Russian President Vladimir Putin at the G-8 summit effectively encouraged the United States and its NATO allies to relocate the core of their missile defense architecture from East-Central Europe to the Caucasus region, specifically Azerbaijan’s Gabala radio station. The realization of Putin’s proposal would bring Russia considerable strategic benefits in the region and elsewhere. It is less clear, however, that Azerbaijan and it neighbors would derive equal advantages from its implementation. In particular, Azerbaijan would risk its improving relations with Iran.

BACKGROUND: On June 7, Putin surprised his fellow heads of state at the G-8 summit by proposing that the United States use the Gabala radar station in the northwest of the country, as its main European-based radar for its national ballistic missile defense (BMD) system. In addition, Putin argued that the missile interceptors originally intended for Poland should now be placed in Iraq, Turkey, or on Aegis-equipped warships or even floating platforms in the Caspian Sea. The suggestion followed months of escalating disagreements over U.S. plans to deploy a BMD radar in the Czech Republic and 10 interceptor missiles in Poland.

The Gabala radar facility began operating in the 1980s. Its original purpose was to enable the Soviet military to detect ballistic and some cruise missiles launched from the Southern Hemisphere. These included launches from Asian and African countries as well as from U.S. strategic missile-launching submarines operating in the Indian Ocean. With a range of 6,000 kilometers, the radar can monitor India, Iran, Iraq, Pakistan, Turkey, and parts of China and Africa.

Following the USSR’s dissolution, the issue of continued Russian military use of the radar, whose territory now belonged to an independent and sovereign country of Azerbaijan, became contentious. Though the Russian armed forces continued to operate the facility, the Yeltsin administration pressed Azerbaijan to agree to a long-term leasing arrangement that would regularize continued Russian military access to the complex. As leverage, Russian negotiators threatened to curtail cheap energy exports to Azerbaijan or restrict the activities of the approximately two million Azerbaijani nationals working in Russia. Many of them remit a substantial share of their earnings to family members in Azerbaijan, a process which helps sustain the Azerbaijani economy.

Despite these considerations, the protracted negotiations did not result in a deal until 2001. The lease signed the following year granted Russia access for a 10-year period at an annual payment of $7-14 million. About 900 Russian troops belonging to the Federal Space Forces work at the complex.

IMPLICATIONS: Azerbaijani officials have indicated their willingness to engage in bilateral or trilateral talks with their Russian and American counterparts over the possible joint use of the Gabala radar station. At a June 8 press briefing in Baku, Foreign Minister Elmar Mammadyarov said that Azerbaijan appreciated that jointly operating Gabala as an anti-ballistic missile radar station could bring “greater stability and predictability in the region.”

Russians officials claim that they discussed their proposal with the Azerbaijani government on several occasions well in advance of the announcement. At the G-8 summit, Putin said he had discussed the issue directly with Azerbaijani President Ilham Aliyev. In Baku, Deputy Foreign Minister Araz Azimov stated the proposal had also been reviewed during a May 21-22 visit to Azerbaijan by Russian Foreign Minister Sergei Lavrov.

In contrast, before Putin’s G-8 statements, the American and Azerbaijani dialogue on the issue had, in Mammadyarov’s words, been “rudimentary.” In any case, at his June 8 Baku press conference, the Foreign Minister made a point of reminding his listeners that, “It is not possible to undertake any actions without us,” implying his lack of confidence that Moscow and Washington would in the end take into account Azerbaijan’s peculiar interests. His remarks also laid down a marker that his government would be just as insistent as their Czech and Polish counterparts in upholding their rights as a potential host nation for such a controversial program.

In an interview with the Russian state television channel Rossiya that Aliyev subsequently gave while attending an economic conference in St. Petersburg, the Azerbaijani president cautiously remarked that Putin’s proposal “will become a new element of our cooperation with both Russia and the United States.” He warned, however, against any Russian-American attempt to reach a deal without involving the host nation: “If this project has a future, then detailed consultations are needed both bilaterally and possibly also trilaterally, with the participation of Russia, the U.S. and Azerbaijan.”

Many Azerbaijanis hope to leverage the base to gain support in their dispute with Armenia over Nagorno-Karabakh. The chairman of the opposition Democratic Party declared that hosting a joint Russian-American military base “could lead to the coordination of Russian and U.S. positions on other Azerbaijan-related issues, for example the Nagorno-Karabakh settlement.” When asked about Putin’s proposal, Armenian Foreign Ministry spokesperson Vladimir Karapetian said that Russia and the United States need to “take into account the balance of power in the region before making such a decision.”

Putin said his proposal was unlikely to harm Russian-Iranian relations “because this radar has been operational for quite some time.” Putin did not say anything about relations between Iran and Azerbaijan, which have been troubled since Baku gained independence in 1991. The large ethnic Azerbaijani minority in Iran has been a point of contention, and during the Nagorno-Karabakh conflict, the Iranian government supported Armenia with economic and other assistance. Tensions also arose regarding the division of rights to the Caspian Sea, as in 2001, Tehran dispatched military ships and aircraft to threaten two Azerbaijani research vessels exploring oilfields in the southern Caspian.

These ethnic, territorial, and other tensions have become less visible in recent years. In 2004, the two countries’ defense ministers signed a bilateral non-aggression pact. Azerbaijani officials subsequently cited the pact as excluding their participation in any collective military operation against Iran. Although Azerbaijani officials have allowed U.S. warplanes to traverse their airspace for activities related to the global war on terrorism, they have insisted they would not allow foreign countries to use their territory for military operations against their neighbors.

An Azerbaijani decision to grant the U.S. armed forces indefinite access to a military facility whose declared purpose is to help counter an Iranian missile threat to Europe and the United States, which Iranian officials emphatically deny they are developing, could worsen Azerbaijani-Iranian ties dramatically. Iranian state radio commented that the Russian proposal could have “serious regional implications in the domain of security.” Kazem Jalali, a member of the Iranian parliament and rapporteur of the Majlis National Security and Foreign Policy Committee, complained that the Russian government should not treat Iran as a “tool” for resolving great power disputes.

If Iran retaliated by imposing economic sanctions against Azerbaijan, many residents of southern Azerbaijan would suffer from the loss of commerce. The Nakhichevan Autonomous Republic, a landlocked Azerbaijani exclave whose borders with Armenia remain sealed, is especially vulnerable since it derives all its electricity and gas from Iran. Azerbaijan is also vulnerable to more violent forms of retaliation from Tehran, including air strikes and terrorist acts, though Iran would presumably not run the risk of provoking a U.S., NATO, and possibly even Russian military response from an overt use of force.

CONCLUSION: Presidents Bush and Putin plan to discuss the matter in more detail during July 1-2 at the Bush family summer home in Kennebunkport, Maine. The U.S. and Azerbaijani governments will likely address the issue formally at the next session of their bilateral security consultations, scheduled to be held in Washington on July 9-10. The Azerbaijani officials will likely have an opportunity to hear the Iranian government’s reaction when President Mahmoud Ahmadinejad visits Baku in late June.

Many Azerbaijani national security experts see the Putin proposal as a tremendous strategic opportunity for their country. They overlook the fact that, besides further complicating their relations with Armenia and Georgia, the multilateral arrangement proposed by Moscow would lock in a Russian military presence in Azerbaijan for a long time, since now the Americans could see Russian participation as essential for legitimizing their own use of the facility.

AUTHOR’S BIO: Richard Weitz is Senior Fellow and Director for Project Management at the Hudson Institute.