Azerbaijan International

Spring 2002 (10.1)
Pages 18-19

Back On The World Map
Integrating Azerbaijan Into The Global Economy

by Richard Armitage

Edited remarks by Deputy Secretary of State Richard Armitage on receiving the "Freedom Support Award" at the Fifth Annual Conference of the U.S.-Azerbaijan Chamber of Commerce (USACC) at the Renaissance Hotel, Washington, D.C. on March 8, 2002.

Hafiz, [Pashayev, Azerbaijani Ambassador to the U.S. since 1993] it's great to be back with you. This is kind of like "old home week" for me. I'm delighted to be back with the Chamber.

I'm struck, however, that if anybody should be receiving a leadership award, it ought to be the people of Azerbaijan, who over the last 10 years have led a region to a new way of life. So my own view is, if you want to give any applause, let's give it to the people of Azerbaijan, who deserve the award for leading the way in the region.

Ambassador Pashayev, Ambassador [Ross] Wilson [U.S. Ambassador to Azerbaijan since 2000], Ambassador Stan Escudero [Former U.S. Ambassador to Azerbaijan (1997-2000) and now a business consultant in Azerbaijan], whom I saw a moment ago, Minister [Farhad] Aliyev [Azerbaijan Minister of Economic Development], and my friend Mr. [Valeh] Alasgarov [SOCAR's General Manager, Foreign Investment Division], so nice to see you again. And all friends of the U.S.-Azerbaijan relationship.

Let me say what a special pleasure it is for me to be here today at the first U.S.-Azerbaijan Chamber of Commerce luncheon, post-907. Now, the establishment of the World Trade Organization [WTO] advisory is obviously an important step in Azerbaijan's accession to the world economy and this body will help bring Azerbaijan's trade regime into WTO compliance. Now, this entry into the WTO is going to take time and a serious and sustained effort. But the end result will be an Azerbaijan fully integrated into the world economy and capable of attracting international investment across multiple and diverse sectors.

And TDA [U.S. Trade & Development Agency] Director Askey and Regional Director Dan Stein, who is on his way to someplace or another right now, deserve credit, in my view, for the hard work on this project. But we especially appreciate the firm commitment and the steady leadership of Minister Aliyev, the Minister of Economic Development. Well done, sir.

10 Year Ties
Now, you know, February 28th marked the 10th anniversary of the establishment of diplomatic relations between the United States and Azerbaijan.

And something I know a little bit more about, March 17th will mark the 10th anniversary of the establishment of our Mission in Baku. Having been there on the ground floor, I feel quite good about that. But what a tumultuous birth occurred ten years ago, as the people of Azerbaijan wrested themselves away from outmoded Soviet institutions and turned firmly to the West.

And over these past 10 years, what we've seen is a rebirth, a reappearance on the world map of the Republic of Azerbaijan after an absence of more than seven decades. And the United States supports a peaceful and stable Azerbaijan, a democratic state based on the rule of law, participating in the global free market economy and integrated into international and Euro-Atlantic institutions. The road to this goal has not been easy, as we all understand, and most tragic of all has been the conflict in Nagorno-Karabakh. Our colleague, Ambassador Rudy Perina, is in Moscow now, going to Azerbaijan tomorrow, in a continued search for a resolution to this difficult issue between Armenia and Azerbaijan.

U.S. Aid to Azerbaijan
So where are we today? Well, since Azerbaijan regained its independence, our nation has allocated more than $336 million in assistance to Azerbaijan. In addition to that, the United States Government has delivered $103 million in Defense Department excess and privately donated humanitarian commodities to Azerbaijan over the past 10 years.

Foreign aid is an enabling tool to help Azerbaijan improve its capacity to participate effectively in the global economy, to trade successfully, to attract investments. In Fiscal Year '02, the overall United States Government assistance to Azerbaijan is increasing, up from $46 million last year to over $52 million this year. Security-related assistance, which is now allowed since we've waived Section 907 restrictions [Congressional clause in the Freedom Support Act of 1992 that denied aid to the government of Azerbaijan], also increases significantly from $2 million last year to over $10 million this year.

And for the first time, we believe we can pursue engagement with all the nations of the South Caucasus, advancing our common goals for stability and development of the region as a whole.

Now, the new assistance program includes new counter-terrorism and security assistance initiatives, in addition to the ongoing broad range of programs in the areas of democratic reform, humanitarian aid, and economic reform. We're looking at beginning law enforcement programs in Azerbaijan, which could include assistance in the areas of forensic labs, counter-narcotics training and police academy development.

And we're looking at advisory programs on financial crimes and terrorist financing, and training and equipment for maintaining criminal records and databases of fraudulent passports and counterfeit currency and training on countering organized crime. In the security area, Azerbaijan will now be eligible for IMET [International Military Education and Training] program grants to train Azeri military personnel at U.S. institutions and to provide English language training.

Additionally, Azerbaijan has been allocated $4 million from the FMF [Foreign Military Financing] assistance, which will allow the procurement of U.S. military articles and services to enhance legitimate defense capabilities, interoperability, and peacekeeping capabilities. Finally, Azerbaijan has applied to enter the National Guard State Partners Program, and Azerbaijan's armed forces will be paired with citizen soldiers of one of our states and learn from what the National Guard does best, in areas of disaster relief and humanitarian emergency training.

But beyond the new programs that the waiver of 907 has finally made possible, we're going to continue to work in the areas where we have been making progress for the past ten years. Our democracy assistance programs are promoting the rule of law, helping NGOs [non-governmental organizations], political parties and the media to more effectively articulate public interest, as well as to strengthen civil society.

U.S. programs also work with the Central Election Commission and municipal councils. Since 1993, over $54 million has been spent on educational exchange and democracy development programs, and approximately $14 million has been budgeted for these programs in Fiscal Year '02.

Exchanges and training and partnership programs provide opportunities for current leaders and the next generation of Azerbaijan leaders to learn about U.S. society and institutions firsthand, and even more importantly, we believe, to forge personal ties with individual Americans and personal ties to individual American institutions. Since 1993, more than 1,700 Azerbaijanis have traveled to the United States as participants in these programs, and there will be more in the future.

Our economic reform programs focus on accelerating growth, development of private, small and medium enterprises in agriculture and in other related areas. The U.S. will continue to support American companies through OPIC [Overseas Private Investment Corporation], through TDA, as you saw today, and U.S. Export-Import Bank activities.

Our humanitarian assistance to Azerbaijan has primarily focused on relief to refugees and internally displaced persons [IDPs], to encourage economic development and to lessen human suffering. And this must continue.

And lastly, we will provide particular nonproliferation assistance under the Export Control and Border Security Program, including support for patrol boats, for the maritime border guards, and radio equipment for land border guards. The United States is committed to an independent and sovereign Azerbaijan in control, in full control, of its borders.

No American official can stand in front of an audience this recent after the horrors of "9/11" without mentioning terrorism. In particular, I want to mention what Azerbaijan is doing to help the United States and the rest of the world in the global war on terrorism. I'm delighted to say that Azerbaijan has an outstanding record of cooperation with the United States on counter-terrorism issues, cooperation that well precedes and predates the horror of September 11th, in assisting investigations and in sharing information.

But after September 11th, President Heydar Aliyev and other leading figures in Azerbaijan have given strong public support to our efforts. The people of Azerbaijan have shown their support as well. Crowds of thousands turned out in Baku to sign the U.S. Embassy September 11th Condolence Book. Nor did it pass unnoticed, the kindness and graciousness of President Aliyev who visited our Ground Zero [what remains of the New York World Trade Center after the terrorist attack].

But in addition to moral support, Azerbaijan stepped up to the plate and offered crucial cooperation on the war on terrorism. This cooperation continues to be vital. Azerbaijan has granted blanket overflight rights to U.S. and coalition aircraft, and has also offered the use of Azerbaijani air and military facilities and the full cooperation of Azerbaijan's law enforcement and intelligence officials.

Azerbaijan has worked hard to combat terrorist financing, the dark side of the phenomenon of globalization. Azerbaijan ratified the 1999 International Convention on the Prevention of the Financing of Terrorism on October 1st of last year. And Azerbaijan is currently preparing national legislation to implement this convention. At the moment, they are operating under a presidential decree.

Baku has requested U.S. assistance in drafting that legislation and other anti-terrorism legislation, and now that we have the waiver, this too can be possible. With a greater engagement possible since the waiver of 907, we can do even more in this very important area, and it's inseparable from the drive for economic reform that we investigate and freeze potential terrorist assets.

Caspian Borders
Now, many of our friends from the oil industry might be even more interested in a short discussion of the Caspian. Azerbaijan is the linchpin of the project that will bring prosperity to the peoples of the South Caucasus and ensure their integration with the world economy. That's the east-west energy corridor. The Shah Daniz gas pipeline and the Baku-Tbilisi-Ceyhan oil pipeline have moved from concept to blueprint, and will soon be a reality. It's our view, our understanding, the construction phase will begin this summer.

And we support Azerbaijan's peaceful development of Caspian resources through international investments in existing production-sharing arrangements. But it is our strong belief that the Caspian Sea must be an area of cooperation, not an arena of conflict. We support Azerbaijan and its efforts to deal peacefully with the issue of Caspian boundaries in a way that allows resource development to proceed.

When President Aliyev was recently here in the States [February 2002], and went on to Cleveland for a medical checkup, I had two occasions to chat with him about this very issue. It is not a secret to those in this room that Iranians were pressurizing a bit our friends from Azerbaijan.

And as the President left for Cleveland, I assured him, on behalf of our government, that we would keep our eyes fully open to the question of Iranian pressure. And while he was staying in Cleveland, I had the opportunity to call him again to update him on what we had seen and what our view was, and to ask him what he needed. We are not going to stand idly by and have friends pressured by their neighbors, and everyone must understand this.

Beyond Oil
Now, beyond the energy section, we support Azerbaijan's attempt to develop sectors other than the energy to ensure a robust and diversified economy that brings prosperity to the country by improving the investment climate, the administration of tax and customs, and the strengthening of the rule of law.

For the past several years, the United States has imported art, antiques, apparel and grains, seeds and fruit from Azerbaijan. Textiles and agriculture are no less important for a healthy Azerbaijani economy in the long run than oil and gas, and Azerbaijan is one of the largest markets in the world for U.S. exporters. This economic reform effort is vital to the prosperity of Azerbaijan. Licensing, registration and other bureaucratic vestiges of the former Soviet Union, coupled with a lack of clarity and transparency in tax law and regulations, obviously, as you so well know, hamper investment.

In January, we concluded the fourth meeting of the U.S.-Azerbaijan Economic Task Force. Within this forum, Azerbaijan and the United States can work together to focus on the development of Azerbaijan's business environment, especially for the non-energy sector, and urge government cooperation with the business community.

Now, finally - I guess this is a bit of self-promotion, Reza [Vaziri, Co-Chair of the USACC] - as a graduate of the U.S.-Azerbaijan Chamber of Commerce and as a past co-chair myself, I want to commend the work of this Chamber in promoting U.S.-Azerbaijan understanding, as well as investment.

As reflected in the remarks I've just made, the relationship between the United States and Azerbaijan has expanded quite remarkably over the past 10 years, and efforts such as you and your colleagues in the Chamber have put forth have been absolutely key in helping us maintain momentum, in ensuring cooperation, and in garnering the opportunities, putting not only U.S. interests, but U.S. and Azerbaijan mutual interests, forward.

So I am going to end my remarks today with a plea to the Chamber, and a plea to the members of the Chamber: Please keep it up. For a long time, it was the U.S.-Azerbaijan Chamber of Commerce that was the real link between our two nations. I think now we've got a pretty solid government-to-government link. It won't be broken, and I don't want you to slacken in your efforts. Please, please, keep it up.

Good luck to you all, and thank you very much.


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