German Chancellor Angela Merkel is going to visit Azerbaijan on August 25. Before her trip to Baku, head of German government is going to visit post-revolutionary Armenia and visit friendly Georgia, which is the most ardent supporter of integration into the EU in the Caucasus. Angela Merkel will pay a visit to this region for the first time in 13 years of her rule, which shows increased importance of the South Caucasus in German foreign policy agenda.
However, Merkel's visit to Azerbaijan, which traditionally preserves geopolitical neutrality, is especially interesting against the background of developments in the region. This country has demonstratively refused to sign the "Euroassociation" and insisted on an exclusive partnership agreement with the EU that meets its interests. Moreover, it's impossible to implement the Trans-Caspian gas pipeline project, through which Europe could gain access to Turkmen gas, without Baku's consent. Merkel understands that she has to negotiate these issues with Aliyev.
In the 1990s, Germany couldn't take a peace of Baku's "oil pie", losing to Great Britain, which is traditionally more active and efficiently working in Azerbaijan. For comparison, during period from 1993 to 2016, total volume of direct investments of German enterprises in Azerbaijani economy amounted to 739 million euros. Direct investments of Great Britain amounted to 1.833 billion dollars just in 2017, mainly thanks to oil and gas industry of the republic.
Intensive dialogue on energy cooperation in gas sphere was established between Baku and Berlin in recent years. In particular, Germany shows great interest in diversifying sources of gas imported by the European Union, and that's why it considers Caspian basin with its huge natural gas reserves as an important alternative source - especially due to high costs of liquefied gas from the United States, instability of the situation around Iran and serious attempts of the US to block the Nord Stream-2. Baku can be Berlin's central partner in this matter. It's no coincidence that German enterprises such as Salzgitter Mannesmann International GmbH, Arcelor Mittal Bremen GmbH, AG der Dillinger Hüttenwerke, Siemens AG, RMAKehl GmbH and Uniper Technologies GmbH were involved in construction of the Trans-Adriatic Pipeline.
After signing of the convention on Capian Sea's legal status on August 12 in Aktau, issue of transportation of not only Azerbaijani but also Turkmen gas to the European markets became relevant once again. It can be supplied after construction of the Trans-Caspian gas pipeline and the Southern Gas Corridor (SGC). Information spread in March of this year shows how serious Germans are regarding development of the SGC. As Euractiv reported, the German Finance Ministry will provide 1.2 billion euros to finance Azerbaijani sector of the SGC. Money will be sent to the closed joint-stock company "Southern Gas Corridor". It was founded in 2014 by the decree of Ilham Aliyev. This company had to consolidate, manage and finance development of the Shahdeniz offshore field, expansion of the South Caucasus Pipeline, construction of the Trans-Anatolian gas pipeline (TANAP) and the Trans-Adriatic gas pipeline (TAP). Operational management of the projects is carried out by the state energy company SOCAR.
That's how German-Azerbaijani gas agenda became relevant more than ever, and topic of energy cooperation will undoubtedly become one of the central components of future high-level talks.
Military cooperation may also be discussed. At the end of June it was revealed that German defense concern Rheinmetall plans to sign deals with Azerbaijan. Rheinmetall representative John Taylor signed declaration on "future bilateral cooperation" with the Ministry of Defense Industry of Azerbaijan. There's no doubt that regional agenda, including the Nagorno-Karabakh conflict, prospects of negotiations with new Armenian government, as well as worsening international situation around Azerbaijan's close ally, Turkey, and its southern neighbor Iran, will be discussed.
Science and education
Cooperation between two countries in the field of education is also developing. In 2017, Germany financed opening of the Goethe German Language Studies Center in Baku. Also in 2017, center received support from German state in the amount of 296,500 euros, while in 2018 financial support will reach half a million euros. In 2000-2016, the German Academic Exchange Service (DAAD) provided over four thousand scholarships to Azerbaijani students, several German scientific institutions and German political foundations provided dozens of scholarships. For technical reasons, these statistics don't include scholarships provided by DAAD until 2000. DAAD's operational activity in Azerbaijan received around 1.2 million euros until 2017.
Number of Azerbaijani students studying in Germany has been steadily increasing. If in 1996-1997 Germany had just 44 Azerbaijani students, then in winter semester of 2016-2017 number of students already reached 824. Germany is also an attractive labor market for highly qualified Azerbaijani specialists. According to official data, by the end of 2017, over 600 Azerbaijani doctors were working in German clinics.
Problematic issues
As for problematic issues in relations between Berlin and Baku, there are human rights issues, as well as Germans' dissatisfaction with practical suspension of activities of German political foundations in Azerbaijan several years ago. Responding to parliamentary inquiry of the Alternative for Germany party in 2017, German government stressed its concern over imprisonment of political activist Ilgar Mammadov and failure of Azerbaijani authorities to comply with demands of the European Court of Human Rights. However, on August 13 Mammadov was released from prison. The Shaki Appeal Court changed its ruling to suspended sentence. It's obvious that imprisonment, of an activist who represents small number of political movements wasn't in the interests of Azerbaijani government. Hype created by opposition around this person became a convenient pretext for criticism of the authorities. Today this pretext no longer exists.
As for activities of German foundations in Azerbaijan, this topic was discussed during Angela Merkel's previous meetings with Ilham Aliyev. According to available information, successful negotiations on this issue were held and agreements between Berlin and Baku were reached.
Azerbaijan, in turn, expresses dissatisfaction with insufficient support of Germany in the issue of the Nagorno-Karabakh conflict. It should be noted, however, that Berlin consistently pursues policy of non-recognition of separatist formation known as the Nagorno-Karabakh Republic, emphasizes illegality of "elections" and "referendums" held there and openly says that there's regular army of Armenia in Nagorno-Karabakh, while overwhelming majority of "self-defense forces" are also formed from draftees from Armenia. However, German government hasn't banned separatists from Nagorno-Karabakh from entering into their territory. With their Armenian passports they freely visit Germany and even hold meetings with some deputies.
Baku is also unhappy with Germany's double standards policy, since It doesn't want to impose sanctions against Armenia over occupation of Azerbaijani territories. Answering question of Azerbaijani journalist three years ago regarding why Germany imposes sanctions against Russia, but doesn't do the same when it comes to Armenia, Merkel said: "Russia plays active role in this conflict. Considering the fact that Russia and Armenia are cooperation on some issues in this conflict, I think it's safe to say that we have the same approach." There's no doubt that Baku doesn't understand this position, since Armenia is, albeit nominally, an independent subject of international law. Hardly anyone in Baku seriously believes that anti-Russian sanctions imposed due to situation in Ukraine are related to the Nagorno-Karabakh issue in any way.
