaters. 
 Baku has been a willing military participant in OEF and OIF 
and already allows virtually unlimited transit of its 
 
BAKU 00000359  002 OF 004 
 
 
airspace and flexible refueling arrangements in support of 
operations.  Your visit is also an opportunity to gauge 
Azerbaijan's level of willingness to allow wider access to 
Heydar Aliyev airport as the U.S. interagency continues to 
refine options.  Particularly in light of recent events in 
Turkey and Armenia, Azerbaijan is keen to reassure itself 
that its interests and views are not being ignored, and your 
pursuit of Azerbaijan's cooperation will be taken as a 
reassuring signal that the partnership developed over the 
past several years has real value to the United States and 
will continue. 
 
Regional Response  09 
--------------------- 
 
¶5. (SBU) Military exercise REGIONAL RESPONSE 2009 (RR09) 
occurred from 15-28 April 2009. RR09 was an Afghanistan 
peacekeeping scenario-based company-level field training 
exercise consisting of platoon-level situational training 
lanes. The lanes provided training in cordon and search, 
quick reaction force operations, and patrolling. Overall, all 
reports indicate the exercise itself was a success with both 
sides benefitting from the experience. Over 700 personnel, 
200 US and 500  Azerbaijani soldiers participated in RR09 at 
the Qaraheybat Training Center about 40 minutes outside of 
Baku. Although the negotiation phase for the RR09 Exercise 
Support Agreement (ESA) was difficult and drawn out, for this 
first-of-its-kind exercise, the execution phase went 
extremely well. Not only did Azerbaijan provide two companies 
from some of their best units (NATO OCC Battalion and 
Peacekeeping Battalion) to participate in RR09, they also 
spent tremendous energy in providing support to U.S. 
personnel, i.e., housing, transportation, etc. 
 
¶6. (SBU) During the ESA negotiations, the issues that caused 
the greatest concern were criminal jurisdiction over U.S. 
forces and taxation. Initially, there was very little 
negotiating room with the relevant Azerbaijani Ministries on 
these two crucial issues and the exercise looked to be in 
jeopardy.  Only once President Aliyev and the Foreign 
Minister Mammadyarov both personally intervened to approve 
the diplomatic notes and language required by the U.S. was 
the exercise allowed to proceed. Once the political approval 
was granted, all relevant ministries/agencies fell into line 
and provided the required support, i.e., customs, 
immigration, etc. 
 
Turkey and Nagorno-Karabakh 
--------------------------- 
 
¶7.  (SBU) GOAJ officials from the President down are 
unanimous that Nagorno-Karabakh is "issue number one" for the 
President's second term.  Beyond the obvious territorial and 
security concerns stemming from the conflict, the issue is 
the one question that unites the Azerbaijani public on a 
visceral level.  Azerbaijan is willing to pursue the 
political track to solve the matter; however any solution 
that does not guarantee the territorial integrity of 
Azerbaijan is anathema.  Azerbaijanis' views on this issue 
have intensified in the context of Turkish-Armenian moves 
toward opening the border.  If the issue is raised in your 
meetings, we recommend that you emphasize that the United 
States views the Turkey-Armenia process and Nagorno-Karabakh 
as processes that both need to move forward - a point 
recognized by POTUS during his address to the Turkish 
Parliament - and strongly reiterate the commitment of the 
United States to the Minsk Group peace process.  Presidents 
Aliyev and Sargsian last met in Zurich on the sidelines of 
the World Economic Forum, and are expected to do so next 
during the summit on the EU Eastern Partnership in Prague in 
early May. 
 
Energy 
------ 
 
¶8.  (SBU) Energy is one of the three essential areas of 
 
BAKU 00000359  003 OF 004 
 
 
United States engagement with Azerbaijan, along with security 
and political and economic reform.  Azerbaijan's massive oil 
and gas reserves and strategic location place the country at 
the epicenter of Eurasia energy policy.  Azerbaijan currently 
exports oil through two non-Russian pipelines to European 
markets (Baku-Supsa (Georgia/Black Sea) and 
Baku-Tbilisi-Ceyhan), in addition to the Baku-Novorossiysk 
(Russia/Black Sea) pipeline, and produces natural gas for 
export via Georgia and Turkey.  As a producing and transit 
country, Azerbaijan is key to the development of a Southern 
Corridor to transport Caspian hydrocarbons to European and 
world markets, including Kazakh oil and Turkmen gas.  The 1 
million barrel per day BTC pipeline was disrupted during the 
August crisis by an explosion in Turkey unrelated to the 
Russian invasion of Georgia, but Russian bombing near Tbilisi 
did destroy a rail crossing vital to Baku's back-up transport 
plan.  For this reason, the USG has conveyed to the GOAJ the 
United States' interest in cooperating on critical energy 
infrastructure protection. 
 
¶9. (SBU) Bilateral difficulties centering on the price of 
Azerbaijani gas now being sold to Turkey and the 
unwillingness of Turkey to grant transit to Azerbaijani gas 
that would be exported in the futue to European markets are 
the major obstacles tothe success of the "Southern Corridor" 
project, which seeks to diversify routes for Caspian gas to 
European markets.  Azerbaijan's diplomatic difficulties with 
Turkey at the moment intensify this problem. 
 
¶10. (SBU) Azerbaijan's oil production at offshore fields, 
which are mainly operated by a consortium led by British 
Petroleum (BP), have the capacity of 1 million barrels per 
day; however technical disruptions in the fall and winter 
reduced that output.  Meanwhile, international oil companies 
are urging Azerbaijan to conclude agreements with Kazakhstan 
to allow oil to flow by tanker to BTC from the mammoth North 
Caspian Kashagan field, which should come on line in 2013. 
Chevron has already begun shipping small volumes of oil from 
Kazakhstan's Tengiz field to BTC.  In this connection, we are 
noting to the GOAJ that the goals of transparency, security 
and safety will be e best served by including the 
International Energy Companies who are partners in the 
Kashagan and Tengiz fields in any cross-Caspian 
transportation arrangements. 
 
 
Democracy and Reform 
-------------------- 
 
¶11. (SBU) Generally speaking, the October 2008 presidential 
election and the hastily conducted March 2009 referendum that 
amended the Constitution, inter alia, to lift the two-term 
restriction on the President were  not positive moments in 
Azerbaijan's democratic transition.  The referendum in 
particular was arranged with lightning speed by the ruling 
party, with parliamentary approval, and Embassy observers 
reported widespread fraud during voting.  However, the fraud 
appeared to be directed at padding the vote totals, and we 
assessed that especially considering the low bar that 
Azerbaijani law sets for the adoption of referendum measures, 
the Government would have succeeded in any event.  The main 
opposition parties boycotted the October election and the 
referendum. 
 
¶12. (SBU) Many observers believed that once he was secure in 
another five-year term, President Ilham Aliyev would make 
conciliatory gestures to the opposition and tack back on to a 
moderate course on democratization.  This has not yet 
happened to a large extent, but there are some minor and 
encouraging indicators.  One prominent imprisoned journalist 
benefited from an amnesty and was released, and the President 
recently intervened to overturn the convictions of two other 
journalists who had been sentenced to prison and hard labor 
under a criminal libel statute.  We are also informed that 
the GOAJ is coordinating the drafting of implementing 
legislation for the constitutional changes approved by the 
 
BAKU 00000359  004 OF 004 
 
 
referendum with the Venice Commission of the Council of 
Europe.  However, the media environment is still far from 
free and the Council of Europe has appointed a Special 
Rapporteur on Political Prisoners, a German parliamentarian 
who is expected to visit the country in June. 
 
¶13. (SBU) Should your Azerbaijani interlocutors raise any of 
these issues, you are certain to hear complaints that 
Azerbaijan is treated unfairly by the United States and 
Europe on human rights and democracy compared to Armenia.  A 
consistent message that the United States has no double 
standards on human rights and that security and stability are 
enhanced by, and indeed depend on, the development of 
democracy and respect for human rights will reinforce the 
unwavering message that the United States delivers to 
Azerbaijan on the key reform issues. 
 
Comment 
------- 
 
¶14. (SBU) Your visit provides an opportunity to engage with 
key GOAJ decision makers and demonstrate the strategic 
importance of the United States' relations with Azerbaijan at 
a moment of important regional change.  Your visit also 
affords an opportunity to brief the Azerbaijanis on the Obama 
Administration,s approach to relations with Russia.  At the 
NATO/IPAP conference, our willingness to participate at such 
a senior level will be well received and timely, as well as a 
positive sign of the United States' intentions, with 
Nagorno-Karabakh and elsewhere, in light of the 
Turkey-Armenia process.  End comment. 
LU