Oil fuels more independent Azerbaijan

A railroad deal will soon link the ex-Soviet outpost to European markets.

By Daria Vaisman | Correspondent of The Christian Science Monitor

from the March 6, 2007 edition

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TBILISI, GEORGIA - Only recently, Azerbaijan was just another former-Soviet outpost with a Russia-sized chip on its shoulder. Today, it's aglow with the self-confidence that only an oil windfall can bring.

The recently completed Baku-Tbilisi-Ceyhan oil pipeline – stretching to Turkey via Georgia – has turned this country on the Caspian Sea, which gained independence in 1991, into one of the fastest-growing economies in the world with a GDP that leapt 32.5 percent last year.

And with oil revenues expected to top $100 billion in the next 10 years, Azerbaijan has been giving itself a makeover. As demands swell for space and resources, the national overhaul will include nine new bridges, a beltway that will loop around its capital, Baku, and a multimillion dollar water pipeline.

But the windfall has had another effect – it has given Azerbaijan unprecedented independence in dictating its own affairs, spearheading the kinds of linkage projects the West has promoted and funded in the Caucasus for a decade.

"Azerbaijan has been able to play a more independent role because of its oil wealth and, quite frankly, a very able political leadership," says Stephen Blank, professor of national security studies at the US Army War College Strategic Studies Institute. "That gives Azerbaijan a certain amount of leverage."

Others are concerned that Azerbaijan's newfound confidence will only exacerbate the country's dire record on corruption and human rights. "Many people think that the international community has turned a blind eye to Azerbaijan's worsening democratic practices because of commercial interests and its strategic advantage," says Baku-based International Crisis Group analyst Vugar Gojayev.

The presidents of Azerbaijan and Georgia met with Turkey's prime minister on Feb. 7 in Tbilisi to inaugurate an ambitious new project – a 160 mile, $420 million railroad linking the three countries and providing the shortest distance for commercial traffic between Europe and Central Asia. Construction should be complete by the end of 2008.

At the signing, Georgian President Mikhail Saakashvili called the railroad "a project that signals a geopolitical transformation in our region," using language that echoed that of the US in the early 1990s, when it first pushed the Baku- Tbilisi-Ceyhan pipeline to develop an energy corridor that bypassed Russia.

This time around, though, the US refused to finance the railroad unless neighboring Armenia, which has been in a 15-year standstill with Azerbaijan following a brutal war over contested territory, was allowed to take part.

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