BACKGROUND: Since the independence of Azerbaijan was restored in 1991, the political leadership of the country has followed a foreign policy course toward integration with Western political, economic and security institutions. This has particularly intensified since the terrorist attacks of September 11, 2001, after which Azerbaijan joined the U.S.-led international coalition against terrorism. and Azerbaijan has sent peacekeeping troops to both Afghanistan and Iraq. Military cooperation between the U.S. and Azerbaijan has significantly increased in the last few years, mainly due to U.S. assistance to Azerbaijan in the sphere of border security, maritime security and anti-terrorism. The increasing military cooperation between Washington and Baku and the recent visits of U.S. Secretary of Defense Donald Rumsfeld to Azerbaijan prompted many speculations that the U.S. was planning to establish military bases in Azerbaijan. The U.S. Government’s decision to relocate troops from Germany into Eastern Europe intensified these speculations even further. This could not go unnoticed by regional powers Iran and Russia, which traditionally oppose the American presence in the Caspian region. In the past year, Russia and Iran have used carrot-and-stick policies to push Azerbaijan towards rejecting the idea of American military bases on its soil. Iranian President Mohammad Khatami for the first time visited Baku in early September to warm up bilateral relations between the two countries, who have been lacking mutual trust since Azerbaijan’s independence. Lately, however, both Khatami and his foreign minister Kamal Kharrazi have used harsh rhetoric regarding U.S.-Azerbaijani relations. “We are against the military presence of foreign countries, particularly the U.S. in the Caspian basin. This presence cannot provide security, but on the contrary will destabilize the situation in the region,” said Kharrazi. Analysts believe these remarks are squarely aimed at Baku. Russia, on the other hand, has intensively used economic tools to increase its influence over Azerbaijan. In the past year, visits by the chairman of Russia\'s United Energy Systems (RAO UES) Anatoliy Chubays, Moscow mayor Yuri Luzhkov, Audit chamber head Sergey Stepashin and Minister of Transportation Igor Levitin to Azerbaijan raised speculations about Russia\'s intentions in the South Caucasian republic. Chubays has expressed Russia’s interest to participate in energy production and distribution projects in Azerbaijan and Levitin offered to restore the direct railway between Baku and Sochi and to intensify the activities of the North-South transport corridor. But at the same time, Russia following the Beslan tragedy closed its border with Azerbaijan, creating economic hardships for Azerbaijani entrepreneurs. Close to two million Azerbaijanis work in Russia and harsher immigration policies imposed by Moscow would significantly hurt their economic well-being.

IMPLICATIONS: One can not but link the activities of Moscow and Tehran to the possibility of American military bases in Azerbaijan. Iranian political scientists and policy-makers have been particularly concerned with this issue and have argued that American bases would threaten the national security of Iran. The Iranian worries might push its political leadership to more radical steps towards Azerbaijan, such as officially rather than covertly siding with Armenia on the Nagorno-Karabakh conflict. Iran is also likely to continue to push the negotiations over the legal status of the Caspian Sea into a deadlock until it is convinced that the Caspian basin is secure and free from “outsiders.” A less likely, but always possible scenario for Iran, is to spread Islamic radicalism in Azerbaijan, thus seeking to install a political regime that is favorable to the Iranian cause. Russia, on the other hand, has reacted to the increasing American military presence in Azerbaijan by attempting to increase its economic tools in the country. Local analysts immediately labeled the visits of Russia’s economic policy-makers as an attempt to increase Russia’s presence in Azerbaijan, more specifically increase control over the country’s energy and transport systems and thus be able to use this tool for political purposes in the future. Many explained this as a return favor of President Ilham Aliyev to President Putin for the support and strong endorsement that Putin showed to Aliyev during last year\'s presidential elections. Russia has traditionally used meddling in ethnic conflicts as a way to dominate the Caucasus, but it is clear that in the past few years Russia has been increasingly utilizing economic tools as well for the same purpose. Russia has stepped up efforts to purchase or rent economic facilities in the former Soviet republics and by doing so to own the economic and thus political base of these countries. Last year, Russia cemented deals with Armenia and Georgia on purchasing the two countries’ energy systems. Armenia has also given Russia several important industrial objects, thus further integrating the country\'s military industrial system into the Russian one. Similarly, in Latvia, Russia attempted to privatize a major oil refinery. The majority of Azerbaijanis still fear Russian intentions and believe they pose a major threat to the country\'s national security. The experience of the 1990s showed that Russia can well utilize economic, specifically energy tools for political purposes, as was the case in Georgia, Belarus, Ukraine and Armenia. Therefore, the Azerbaijani government will have to think twice before bending to the Russian pressures on this issue.

CONCLUSIONS: As much as Azerbaijan tries to pursue its “balanced foreign policy”, the political leadership of the country is often confronted with a difficult choice: to ally itself with the West or try not to anger regional powers Iran and Russia. The intensifying cooperation between the U.S. and Azerbaijan and the integration of official Baku into Euro-Atlantic security institutions have prompted Russia and Iran to pursue “carrot and stick” policies towards Baku to prevent the establishment of U.S. military bases in Azerbaijan. Diplomatic and economic channels have been utilized by Moscow and Tehran to pressure Baku. Yet, it will be in the interests of the national security of Azerbaijan if the political leadership realistically assesses these pressures before bending to them and relenting on its relations with Washington. In Baku’s eventual decision, the currently cold diplomatic attitude toward Azerbaijan on the part of the State Department and the U.S. political leadership – in contrast to the Pentagon’s positive approach – could become a determining factor.

AUTHOR’S BIO: Fariz Ismailzade is a freelance writer on Caucasus politics and economics. He holds a masters degree from the Washington University in St. Louis and is currently based in Baku.