The political and economic aspects of Russian-Azerbaijan relations was until now characterized by the absence of the Russian side's coordination of economic and other initiatives undertaken by various Russian departments in Azerbaijan. The thaw in Russian-Azerbaijani relations began after Vladimir Putin came to power. A breakthrough occurred a year ago with the official visit of Putin to Baku. The foundations for a sustainable development of the two countries relations in all spheres were laid then. The beginning of 2002 was marked by Azerbaijani President Heydar Aliyev's official visit to Moscow.

According to the Russian "ITAR-TASS" news agency, a meeting of presidents Aliyev and Putin took place in the evening of 24 January 2001. During this meeting, the heads of state touched upon many issue, including the strengthening of stability in the Caucasus and the Caspian region, and participation in the U.S.-led anti-terrorist campaign. The presidents discussed the possibility of holding a summit of the leaders of the Caucasian countries within the framework of the "Caucasian four" (Azerbaijan, Georgia, Russia and Armenia) and coordinating policy in the field of security and struggle against terrorists.

On January 25, there was an official reception in the Kremlin where the strengthening and development of bilateral relations in political, economic, military and cultural spheres were discussed. A package of interstate agreements were also signed, including an agreement on industrial cooperation; an agreement on information exchange in the field of struggle against breaches of tax legislation; an intergovernmental agreement on economic cooperation; and a treaty on the "long-term economic cooperation for the period of up to 2010".

One of the main issues was military-technical cooperation, according to the "Azertaj" news agency. According to the agreement on the status, principles and terms of exploitation of the Gabala Radar Station, this object got the status of an "information-analytical center", and officially became the property of Azerbaijan. But Azerbaijan agreed to rent the station's movable and immovable assets to Russia for 10 years. Russia will pay $7 million per year in rent. The total number of personnel brought up to strength by Russia must not exceed 1500 persons.

This Radar Station is located 350 km to the northwest from Baku, and is the only Russian military presence on the territory of Azerbaijan. It operates since 1985 and was designed to track launches of intercontinental ballistic missiles in Southern Hemisphere.

The Russian side also undertook obligations to the effect that the Radar Station's activity will not be directed directly or indirectly against the sovereignty or interests of Azerbaijan's security. According to the agreement, Azerbaijani anti-aircraft divisions will provide anti-aircraft protection for the station. Russia promised Azerbaijan to render support in the modernization, re-equipment and utilization of arms and military equipment available in the Azerbaijani army.

Russia's participation in the Baku-Tbilisi-Ceyhan Main Export Pipeline project was also discussed among other economic issues. Russian sources confirmed the recent information regarding Russia's intention to join this project. From the Russian side, the two oil companies Lukoil and Ukos are interested in joining this project.

According to some political experts in Baku, Russia’s decision to support Baku-Ceyhan implies a level of unprecedented political and economic support for Baku. As economic expert Gubad Ibadoglu noted, by supporting the Baku-Ceyhan project, Russia logically becomes the closest partner of Azerbaijan in the disputed issue of the Caspian Sea’s status. These decisions will have important positive political consequences for Azerbaijan, according to Ibadoglu.

During the Moscow negotiations, issues of economic cooperation and coordination of activities on the international scene were also discussed. President Putin named energy and agriculture as priority spheres of economic cooperation between the two countries.

In the Caspian issue, both sides confirmed the closeness of their positions and their intention to determine the legal status of the Caspian sea in the nearest future on the basis of a consensus between all Caspian countries. In a joint statement, the two sides expressed their intention to encourage the strengthening of good-neighborly relations and mutual understanding between them on the bilateral and multilateral basis in every possible way. Great importance was attached to the upcoming summit of the heads of the five Caspian countries scheduled to take place in Turkmenistan.

According to Space TV, the heads of the two countries expressed their readiness to contribute to the settling of regional conflicts in the Caucasus on the basis of international law, and first of all, the territorial integrity and inviolability of internationally recognized borders. The presidents of the two countries talked of faster resolution of the Nagorno Karabakh conflict, based on relevant resolutions of the UN Security Council and decisions of the OSCE.

For his part, President Heydar Aliyev stressed the fact that the settlement of this conflict was of vital importance for Azerbaijan and the entire Caucasus, and very important for the whole of Europe. He noted that Azerbaijani society believes Russia can play an "important, decisive" role in this conflict. 

After returning to Azerbaijan, Aliyev expressed satisfaction with the results of the visit. “Today we have friendly relations between Russia and Azerbaijan, which have nature of strategic partnership”, according to Aliyev.

However, some independent experts think that interstate relations will not undergo serious changes even though the visit was successful. Accordingly, there will most likely be no change in Moscow's position. Significant changes in Azerbaijan-Russia relations should not be expected.

Gulnara Ismailova