Our Analytics 26 november — 13:02

Moscow premiere of Mehriban Aliyeva (View from Moscow)



The visit to Moscow of the First Vice-President of Azerbaijan, Mehriban Aliyeva has ended. Actually, its results can be divided into two parts: political and business-economic. In the first case, we must analyse the reasons for such a high level of official reception and the signs of geopolitics arising from it.

The second block is more problematic. Russian-Azerbaijani relations can no longer be viewed only in a bilateral context. These are not only interconnected lines of small and medium level, projects of large state corporations, but also an element of trans-regional integration, which includes projects in the Russia-Turkey-Azerbaijan triangle, projects of Azerbaijan with Iran, relations of Azerbaijan with the Eurasian core as a whole, including Belarus and Kazakhstan.

Putin presents order to Aliyeva

Main intrigue

The main political intrigue of the 10th Russian-Azerbaijani forum is, of course, the very fact of the visit of Azerbaijan's first vice-president to Moscow, furnished in the Russian capital at the highest level. For three days, in addition to the plenary meeting of the forum, Mehriban Aliyeva progressively met with Prime Minister Dmitry Medvedev, President Vladimir Putin and Speaker of the Federation Council Valentina Matviyenko, who, according to the Constitution, ranks third in the Russian political hierarchy. By the way, we should note that the venue of the final day of the forum is by no means an ordinary venue; at the same time, the 19th congress of the ruling United Russia Party started at VDNKh.

At one time, the decision of Ilham Aliyev on the forking of the presidential power system aroused interest in Moscow. The vice-presidency institution in the CIS had unenviable history. In Russia, Kazakhstan, Uzbekistan and Kyrgyzstan, this position became the cause of the inter-clan struggle for power, political conflicts, in some cases quite bloody. Let us recall at least the events of October 1993 in Moscow.

However, in the case of Azerbaijan in the mid-2010s, the introduction of this position became a factor in multiplying the capabilities of the presidential vertical. During the days of the Moscow forum, Ilham Aliyev held an important administrative event: a review of Sumgayit's achievements over 70 years of the development of the industrial city of chemists.

Ilham Aliyev is for multiplying the capabilities of the presidential vertical

Given the busy schedule of contemporary international life, this is only one example where the president will have a choice at which event he is personally present and where the first vice-president can represent the interests of Azerbaijan to no lesser extent. And this is a very serious strengthening of Baku's foreign policy capabilities, moreover in the form of soft power.

How this works became immediately apparent, even by formal signs. Mehriban Aliyeva was met at the highest level. Imagine a conditional country occupying 45th place in trade with Russia, and with a share of 0.4% of the total Russian goods turnover (this is the current position of Azerbaijan on the scale of foreign trade partners of the Russian Federation). Conducting an inter-regional forum with such a partner, will the entire troika of Russian leaders receive its vice-president? Unlikely.

And here, of course, the Kremlin's political inclination is obvious in favour of betting on a long-term strategic partnership not just with Baku, but with the Aliyev political dynasty, even if this partnership does not have a significant (equivalent) material base in terms of large momentum: over the past two decades the waves of economic dynamics of our relations either subsided or rose again.

Whom else did the troika receive in Russia?

There were better times than today. So, for example, in 2013, despite the difficult situation on world markets, Russian-Azerbaijani trade turnover reached a historic high of $3.6 billion (trade was supported by the purchase of freight cars for the Azerbaijan Railways and the supply of Russian military equipment). Another thing is that Azerbaijan for Russia is not so much investments and trade, which nevertheless occupy an important share of attention, but, first of all, a way to strengthen the general geoeconomic platform of Russia in relations with the south of Eurasia and, in particular, with the Turkic countries.

Let's not forget that the composition Turkey-Azerbaijan-Kazakhstan-Uzbekistan, which includes the core of the EAEU, is for Russia the most important direction for enhancing the advantages for the next decade. It is enough to see the number of discussed infrastructure projects and the range of existing programs. Therefore, Azerbaijan among the neighbouring countries of Russia is the most important element in the arc of foreign economic deployment. In fact, Azerbaijan already has a place of an informal observer in the EAEU: Ilham Aliyev was invited to the EAEU summit in December and to the BRICS summit in 2020.

This explains why Moscow seeks to maximise the ties between the elites of the two countries. This work is aimed at the humanitarian component, at contacts between leaders of culture and religion, education and science. Note that in the status of the First Vice-President, Mehriban Aliyeva made her second visit to Moscow.

The first was not official: in December 2017, at the invitation of the Patriarch of Moscow and All Russia Kirill, who awarded her the Order of Equal-to-the-Apostles Princess Olga of the II degree. During the current visit, Mehriban Aliyeva attended the International Biennale of Contemporary Art, where the works of her daughter Leyla Aliyeva were presented.

It is obvious that the attention of celebrities, the smiles of bohemians from the world of art and the solemn honours from Russian politicians surrounding Mehriban Aliyeva do not reduce her keen attention to the real state of things. The effective and somewhat even managerial algorithm that she managed to launch in Azerbaijan at the intersection of personnel and enlightenment and educational activities is also applied to search for external resources for the development of Azerbaijan. Her task is to expand contacts with three groups of elites (creative-humanitarian, business-political, managerial) that influence the general atmosphere and partly the course of Russia. This interest is due not only to the proximity of a powerful northern neighbour, but also to the fact that the orbit of the Eurasian process is most robust from the point of view of the political stability of the ship of power (Moscow, unlike the West, did not try to invade the internal life of Azerbaijan and impose political axioms) and, of course, the stability of the course of economic development (Russia will remain the main export market of non-oil products of Azerbaijan for many years to come).

But not Moscow alone. If you look at the dynamics of foreign policy visits of the first vice-president, they are more likely directed to the West. In particular, in this status, Mehriban Aliyeva visited France four times, where in March she held talks with the head of the Rothschild Global Financial Advisory, David de Rothschild. Often the Rothschilds house is called among the world regulators of political and macroeconomic decisions.

Aliyeva met Rothschilds as well

Regardless of the real significance or mythical influence of the head of the French bankers, they understand well the strategic directions of global development. It is characteristic that Mehriban Aliyeva brought the credit line from France within the framework of the 'Convention on the reconstruction of the Sumgayit-Yalama railway line of the North-South transport corridor as part of the railway sector development program.'

Once again, this emphasises the multi-vector nature of Baku's interests, as well as the understanding that arose in Paris in connection with the prospects for the development of the North-South ITC, as an alternative artery, to the Chinese Belt and Road. Now, by the end of 2019, more distinct signals are visible, if not about the turn of Paris to post-Soviet Eurasia, but about a greater understanding of the importance of local integration projects. It should be understood that the impact from the processes of Eurasian integration will be felt by all the players of the post-Soviet space, regardless of membership in the Union. Real partnerships that form integration threads arise between corporations in joint production complexes. Let's say, as in the field of petrochemistry, where the parent company of polypropylene products SOCAR POLIMER gives the opportunity to develop several dozen small industries. By the way, the start of one of the first post-Soviet production of small-tonnage petrochemicals was made in Azerbaijan by the Russian group of companies 'Titan' back in 2003: at the Azerbaijani enterprise 'Titan' they produced technical lubricants and industrial oils, including for Russian Railways, for aircraft manufacturing.

Azerbaijan's value is in its investment stability

Now on the agenda of Russian-Azerbaijani cooperation is the development of agrobioclusters, textile production, the development of transport communications and their digital component. If for Azerbaijan these are jobs and a certain growth in GDP, then for Russia these projects are stable spaces for mutual investments and technological expansion of national platforms.

The significance of Azerbaijan for Moscow lies in the fact that it is the only post-Soviet state, after Russia, a stable investor around the entire perimeter of the common space. And in Russia itself too. Over the past three years, the number of large investment projects in the tourism and construction sectors has significantly increased, the share of Azerbaijani investments in Russia by 2016 exceeded 10% of their total. Among the projects in tourism are the construction of the Ene-Sai hotel complex in the Republic of Tyva ($33 million), a resort in the Stavropol Territory ($25 million). In 2016, investments were made in the machine-building complex: AS Group Investment invested in the 1 May Kirov Machine-Building Plant (it develops, designs and manufactures track machines for the construction and repair of main railways). The Russian subsidiary of AS Group Investment is among eight residents of the Titan Valley special economic zone (SEZ) near Nizhny Tagil... And judging by the SOCAR and Sberbank projects at the Antipinsky Oil Refinery, Azerbaijani investments in Russia will only increase.

Structural Extensions

The delegation of Mehriban Aliyeva included the entire economic bloc of the Azerbaijani government: Minister of Economy Mikayil Jabbarov, Deputy Prime Minister Shahin Mustafayev, business leaders, two regional leaders - mayor of Ganja, mayor of Sheki. On the Russian side, their partners were the head of the Ministry of Economy Maxim Oreshkin, the Governor of the Astrakhan region Babushkin, the Governor of the Rostov region Golubev, top managers and heads of the United Shipbuilding Corporation, Sukhoi Civil Aircraft, GAZ Group, Rosspetsmash, Rostselmash, Transmashholding.

That is, we see a profile of interests. Those enterprises are indicated that either are already conducting projects in Azerbaijan or are planning them.

In one phrase, the common tasks of Moscow and Baku are to sell more and expand structurally. It is important for Baku to understand whether it is possible to increase the flow of agricultural products up to 1 million tonnes per year (this is almost twice in value terms, up to $1.2 billion). Under this market, new agricultural parks of Azerbaijan are being founded. But here the question is not so much political readiness, but the ability of trade networks of the Russian Federation (Dixie, Magnet, X5Retail Group) to technically open up wider access to Azerbaijani goods. These topics will be developed during the meeting of the Russian-Azerbaijani intergovernmental commission, which is scheduled for December 9.

Let us summarise. Structurally important for us is the launch of new enterprises: such as the assembly of harvesting and special equipment, the emergence of joint railway carriages building, the complexity of the aircraft assembly project, now only focused on helicopters. And here four aspects are key:

- course on de-dollarisation. That is, an increase in the number of trading enterprises of small and medium enterprises on common payment platforms tied to national currencies;

- expansion of industrial production. Clearly, this can be seen in the GAZ Group auto assembly project in Azerbaijan. Here is the construction of the Russian pharmaceutical R-Pharm;

- development of communications and digital platforms. Here, of course, the leading role is played by the development of roads and railways communications, in the long run to high-speed traffic Moscow-Baku. Digital trading platforms are laid in a separate block in the 'Program of cooperation in the agricultural sector for 2020-2022';

- development of large system projects. The shortage of such is obvious. One option is the construction of a nuclear power plant. Here we get almost a mini-city with tens of thousands of jobs. Revenues from energy exports. Such a project will be a serious impetus to the construction industry: thousands of tonnes of concrete, hundreds of pieces of equipment, the development of the steel industry, energy communications.

All this requires detailed and in-depth study. But most importantly, such a strategy is designed for the prospect of a deep, systematic expansion of our relations not only between Azerbaijan and Russia, but also in a wider context, together with other allies and partners.

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