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PP RUEHDBU RUEHLN RUEHSK RUEHVK RUEHYG
DE RUEHKB #0395/01 1350417
ZNR UUUUU ZZH
P 150417Z MAY 09
FM AMEMBASSY BAKU
TO RUEHC/SECSTATE WASHDC PRIORITY 1186
INFO RHMFISS/CDR USEUCOM VAIHINGEN GE PRIORITY
RHMFIUU/CDR USCENTCOM MACDILL AFB FL PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY
RUCNCIS/CIS COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 04 BAKU 000395 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL AF AM TU AJ
SUBJECT: SCENESETTER FOR USEUCOM COMMANDER GENERAL 
CRADDOCK, MAY 20-21 
 
Summary 
------- 
 
¶1.  (SBU) Your visit comes as Baku continues to be 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 on issues, including 
the future of westward transit of Caspian hydrocarbons. 
President Aliyev met with Armenian President Sargsyanin 
Prague on May 7; Turkish Prime Minister Erdogan visited Baku 
May 13.  The President and other high-level officials 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.  Our 
three-pronged approach to the bilateral relationship 
(security, energy and political/economic reform) remains on 
course.  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 three 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.  Azerbaijan's Minister of Defense will claim that 
they make no secret that they are building their military 
power in order to defend their territory.  He will likely 
claim that lack of military sales from the US is driving them 
to further dependence on Russian-made weaponry, and further 
from NATO integration.  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. 
 (The Iraqi Government at that time asked most smaller 
coalition contingents to depart.)  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 00000395  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 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 was the Foreign Minister's objection to 
not offering input early in the process, and his objection to 
the "political aspect" of conducting exercises.  He clarified 
that if the exercise was "in the spirit of PfP," and 
"multilateral," his objections would be lifted.  Other issues 
to be worked were those of criminal jurisdiction over US 
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, 
AZAL, etc.  It should also be noted that Azerbaijan is 
participating in NATO's annual Operation Longbow/Operation 
Lancer exercises, which is taking place this year in Georgia 
May 6 ) June 3, and they never waived on their intent to 
participate, despite reporting to the contrary.  President 
Aliyev likes to point out to visitors that Armenia declined 
to participate. 
 
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.  Presidents Aliyev and Sargsian 
last met during the summit on EU Eastern Partnership in 
Prague on May 7.  Public accounts of the results were mixed, 
with Azerbaijani commentators, both official and private, 
taking a skeptical view. Aliyev and Sargsyan are scheduled to 
meet again in June in St. Petersburg.  If the issue is raised 
in your meetings, we recommend that you emphasize that the 
United States views Turkey-Armenia reconciliation and 
Nagorno-Karabakh resolution as processes that both need to 
move forward to promote regional stability - 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 process. 
 
Energy 
------ 
 
BAKU 00000395  003 OF 004 
 
 
 
¶8.  (SBU) Energy is one of the three essential areas of 
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 uncorrelated 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 future to European markets are 
the major obstacles to the 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 
made 41 changes to 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, which are generally weak and lack popular 
support, 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 and increase the GOAJ's 
respect for human rights.  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 may coordinate the drafting of implementing 
legislation for the constitutional changes approved by the 
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.  Lack of 
freedom of assembly is a large problem. 
 
 
BAKU 00000395  004 OF 004 
 
 
¶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. 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 Administration's 
Afghanistan-Pakistan review and NATO's role within it.  With 
the President and others, your comments 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