In April the foreign policy agenda of Azerbaijan was dominated by the first formal meeting between Aliyev and Pashinyan in Vienna. In spite of happening in a positive and constructive environment, this meeting is considered inconclusive with no tangible results. Besides, President Aliyev attended the Second International Forum “One Belt, One Road” in China and held meetings with Putin and Jinping. In early April, the International Monetary Fund published a report with projections of different economic indicators of Azerbaijan for 2019 and 2020. The domestic policy agenda was fairly stable.
The domestic policy agenda was fairly stable for Azerbaijan during April. The country is currently hosting Formula One Grand-Prix for the fourth time. In spite of its economic benefits including money and tourist flood to the country, according to the local poles, inhabitants of Baku do not feel happy about the Grand Prix because of the closure of roads, traffic jams and other difficulties for daily living.
Economic Outlook from IMF
According to the World Economic Outlook report published by the International Monetary Fund in April, Azerbaijan’s economy is expected to increase by 3.4%. Next year’s growth is forecasted to be 3.1%. Compared to the economies of other countries in the Commonwealth of Independent States, Azerbaijan exceeds the average growth of 2.2% and falls behind only Turkmenistan and Uzbekistan whose economies are projected to accelerate 6.3% and 5% respectively. According to the report, the main source of export earnings will keep coming from fuel products. The report illustrates that Azerbaijan, Russia and Kazakhstan are the three CIS countries where the current account surplus is expected. The current account surplus is forecasted to be 11.7% and 13.3% of GDP in 2019 and 2020 respectively.
Meanwhile, the Center for Economic and Social Development in Azerbaijan published main economic figures for the first three months of 2019. The report shows that half of GDP growth comes from the non-oil sector. The inflation rate for the first quarter was 6.4%, although government reports indicated 2.1%.
Meetings over “One Belt, One Road”
In late April President Aliyev paid a working visit to Beijing upon the invitation to participate in the Second International Forum “One Belt, One Road”. This forum brought representatives of 37 countries and members of international organizations together. The Belt and Road initiative is listed as one of the largest projects in history covering half of the world’s population and addressing the infrastructure gap through connecting Asia, Africa and Europe.
During the forum, two important meetings were held with Vladimir Putin and Xi Jinping. In his meeting with Putin, Aliyev talked about the importance of transportation and logistics sector in the dynamic development of cooperation between Azerbaijan and Russia. He emphasized the trade growth of 14% for the last year between the two nations.
In his meeting with Aliyev, Xi Jinping praised the active participation of Azerbaijan in the implementation of the “One Belt, One Road” project and expressed his hopes about mutually beneficial cooperation in the future.
During the forum, several agreements were signed including the agreement between Azerbaijan’s main internet provider AzerTelecom and China Telecom for the creation of telecommunications corridor and other strategic partnership agreements between transportation, electrical engineering and technology companies of the two countries.
Positive, yet inconclusive meeting
The main topic for discussions during April was the first official one-on-one meeting of Azerbaijani President Ilham Aliyev and Armenian Prime Minister Nikol Pahinyan on March 29 in Vienna. Leaders had previously met in unofficial settings such as the World Economic Forum in Davos, CIS summits in Dushanbe and St. Petersburg. The two-hour private discussion between two leaders was followed by a consultation with OSCE Minsk Group diplomats and Foreign Ministers of the countries. Aliyev and Pashinyan exchanged their views about the settlement process, ceasefire and direct communication channels. One of the key topics of the meeting agenda was changing the format of the negotiation process. Pashinyan made his position clear when he responded to the statement issued by OSCE Minsk Group co-chairs in early March saying that “The fact is that today at the negotiating table there is no legitimate authorized representative of Artsakh … I have repeatedly said that the Prime Minister of Armenia does not have such powers”. However, Aliyev did not agree to invite Nagorno-Karabakh regime to the table and since negotiation format cannot be changed without consent from both sides, the format of the negotiations remained unchanged. In his interview, Aliyev noted that “The important thing is that the format of the negotiations remains unchanged, the negotiations are being conducted between Armenia and Azerbaijan, as it has been for many years”.
The Vienna meeting is considered to be the first round of the highest level settlement talks. Although there was no media statement after the meeting, the leaders commented about the discussion on various occasions. In his meeting with the Armenian community in Austria, Pashinyan stated that the meeting was not “a breakthrough”; however, the launch of official talks will enable Armenia to raise voice about its agenda and notions.
In their announcement, OSCE Minsk Group co-chairs stated that “… the leaders recommitted to strengthening the ceasefire and improving the mechanism for direct communication. They also agreed to develop a number of measures in the humanitarian field”. Azerbaijani President also stressed the importance of humanitarian actions in order to support the settlement process. Stefan Visconti, the OSCE Minsk Group co-chair from France called the discussion “long, meaningful and effective”.
Overall, the environment of the first official meeting between Aliyev and Pashinyan was positive and constructive and we may see tangible steps in the humanitarian field in the short term. However, the statement of “new war for new territories” formula by Armenian Defense Minister David Tonoyan and the response of Azerbaijan Foreign Ministry saying that “…the Armed Forces of the Republic of Azerbaijan are among the most powerful armies in the world and are able to liberate the occupied territories of Azerbaijan” show that both sides still perform diplomatic power games. Thus, a full-scale settlement over Nagorno-Karabakh is not expected in the near future.