Friday, October 14, 2005

Azerbaijani-Israeli relations: Movies are just not enough.

In view of the American Greater Middle East initiative aimed at the promotion of democracy, development and support of nascent democracies such as Azerbaijan in the recently expanded Middle East, there is a welcome sign of cultural exchanges between Israel and Azerbaijan. The first Israeli Film Festival organized by the Israeli Cultural Centre and the Sokhnut World Jewish Organization was held in Baku on March 9-12, 2004. But the second pillar of this initiative also calls for reinvigoration in the Israeli vision of its relations with Azerbaijan. As a positive development in this direction, an Israeli delegation, which included government officials and representatives of the Israeli company Meigal, visited Baku on 2-5 March, 2004. Meigal specializes in modern technologies that purge, treat and recycle water. At a press conference in Baku on March 5 held by the Israeli delegation Azerbaijani government officials said that Azerbaijan is interested in buying Israeli water management technologies and installing them at several industrial enterprises because of Israeli rich experience in purging and recycling drinking water. However, this could be only a first step in bilateral cooperation in water management field since Azerbaijan has more than 100 industrial estates on its Caspian coastline, which is 825 km long. Azerbaijani government encourages small and medium-size enterprises and industrial estates to buy Israeli equipment to prevent water pollution of the rivers Kura and Arax as well as its Caspian littoral. An Azerbaijani official from the Ministry of Environment and Natural Resources said,” In ten years, we can equip 30% of the industrial sector of the country with those devices.”

An Israeli expert, Efraim Inbar, who was involved in contacts with the Azerbaijani leadership in the late 1990s, in an interview with the JTA, indicated that there were many similarities between Israel and Azerbaijan such as, "Fear of Iran and radical Islam; suspicion of Russia; friendship with Turkey, and a desire to be part of the West." About 40,000 Azerbaijani Jews have immigrated to Israel. They are familiar with the language, culture and traditions of Azerbaijani people who are historically friendly to the Jews. This community can serve as a great resource for Israeli businesses, which are considering to make investments in Azerbaijan.

Even though the strategic imperatives of the geopolitical situation of the Caucasus have not changed, but there have been many changes in the economic sphere and investment climate in Azerbaijan. With the opening of the Baku-Tbilisi-Ceyhan pipeline in July of 2005, Azerbaijan becomes an important producer of oil and gas for the international market. Oil Transnational Corporations have committed $60 billion to the development of the Azerbaijani oil and gas resources. The Azerbaijani government will reinvest a significant part of these hard currency profits in non-oil sectors of economy. President Ilham Aliyev signed into a law a decree on socio-economic regional development for 2004-2008. The Azerbaijani leadership expects to fund this program through a mix of private investment and foreign loans from international banks, grants from multilateral organizations and foreign aide agencies. It is estimated that regions of Azerbaijan will receive infusions of state investment estimated to reach 16,8 billion US $ over 4 year period. Azerbaijan today is experiencing a construction boom. Milli Mejlis (Azerbaijani parliament) enacted legislation last summer that facilitates further privatization of several sectors of the Azerbaijani economy and guarantee the internationally required standards of transparency.

As this example in the water management field shows an increased economic cooperation and improved trade relations between the two countries will bring mutual benefit. There is a unique window of opportunity for Israeli state and private sector to re-assess the potential of Azerbaijan for bilateral cooperation and direct investment. Israel has already missed an opportunity to participate in the first wave of privatization of the banking industry, which has been completed in April of 2004. If Israeli decision-makers and businessman will not focus on the economic opportunities in this friendly Muslim country in a strategically important corner of the world, it will be a grave miscalculation.
On the diplomatic front, there are signs that Azerbaijani-Israeli relations are about to enter a qualitatively different stage. After the establishment of diplomatic relations between Azerbaijan and Israel in 1992, Israel opened its embassy in Baku, however, under the cautious leadership of Heydar Aliyev, weary of pressure from its southern neighbor and the Conference of Islamic States, Azerbaijani leadership has tarried in opening its embassy in Israel. This was an unresolved issue, clearly unsettling in relations between the two countries. Now, young Ilham Aliyev, who represents a new unambiguously Western-oriented generation of the post-Soviet leaders, has taken over. There seems to be movement in resolving of this thorny issue. In an interview with the press before leaving Moscow in February of 2004, Ilham Aliyev intimated that among the 20 new embassies, which Azerbaijani leadership intends to open, Israel will be on the priority list. It is up to Israel's government to follow this initiative and forge new alliances in a changed world paradigm, one that could become an important bridge in creating new allies for its new challenges.

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