Alexander Rahr: "Russia moves toward a pragmatic cooperation with Azerbaijan"

Interviewed by Orkhan Sattarov, head of the European office of VK


Russian President Vladimir Putin's visit to Azerbaijan has caused a lot of judgements about the new trends of Russian policy in the Caucasus, which will be continued in specific agreements signed in Baku. The two neighbouring and friendly countries reaffirmed their policy of strategic partnership, providing for compulsory coordination of the interests of each other, including those on external sites. Independent expert and scientific director of the German-Russian Forum Alexander Rahr told VK about the contours of the new Russian policy in the region.

- Alexander Glebovich, how would you rate the prospects of Azerbaijani-Russian energy cooperation in the context of the energy security of Europe? In particular, in the media there are rumours about the possibility of acquiring shares in the TAP and TANAP projects by "Rosneft"...


- First of all, I think "Rosneft" is very difficult to stop. This is a company that is growing rapidly in Russia, it is now strategically aimed at gaining its share, not just a niche, but its large share in the large gas business. Not only in Russia, but also outside Russia, so it is logical that such a company which has, incidentally, the closest strategic forms of cooperation with Exxon, with BP, will now seek to obtain for itself the strategic direction of actions in the gas sector. The support from the government for "Rosneft", in my opinion, is very large, and in the coming years the company will determine the direction vector of the entire Russian energy policy.


It seems to me that if "Rosneft" will really unite with SOCAR (State Oil Company of Azerbaijan - VK) in one direction or another, in the construction of pipes or, perhaps, as a share of pumping gas - I do not rule out that "Rosneft" itself is interested in starting gas production in the northern part of the Caspian Sea - it will lead to a truly large-scale strategic cooperation.


Russia has always tried to cooperate in such a way. However, something has changed. In previous years, we can say in the last 20 years, Russia tried to prevent the break-up of its transport monopoly. "Gazprom" tried to deny it and not to let the post-Soviet states float freely, that is, not to give them the opportunity to build or engage in alternative transit and transportation routes bypassing Russia. But in this great game Russia could not support its policies. And it had to accept the fact that both Turkmenistan and Kazakhstan, which previously could be somehow constrained in this respect, too, had their pipes to China, and now there is a very serious competition to Russia. Azerbaijan is also beginning to be serious competitor for Russia, of course, and especially for the "South Stream" in the European markets. And so I think this is the proper development.


If not "Gazprom" with its own plans, so "Rosneft" will search some common ground with its rivals and try to get into this business. I think if that happens, we will have less geopolitics and more economic cooperation, more economic benefits. Russia will no longer have to think geopolitically, to let or not to let someone, to prohibit someone to build a bypass pipe and collaborate with someone there. And here, in principle, Russia is engaged in a project that already exists and is being implemented without it in order to provide capital and earn money. I think it's a smart move, if it takes place.


- What expectations do you link with the visit of Vladimir Putin to Azerbaijan, given that some time ago many experts were talking about a pause and even a certain cooling in relations between the two countries?


- I would not say that Russia's relations with Azerbaijan were heavily damaged. There is one problem. I think it does not lie in the gas field. Azerbaijan has its own ally – the strong regional power of Turkey, it has his own ties with Israel and the United States - Russian diplomats, I think, understand this quite well. A problem that has always existed somewhere is the alliance between Russia and Armenia. But I, on the other hand, do not think that in these allied relations, in military alliance relations with Armenia, Russia will automatically act against the interests of Azerbaijan. I have not noticed it.


Russia has always sought to maintain good business relations with Azerbaijan. And it seems to me that what happened over the last few months and weeks, namely Azerbaijan's rejection from building the "Nabucco" pipeline mostly with Turkey and the decision to build TAP, is the best of all, of course, not perfect, but the best option for Russia. If the EU's presence and then, maybe, Americans had been dominant in the Caucasus through, say, such a large western pipeline as "Nabucco", Russia would be disturbed. Now Azerbaijan and Turkey are in fact regional powers and countries which already depend on these resources, and by geographical location, Turkey is a transit corridor to Europe. Russia can accept the fact that they are building and will control the flow of gas through alternative routes bypassing Russia to Europe.

I think that Putin's visit in this regard will be aimed at making an agreement on the joint forms of work, and the inclusion of "Rosneft" in this new consortium is the evidence of Russia's intentions here to disconnect from purely geo-political attitudes and move towards a very pragmatic cooperation.

- You spoke about Armenian-Russian cooperation. In this context, the question arises about the initialling by Armenia of the Association Agreement with the EU and at the same time the prospect of Armenia's accession to the Customs Union. What do you think, are these two perspectives compatible with each other, and what is your outlook on future developments?

- I have talked about the fact that, as for the Caucasus and Azerbaijan, Russia wants to reduce the proportion of geopolitics, to return to a more pragmatic economic cooperation. You touched on the issue of clear geopolitics. It seems to me that the associate status, which is now proposed, by the way, to Ukraine, and Moldova, and Armenia by the EU, also shows the geopolitical thinking of the EU, which fears that Russia, which has become stronger in the last 12 years of Putin's rule, ventured to restore something similar to the Russian Empire. This was said by Mrs. Clinton and other politicians in the West. This process causes the most concern in the entire security policy in Europe. Therefore, the West will continue to offer associate status, including to Armenia.


But there are some catches here. First, it seems to me that since there are themes of geopolitics, they can be negotiated. Armenia and Ukraine may agree to have associate status with the West and the East. The association with the EU, for them, of course, is beneficial, because through the European Union both Armenia and Ukraine will come to the rule of law in Europe and the legal order. This is a defense against corruption, more pure competition, strengthening the legal system and, therefore, for these countries it is very profitable, especially for the businesses in these countries, to protect their activities, their accumulated capital, by strengthening the legal system.

On the other hand, it is also a fact that the Armenian and Ukrainian products in most cases are not competitive in the European markets, and both countries need, of course, the Russian market. The CIS is almost non-existent, but the Eurasian Union will exist. And there's a very big opportunity for these products, they're more competitive. So closing the way for their business, for example, Armenian business, to the Russian market is also impossible. Because you need to find a way to become associated both there and here.


I think that it is theoretically possible if both there and here, that is, in the EU and in the Eurasian Union there will be very clear and very strict rules of the WTO, it would be the rule of law, and the norms in the Eurasian Union will be more and more like European ones. This is a complex economic and legal work to be done, and this requires political will. I think this is the perfect way to go. I think that, in the end, we will go down this path. Therefore the output for Armenia now is just to play smartly, soberly and pragmatically for itself and to get this status in the East and the West.


But Armenia and Ukraine have some problems in obtaining the status of the West. As we all know, in Ukraine there is Tymoshenko, who is in prison. The West is dissatisfied with very fact that the head of the opposition is in prison, and therefore to the Ukraine, there is more distrust, and it is even unknown whether there will be an agreement. In the case of Armenia, it seems to me that no associated status will be signed unless Armenia agrees to open the border with Turkey or in any case, goes to the liberalization of trade and the border with Turkey. And as we know, Armenia has its own ideology here, its own very serious matter, the issue of genocide, and the requirements of some repentance on the part of Turkey that Turkey, of course, will not make.

These are still significant problems, significant barriers that constantly impede this process and create a situation where we have always been in one status quo, for two decades, with no significant changes.