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Beyond Countering Iran: A PoliticalEconomy of Azerbaijan-Israel RelationsOğuzhan GökselPublished online: 29 May 2015.

To cite this article: Oğuzhan Göksel (2015) Beyond Countering Iran: A Political Economy ofAzerbaijan-Israel Relations, British Journal of Middle Eastern Studies, 42:4, 655-675, DOI:10.1080/13530194.2015.1048973

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Beyond Countering Iran: A PoliticalEconomy of Azerbaijan-IsraelRelationsOGUZHAN GOKSEL*

ABSTRACT In recent years, Azerbaijan–Israel relations have come to theforeground of politics in the Middle East and Caucasus region. Ties between Bakuand Tel Aviv have been directly interlinked with their relations with Iran. Thenature of the Azerbaijan–Israel partnership must be analysed in order tocomprehend the balance of powers and energy security in the region. Even thoughthere have been a number of works analysing the relationship by focusing on itsrole in regional military security, there is a gap in the discourse in terms ofunderstanding the economic drivers of relations and the implications of the ties forregional energy security. Particular attention will be given to discussingAzerbaijan’s emerging role as a major energy producer that has already made aprofound impact on the region as an ‘alternative’ to Iran in the aftermath of therecently imposed sanctions on Tehran’s energy exports. It will be argued that theAzerbaijan–Israel relationship is built on solid economic grounds and it would bereasonable to expect the strength of the ties to be further intensified in the future.The article will also demonstrate that new developments in the energy security ofthe wider Middle Eastern region will affect the evolution of Azerbaijan–Israel tiesand their rivalry with Iran in the next decade.

Introduction

In recent years, Azerbaijan–Israel relations have become a highly critical issueshaping the geopolitics of the Middle East and the Caucasus region. Since theirinception in the early 1990s, ties between Baku and Tel Aviv have been directlyinterlinked with their relations with Iran. 2012, in particular, was an unusual yearin terms of rising tensions between the two neighbours, Iran and Azerbaijan. Eventhough the relations had been uneasy ever since Azerbaijan’s independence in1991, international sanctions against Iran and expectations of an imminent Israeliattack on Iran’s nuclear facilities pushed both Iran and Azerbaijan towards moreaggressive stances, as demonstrated in the occasional closure of borders andincreased naval and air force presences in the shared Caspian Sea.1 Throughout2012, observers also witnessed an increase in the intensity of the long-standing

*Department of Political Science and International Relations, Istanbul 29 Mayis University, AltunizadeMahallesi, Icadiye Baglarbasi Cd. No. 40, 34662 Uskudar, Istanbul, Turkey. Email: ogoksel@29mayis.edu.tr1. Gallia Lindenstrauss and Iftah Celniker, ‘Azerbaijan and Iran: Mutual Hostility but Limited Rivalry’, INSSInsight, 366 (26 August 2012).

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Vol. 42, No. 4, 655–675, http://dx.doi.org/10.1080/13530194.2015.1048973

q 2015 British Society for Middle Eastern Studies

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cooperation between Azerbaijan and Israel, particularly with the signing of a $1.6billion deal resulting in Azerbaijan acquiring unmanned aerial vehicles (UAVs)and high-tech satellite systems.2 In the event, numerous news agencies reportedthat Azerbaijan granted Israel the rights to use eight airbases in Azerbaijaniterritory, an incident that has caused extreme concern in Tehran due to thepossibility of the Israeli air force using these bases in a future military engagementwith Iran.3 However, it is important to note that there seems to be no substantialevidence for these claims, only denials from state officials in Israel andAzerbaijan. It has been argued that even if the claims are unfounded, thesubsequent heated discussions may serve to bring Israel and Azerbaijan evencloser as an aggressive Iran reacted by threatening to retaliate and in the possibilityof an operation against Iran to hit the allies of Israel first, a statement interpreted aspointing to Azerbaijan.4

As summarized above, Azerbaijan–Israel relations have come to theforeground of politics in the Middle East and Caucasus region. Even thoughthere have been a number of works analysing these relations by focusing on theirimplications for regional security, there is a gap in the scholarly literature in termsof studying the economic aspect of bilateral ties. Two decades of relations betweenAzerbaijan and Israel have proved that the ties have strong pragmatic roots, asdespite the rapidly changing geopolitical conditions of the region, ties between TelAviv and Baku have evolved and become firmer than ever, a development thatdemands attention and re-evaluation of the reasons behind the alliance. Especiallyin light of the growing tensions between the Israel–Azerbaijan partnership andIran, there is an urgent need for a new analysis that would shed light on this keyrelationship which has the potential to reshape the political and economic balancesof power in the region. Throughout this article, particular attention will be given todiscussing Azerbaijan’s emerging role as a major energy producer that couldarguably have a profound impact on the region as an ‘alternative’ to Iran in theaftermath of the recently imposed sanctions on Tehran’s energy exports. Thearticle will also assess the role of Turkey’s Mediterranean Ceyhan port incomparison with Iranian energy exports through the Persian Gulf and discusswhether exports of Azerbaijani energy through Ceyhan port could potentiallyreduce Iran’s impact on the world economy by partially replacing it as the newenergy hub. The article will demonstrate that new developments in the energysecurity of the wider Middle Eastern region will affect the evolution ofAzerbaijan–Israel ties and their rivalry with Iran in the next decade.When first contact was established in 1992, no one could have foreseen how

Azerbaijan–Israel relations would quickly develop into a strong strategicpartnership that today includes intense cooperation in intelligence and economy.Clearly, the rapid development of Azerbaijan–Israel relations into a partnershipwithin a very short period of time can only be explained by the existence of strong

2. Lindenstrauss and Celniker, ‘Azerbaijan and Iran’.3. See, for instance, Zaur Shiriyev, ‘Azerbaijan–Israel: Firm Alliance (2)’, Today’s Zaman http://www.todayszaman.com/columnist/zaur-shiriyev/azerbaijan-israel-firm-alliance-2_277829.html, 18 April 2012; ‘DoIsraeli–Azeri Ties Portend Conflict with Iran?’, NPR, 1 April 2012, http://www.npr.org/2012/04/01/149761957/do-israeli-azeri-ties-portend-conflict-with-iran (accessed 22 November 2012); Alexander Jackson, ‘LookingForward to 2009 in the Caucasus and Beyond Part I’, CRIA—Caucasus Update, 16 (5 January 2009), http://cria-online.org/CU_-_file_-_article_-_sid_-_103.html (accessed 10 October 2012).4. Phoebe Greenwood, ‘Israel and Azerbaijan: Unlikely Allies?’, The Guardian, 29 March 2012, http://www.guardian.co.uk/world/blog/2012/mar/29/israel-azerbaijan-unlikely-allies (accessed 3 November 2012).

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interests on both sides. The rationale behind the partnership is typically attributedto national security issues, such as the threat of Iran, but another strong driver ofrelations is often overlooked, namely the inter-dependence of Azerbaijanand Israel. The economic inter-dependency is based on the different needs ofthe two countries, which conveniently match each other. Israel’s interest is focusedon importing oil and natural gas from Azerbaijan, while Azerbaijan has aimed toachieve the transfer of military, industrial and agricultural technology andexpertise from Israel in addition to directly buying high-tech military equipment tobuild a strong, modern Azerbaijani army that could tip the balance in Baku’s favourin its long conflict with Armenia. It is the main objective of this study to uncoverthe rationale behind the Azerbaijan–Israel partnership, with a particular focus oneconomic factors. Economic interests have played a key role in the formation andevolution of relations; in the early 1990s, the number of Israeli entrepreneursoperating in Azerbaijan was already over several hundred.5

This article acknowledges the critical role played by the perception of Iran as athreat to the national security of both Azerbaijan and Israel and there have beennumerous studies focusing on this aspect of ties from the perspective of the realistschool of international relations.6 In light of this, there does not seem to be any need toadd onemore work to a growing pile of studies with a particular focus on the securityaspect. Instead, the focus of this article is on economic drivers of relations as fewerworks have dealt with this issue in detail, although there have been illuminatingstudies that specialized in energy relations between Azerbaijan and Israel.7 Thisstudy takes a broader focus, covering energy but not being limited to this issue;other key exchange areas such as weaponry, agriculture and intelligence-sharingwillalso be analysed. Furthermore, equal attention will be given to the perspectives ofboth countries as the full meaning of the relations can only be uncovered byunderstanding how both Azerbaijan and Israel perceive the bilateral ties.Firstly, the article will briefly look at the historical background and

characteristics of the relations. Then, the article will focus on the existingliterature on Azerbaijan–Israel relations and re-evaluate the factors that have beensuggested as the main drivers of the partnership in order to reveal what hasactually formed the basis of the ties. Afterwards, the role of Iran in the partnershipwill be analysed, as this article also argues that the security aspect is a key pillar ofAzerbaijan–Israel ties, albeit an overstated one. Finally, the article will focus onthe economic drivers of the relationship, such as energy, technology transfers andarms deals, which have made the most impact on the evolution of thepartnership. As will be shown, even though the relationship with Israel causes aconsiderable security threat for Azerbaijan, this article argues that the economicbenefits of ties with Tel Aviv far outweigh the negative consequences emanatingfrom the hostility of Iran. It is argued that the Azerbaijan–Israel relationship is

5. Sule Kut, ‘Yeni Turk Cumhuriyetlerinin Dis Politikalari’ [Foreign Policies of the New Turkic Republics], inBusra Ersanli Behar (ed.), Bagimsizligin Ilk Yillari [First Years of Independence] (Ankara: Ministry of CulturePublications, 1994), pp. 253–254.6. See, for instance, Alexander Murinson, ‘Azerbaijani–Jewish Relations: Realpolitik Embedded in History’,The Caucasus & Globalization—Journal of Social and Economic Studies, 2(2) (2008), pp. 157–168; AhmetDavutoglu, ‘Yahudi Meselesinin Tarihi Donusumu ve Israil’in Yeni Stratejisi [The Historical Transformation ofthe Jewish Question and the New Israeli Strategy]’, Avrasya Dosyasi, 1(3) (1994), pp. 87–99; Philip Robins, ‘TheMiddle East and Central Asia’, in Peter Ferdinand (ed.), The New Central Asia and Its Neighbours (London:Royal Institute, 1994), pp. 55–74.7. See, for instance, Alexander Murinson, ‘Azerbaijan–Turkey–Israel Relations: The Energy Factor’, MiddleEast Review of International Affairs, 12(3) (2008), pp. 47–64.

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built on solid economic grounds and it would be reasonable to expect the strengthof the ties to be further intensified in the future.

Historical Background and Characteristics of Azerbaijan–Israel Relations

Initially, in the early 1990s, Azerbaijan–Israel relations were formed withTurkey’s assistance as Ankara had established close ties with both countries.8 Inother words, Israel’s tactical alliance with Turkey in the 1990s enabled Tel Aviv toestablish stable relations with Azerbaijan. As we had witnessed over the lastdecade, even though the Turkish–Israeli alliance had deteriorated and collapsed,ties between Israel and Azerbaijan had strengthened and matured into a strategicpartnership, autonomous from ‘the Ankara connection’, and proved highlyresilient as well. The Azerbaijan–Israel partnership has successfully survived theTurkish–Israeli crisis since 2007, so it is clear that there are strong pragmaticdrivers that bind Baku and Tel Aviv.From the beginning, Iran has been wary of this emerging tie, as demonstrated in

the Iranian media’s continuous critique of Turkey and Azerbaijan throughout the1990s as Muslim nations forming ties with Israel, perceived in Iran as the ‘arch-enemy of the Muslim world’.9 Azerbaijan is the third predominantly Muslimcountry that has formed strategic and economic relations with Israel after Turkeyand Egypt. Yet despite the highly advanced level of bilateral relations, it isimportant to note that Azerbaijan still has no ‘official’ diplomatic relations withIsrael; there is no Azerbaijani consulate or embassy in Israel even though Israelofficially opened its embassy in Baku in February 1993.The absence of Azerbaijan’s diplomatic representatives had been explained in

terms of Baku’s unwillingness to overtly antagonize Iran and jeopardize itsmembership of international Muslim organizations such as the Organization ofIslamic Cooperation.10 However, it is known that Azerbaijan is unofficiallyrepresented by the state-owned AZAL (Azerbaijan National Airlines) and thebureau of the Lider television channel as these organizations have been reported tobe serving as de facto agents of Azerbaijani foreign policy in Israel.11 High-levelofficial visits between Azerbaijan and Israel have been common, as demonstratedby the visit of Israeli president Shimon Peres to Baku in 2009, which signalled theimportance of the ties for Baku and Tel Aviv. This visit and the Baku regime’sallegedly clandestine strong ties with Israel have triggered a strong reaction fromIran and pro-Iranian groups within the country, as the Azerbaijani government hasbeen accused of employing a ‘double discourse’, referring to the dramaticdifference between the ostensibly weak diplomatic relations and the reality behind‘closed doors’.12 Even the president of Azerbaijan, Ilham Aliyev, was quoted in a

8. Bulent Aras, ‘Post-Cold War Realities: Israel’s Strategy in Azerbaijan and Central Asia’,Middle East Policy,5(4) (1998), p. 70.9. Henri J. Barkey, ‘Iran and Turkey’, in Alvin Z. Rubenstein and Oles M. Smolansky (eds.), Regional PowerRivalries in the New Eurasia: Russia, Turkey and Iran (Armonk: M.E. Sharpe, 1995), p. 155.10. Shamkhal Abilov, ‘The Azerbaijan–Israel Relations: A Non-Diplomatic, But Strategic Partnership’,USAK, 4(8) (2009), p. 151.11. Abilov, ‘The Azerbaijan–Israel Relations’.12. Zaur Shiriyev, ‘Azerbaijan–Israel: Firm Alliance (1)’, Today’s Zaman, 17 April 2012, http://www.todayszaman.com/columnistDetail_getNewsById.action?newsId¼277748 (accessed 22 November 2012); FarizIsmailzade, ‘Azerbaijan’s Independent Foreign Policy Strengthened by Recent High Profile Meetings’, EurasiaDaily Monitor, 6(162) (2009) http://www.jamestown.org/single/?tx_ttnews%5Btt_news%5D¼35450&no_cache¼1#.VVnU8fntlBc.

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leaked diplomatic cable as defining the Azerbaijan–Israel relationship as an‘iceberg, nine-tenths of it below the surface’.13 Despite Baku’s efforts to keep thestrong ties hidden, however, the strategic partnership between Azerbaijan andIsrael is now common knowledge. It is clear that due to the ongoing hostilitybetween Israel and Iran, a regional powerhouse and Azerbaijan’s southernneighbour, having a strategic partnership with Tel Aviv is a potential risk forBaku. It is hoped that this article will contribute to the ongoing discussions on theissue and reveal the reasons that drive Azerbaijan to form a strong partnership withIsrael at the expense of Iran, with all the security risks involved.

What Drives the Azerbaijan–Israel Partnership?

Within the existing literature, security is widely referred to as one of the mostinfluential factors that have shaped Azerbaijan–Israel relations.14 This is areasonable argument as both states have experienced an acute problem of nationalsecurity since their independence, Israel since 1948 and Azerbaijan since 1991.The ongoing Arab–Israeli conflict and the unresolved Nagorno-Karabakh issuecontinue to shape the national security policies of Israel and Azerbaijanrespectively. The sense of insecurity has been diagnosed as very high in bothsocieties, leading to the argument that the foreign policies of Israel and Azerbaijanare extensions of their national security policies.15 In this context, Bourtmanargues that both countries share an ‘insecurity complex’,16 the sense of beingbesieged by neighbours that potentially endangers the existence of these states.It has also been argued that the pro-active Israeli foreign policy in the post-

Soviet Caucasus region, particularly Israel’s interest in Azerbaijan, resembles theearlier Israeli foreign policy based on the ‘periphery strategy’ in the 1950s and1960s.17 Following this doctrine since the first Arab–Israeli war in 1948, Israelhad actively sought to form alliances with non-Arab nations located on thegeographic edges of the Middle East region, such as Turkey, Iran and Ethiopia.By forming strong ties with non-Arab nations, Israel could gain the essentialregional support it desperately needed, having been encircled by hostile Arabcountries such as Syria, Jordan, Egypt and Saudi Arabia. It is important to note thateven today Israel is still de jure at war with Syria, Lebanon and the Hamas-controlled Gaza Strip, because unlike the treaty with Egypt signed in 1979, Israelhas never signed a peace treaty with these countries and organizations. It is clearthat Israel’s concern for its national security, caused by the unresolved Arab–Israeli conflict, still dictates its foreign policy. Akin to the case of Israel and itsArab neighbours, Armenia and Azerbaijan have also never signed an official peacetreaty following the Armenian invasion of the Karabakh region, a territory that dejure belongs to Azerbaijan but has been under Armenia’s de facto control for

13. ‘Odd But Useful Allies’, The Economist, 21 January 2012, http://www.economist.com/node/21543201(accessed 29 October 2012).14. See, for instance, Robert N. Marcus, Azerbaijan and Israel: Oil, Islam and Strawberries (The FletcherSchool, Tufts University, Medford, MA 2009), pp. 11–13; Michael B. Bishku, ‘The South Caucasus Republicsand Israel’, Middle Eastern Studies, 45(2) (2009), pp. 295–314; Aras, ‘Post-Cold War Realities’, p. 68; IlyaBourtman, ‘Israel and Azerbaijan’s Furtive Embrace’, Middle East Quarterly, Summer (2006), pp. 47–57.15. Bourtman, ‘Israel and Azerbaijan’s Furtive Embrace’.16. Bourtman, ‘Israel and Azerbaijan’s Furtive Embrace’.17. Aras, ‘Post-Cold War Realities’, p. 68.

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almost two decades. Following this line of thought, Bishku emphasizes the‘garrison state’ concept as a common characteristic of Azerbaijan and Israel.18

Another widely referred to factor that has been said to contribute to theformation of Israel–Azerbaijan ties is the influence of the Jewish community inAzerbaijan.19 This argument implies that the Jewish minority has played the roleof a ‘lobby’ in Azerbaijani foreign policy-making akin to the influence of Jewishnon-governmental organizations on policy-making in the USA. This is not a factorthat this article will focus on, as the role played by the Azerbaijani Jewish minorityin forming the Israel–Azerbaijan partnership has been highly overstated. Thisarticle acknowledges that minority groups can be highly influential in policy-making through lobbying, and that there is a significant Jewish community inAzerbaijan. The Azerbaijani Jewish community has been living with TurkicAzeris for centuries in a pluralistic, mutually tolerant environment. However,there is no evidence demonstrating that the Jewish minority has played any role inBaku’s foreign policy-making. Furthermore, even though minorities can playinfluential roles in fostering cultural ties between countries, once pragmaticinterests such as strategic and economic calculations disappear, it is doubtful thatthese communities would be able to sustain strong political ties between states.A noteworthy example in this context could be Turkey and its Jewish

community. The Turkish state and the Jewish minority have had a long andcomplex relationship, dating back to the late fifteenth century; in 1492, theOttoman Sultan Bayezid II had initiated an effort to rescue the Sephardic Jewishcommunity from the repression and extermination they were facing in Spain.Since that time, the Jewish community has had a strong presence in Turkey,particularly in trade and finance centred around the old imperial capital Istanbuland other important trade centres such as the Mediterranean port-city Izmir.However, it is worth recalling that even the strong economic position andinfluence of the Jewish community could not prevent the rapid deterioration ofTurkey–Israel relations and the collapse of the strategic partnership in the lastdecade, particularly after 2007. Thus, even though the influence of the AzerbaijaniJewish community has been a common theme in the literature on Azerbaijan–Israel relations, this article does not consider this factor to be as significant as otherdrivers of ties such as security and economy concerns.Another popular reason mentioned by observers who have analysed

Azerbaijan–Israel relations is the so-called ‘containment of Islam’ policyallegedly shared by both countries as a security policy objective.20 Reynolds putsemphasis on Israel and Azerbaijan sharing the ‘same world view’, referring to thesecular state establishment of Azerbaijan that overtly rejects shari’a law andIslamism.21 In this context, it is important to note that imprisonment of clericssupporting close relations with Islamist Iran at the expense of Israel is a commonfeature of politics in the country.22 Also, there have been various demonstrationsorganized mainly by Islamist groups in the country, demanding that the Baku

18. Bishku, ‘The South Caucasus Republics and Israel’.19. See, for instance, Marcus, Azerbaijan and Israel, p. 14; Abilov, ‘The Azerbaijan–Israel Relations’, p. 147;Saffron Inga, ‘The Mountain Jews of Guba’, The Philadelphia Inquirer, 12 July 1997.20. See, for instance, Aras, ‘Post-Cold War Realities’; James Reynolds, ‘Why Azerbaijan is Closer to Israel thanIran’, BBC News, 12 August 2012, http://www.bbc.co.uk/news/world-europe-19063885 (accessed 25 October2012).21. Reynolds, ‘Why Azerbaijan is Closer to Israel than Iran’.22. Reynolds, ‘Why Azerbaijan is Closer to Israel than Iran’.

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administration cut ties with Israel, but these movements have remained ratherlimited to religiously conservative areas such as the Nardaran village near Bakuand the Azerbaijani government has successfully contained their influence.23 Afterall, the authoritarian nature of the Baku government provides the Azeri policy-makers with a large degree of autonomy from the citizenry, so it can be argued thatpublic opinion has a very limited influence on foreign policy-making inAzerbaijan.Aras explains Israel’s sudden interest in Azerbaijan and Central Asia in the era

following the disintegration of the Soviet Union by pointing to Israel’s desire toprevent these predominantly Muslim societies from ‘falling under the influence’ ofpro-Arab Islamist administrations.24 In the case of Azerbaijan, however, it can beargued that this argument is not applicable since Azerbaijan lacks religious andcultural affinity to Sunni Arab nations of the Middle East. It is important to notethat there has been radical Islamist activity in Azerbaijan but these groups lack astrong base within the local population. There is substantial evidence pointing toIran’s covert operations in promoting radical Shi’a Islam and terrorism inAzerbaijan rather than an inherent local tendency for such activities.25 Chechnyaand Dagestan are other sources of externally supported radical Islamist groups’entry into Azerbaijani territory, mostly funded by Saudi Arabia and inspired by itsWahhabi teachings.26 However, so far, the threat of Islamism for Azerbaijan’snational security has been minimal as there are factors mitigating the influence ofradical Islamism in the country.Firstly, Azerbaijan is a predominantly Shi’a society that had been radically

secularized under the non-religious Soviet education policies.27 The Shi’a religionof the society can be suggested as a factor that highly reduces the appeal of radicalSalafi teachings stemming from Saudi Arabia and Egypt.28 Furthermore, it hasbeen argued that Azerbaijan has a very educated, socially developed and highlysecularized population, with only a minority adhering to Islam’s basic tenets.29 Itis also important to note that the state structure of Azerbaijan even after the Sovietera has been secular, unlike most Muslim societies. Secondly, it is reasonable toexpect Turkey and Iran to exert greater degrees of influence on the countrycompared with Arab Middle Eastern states as the Azeri people have closer affinityto Turks and Iranians for various reasons: The Azeri people have linguistic andethnic similarities with Turks which forms the majority of Turkey’s population.Azerbaijan also has a strong connection with Iran as the Azeri minority reportedlyconstitute more than one-sixth of Iranian population.30 Azerbaijan has a sharedreligious, cultural and historical background with Iran as the territory that formsthe modern Republic of Azerbaijan had been part of consecutive Iran-based states(such as the Seljuk, Safavid and Qajar empires) for centuries. It is important tonote that Israel’s extreme interest in Azerbaijan in the early 1990s is identified by

23. Jackson, ‘Looking Forward to 2009’.24. Aras, ‘Post-Cold War Realities’, p. 69.25. See Marcus, Azerbaijan and Israel, p. 32.26. Tadeusz Swietochowski, ‘Azerbaijan: The Hidden Faces of Islam’, World Policy Journal, XIX(3) (2002),pp. 69–75.27. Raoul Motika, ‘Islam in Post-Soviet Azerbaijan’, Archives de Sciences Sociales des Religions, 115 (2001),p. 113.28. Marcus, Azerbaijan and Israel, p. 29.29. International Crisis Group, ‘Azerbaijan: Independent Islam and the State’, Europe Report, No. 191, 25 March2008; Marcus, Azerbaijan and Israel, p. 31.30. Mehrdad Izady, ‘Language Map of Iran’, Gulf 2000 Project (Columbia University, 2012), http://gulf2000.columbia.edu/maps.shtml (accessed 13 November 2012).

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distinguished experts of the region as an attempt to constrain Iran’s possibleinfluence in a country that shares common history, religion and ethnic bonds with asignificant portion of Iran’s population.31

Israel has formed ties with other Turkic states in Central Asia such asKazakhstan and Turkmenistan but none of these relationships has evolved into astrong and stable partnership like that with Azerbaijan. This should be seen as atestimony to the strength of the key security and economic interests shared by thepair. Concerns such as ‘stemming the tide of Islamism’ emphasized by Aras32 andother scholars33 can be said to exist more in the conservative predominantly SunniCentral Asian societies such as Uzbekistan and Turkmenistan, which are arguablymuch more susceptible to Islamist influences from Israel’s rivals in the MiddleEast. Therefore, it can be said that arguments endorsing the idea of a common anti-radical Islamist Azerbaijan–Israel front as the basis for understanding the strongties of Tel Aviv and Baku does not fully reflect reality. Reasons behind the Israel–Azerbaijan partnership should be looked for in the fields of economy and securityrather than the overstated Islamist factor.The specific geopolitical location of Azerbaijan to the north of Iran and its

relative proximity to Israel and the Middle East can also be seen as an influentialfactor that has affected the formation of ties. Azerbaijan’s convenient position justnorth of Iran could almost certainly be vital for Israel in any potential conflict thatmay arise between Tel Aviv and Tehran. Azerbaijan’s ethnic affinity with thelargest minority group in Iran can also be seen as a potential force that could beharnessed by Tel Aviv or Washington in an attempt to cause instability in Iran,even though the Iranian Azeri minority have not so far demonstrated anynoteworthy pro-independence or separatist intentions.

Iran’s Role

A key factor in Azerbaijan–Israel ties that is consistently emphasized in theliterature is the role Iran has indirectly played by causing security concerns forboth countries, thus naturally bringing them together in accordance with the oldmaxim of ‘the enemy of my enemy is my friend’. The significance of economicinterests for Azerbaijan–Israel relations has been overshadowed in the literatureby the ‘Iran factor’. Since the beginning of the relationship after the independenceof Azerbaijan in 1991, Israel has shown great interest in energy projects involvingAzerbaijan, the most noteworthy being the long-held desire of Israel to build apipeline that would carry Azerbaijani oil through Georgia to Turkey and finally toIsrael through the Mediterranean Sea.34 Despite the rapid increase in economicrelations between Azerbaijan and Israel over the years, the strategic side of the tiescentred on the shared objective of ‘countering Iran’ has been the main factoremphasized by observers.The basis for the Azerbaijan–Israel partnership is said to be the ‘shared

strategic interests’ in containing Iran’s influence in the region.35 Iran’s threat for

31. Anoushiravan Ehteshami and Emma C. Murphy, ‘The Non-Arab Middle East States and the Caucasian/Central Asian Republic: Iran and Israel’, International Relations, 12(81) (1994), p. 99.32. Aras, ‘Post-Cold War Realities’, p. 74.33. Marcus, Azerbaijan and Israel; Swietochowski, ‘Azerbaijan’.34. Aras, ‘Post-Cold War Realities’, p. 7435. Jackson, ‘Looking Forward to 2009’.

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Israel emanates from ideological reasons as the Islamic Tehran regime sees Israelas representative of everything it despises in the modern world in terms of valuesand identity, and a ‘symbol’ of Western hegemony over the Muslim world.36

Despite the shared historical background and similarities in identity and culture,Iran’s relations with Azerbaijan have also been troubled. The secular regime ofBaku stands in stark contrast with the Islamist regime of Tehran, thus posing athreat for various reasons, including ideological incompatibility, rivalry overenergy-rich Caspian resources and the potential of territorial loss for Iran due tothe possibility of Baku’s irredentist policies encouraging secessionism among theAzeri minority in the country. Tensions between Iran and Azerbaijan came to thesurface immediately after the latter became independent as the possible aspirationsof the new state for a ‘Greater Azerbaijan’ which would include a large part ofIranian territory inhabited by ethnic Azeris—the so-called ‘Southern Azerbai-jan’—was immediately recognized by Tehran as a great threat to its territorialintegrity and national unity.37

It can be argued that Iran has never fully accommodated itself to the idea of an‘independent Azerbaijan’ as the territory which is often referred to as ‘NorthernAzerbaijan’ had been part of successive Iranian empires for centuries, only to belost to the Russian Empire in the nineteenth century. For Baku, the high number ofAzeris living in Iran is an acute problem for its legitimacy, as the presence of amuch bigger Azeri population peacefully living in Iran could give the impressionthat Azeris can also be Iranians. In this context, it is important to note that thecurrent supreme leader of the Islamic Republic of Iran, Ali Khamenei, is an ethnicAzeri on his father’s side.38 Thus, Iran and Azerbaijan pose a serious danger to thevery existence of one another by constituting the potential to erode the legitimacyof the other’s regime. The two states compete to influence and appeal to the samepeople, ethnic Azeris living in both countries. Both regimes claim sovereigntyover the Azeri people; the Republic of Azerbaijan perceives itself as the solepolitical representative of Azeri nation.39

As summarized above, the roots of the hostility between Azerbaijan and Iran liedeep. It is not an issue that can easily be solved through meetings and diplomaticconsultations. This was best demonstrated in the failure and futility of Iranianefforts to form strong ties with Baku after 2003. Since that time, Iran has followed aseries of approaches ranging from sending high-level officials with messages ofcooperation to a campaign of intimidation and public statements of outright threatsby Iranian politicians such as President Ahmadinejad. However, Tehran has notbeen able to break the Azerbaijan–Israel partnership, and the Baku administrationhas continued to strengthen economic and security ties with Israel instead of Iran.40

In April 2006, Iran’s secretary of the Supreme National Security Council, AliLarijani, threatened to attack the Baku–Tbilisi–Ceyhan oil pipeline if Azerbaijancontinued to cooperate with Israel on military affairs.41 Azerbaijan’s

36. Marcus, Azerbaijan and Israel.37. Ehteshami and Murphy, ‘The Non-Arab Middle East States’, p. 82.38. See Mahan Abedin, ‘Iran at Sea over Azerbaijan’, Asia Times, 28 September 2004, http://www.atimes.com/atimes/Middle_East/FI28Ak01.html (accessed 29 November 2012); Svante E. Cornell, ‘Iran and the Caucasus:Triumph of Pragmatism over Ideology’,Global Dialogue, 3(2–3) (2001), http://www.worlddialogue.org/content.php?id¼150.39. ‘Odd But Useful Allies’, The Economist.40. Marcus, Azerbaijan and Israel, p. 39.41. Marcus, Azerbaijan and Israel, p. 39.

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determination to strengthen ties with Israel at the expense of Iran shows how muchthe relationship is perceived by the Baku regime to be beneficial. Even in the faceof immense Iranian pressure, which often bordered on a threat of invasion, theAzerbaijan–Israel partnership proved resilient.42

Economic Needs of Israel

The lack of attention shown to the role of energy in the literature on Azerbaijan–Israel relations is surprising. There are only a few works that have focused on thisaspect.43 Most works have emphasized the role of Iran as a threat and the securityaspect of relations, but energy has played a major role in the formation of ties.Since Israel’s independence, akin to its search for military security, ensuring‘energy security’ has been a source of concern for Tel Aviv due to a lack of energyreserves in the country and, more importantly, Israel’s inability to acquire oil frommain oil-producing countries in the region, mainly hostile Arab regimes such asSaudi Arabia.44 Energy security can be defined as ‘a country’s ability to havecontinued access to sufficient supplies of energy, oil and gas, either from sourceson its own territory or from sources abroad’.45 Due to the absence of oil andnatural gas in Israeli territory, Israel has been completely reliant on oil imports.46

During the Cold War, Israel imported oil from Egypt, the North Sea region, WestAfrica and Mexico, while in the post-1991 era Tel Aviv changed its focus toRussia and Commonwealth of Independent States (CIS)47 countries such asAzerbaijan and Turkmenistan, as it would be cheaper to import oil from Caucasiaand the Caspian Sea.48 In this context, the proposed Baku–Tbilisi–Ceyhanpipeline project, which was planned to bring Caspian oil from Azerbaijan throughGeorgia and Turkey to the Mediterranean, emerged as a viable way of ensuringIsrael’s energy security, especially if the pipeline could be extended through theMediterranean and connected to Israeli infrastructure.49

The energy issue has made a considerable impact on the hostility between Iranand Azerbaijan due to the rivalry of the two countries as energy producers.50 Bothcountries are major producers of oil and natural gas and it has been reported thatsince the Baku–Tbilisi–Ceyhan (BTC) pipeline project was initiated, Iranianauthorities have been uneasy about the emergence of Turkey’s Ceyhan port in theMediterranean as an alternative energy hub to the Persian Gulf and Azerbaijan’srole as an alternative energy source for the world economy.51 The influential roleof the Ceyhan port has been recognized, with one report suggesting that ‘Turkey isseeking to build Ceyhan as a regional energy hub, with private investors receiving

42. Marcus, Azerbaijan and Israel, p. 42.43. See Murinson, ‘Azerbaijan–Turkey–Israel Relations’.44. Ariel Cohen and Kevin DeCorla-Souza, ‘Eurasian Energy and Israel’s Choices’,Mideast Security and PolicyStudies, 88 (February 2011) (The Begin-Sadat Center for Strategic Studies, Bar-Ilan University), p. 1.45. Murinson, ‘Azerbaijan–Turkey–Israel Relations’, pp. 47–48.46. Andrea Mihailescu, ‘Israel’s Ongoing Foreign Energy Dependence’, Washington Times, 8 November 2004.47. A regional organization formed by former Soviet Republics during the disintegration of the Soviet Union.48. Murinson, ‘Azerbaijan–Turkey–Israel Relations’, p. 50.49. Christopher Bollyn, ‘Same Old Names, Faces Primed to Make Big Bucks off Tragedy’, American Free Press,14 October 2001, http://www.rense.com/general15/game.htm (accessed 27 November 2012).50. See Figure 1 and Figure 2 for a comparison of natural gas productions in Iran and Azerbaijan; see Figure 3 andFigure 4 for oil production levels. See the Appendix at the end of the article for all figures.51. Radio Free Europe/Radio Liberty, Iran Report, 4(28) (30 July 2001), http://www.rferl.org/content/article/1342839.html (accessed 3 October 2012).

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approval to build several refineries at the oil terminal, adding revenue beyondtransit fees’.52 Even though the port is in Turkey, this issue stands as one of themajor reasons behind tensions between the Israel–Azerbaijan partnership andIran. The energy rivalry between Baku and Tehran in the Caspian Sea can be seenin occasional Iranian naval incursions into Azerbaijani territorial waters andrepeated disruptions of Azerbaijani energy-reserve exploration efforts by Iranianmilitary vessels.53 This economic rivalry is certainly connected to the geopoliticaland diplomatic positions of Iran and Azerbaijan within the international system.While Iran has been isolated from the international community, mainly due to itshostility to the Western bloc of nations since the 1979 revolution, Azerbaijan hasbeen committed to following a pro-Western foreign policy direction, willing to bea member of NATO and joining European cultural and sports organizations suchas the Eurovision music contest.54 As such, the BTC pipeline can be seen as aconcerted Western effort, clearly supported by Israel and Turkey, to open newchannels of energy corridors in order to reduce international dependence onIranian energy.Immediately after Azerbaijan’s independence in 1991, the Turkish government

and state-owned enterprise TPAO (Turkish Petroleum Cooperation) co-developedand proposed the BTC project to the Azerbaijani government, a move directlysupported by Israel and even promoted by Jewish lobby groups in Washington togain the approval and support of the USA as well.55 The Israeli minister ofnational infrastructures, Binyamin Ben-Eliezer, attended the official openingceremony of the BTC in 2006. Immediately, Azerbaijan began selling oil to Israelthrough the BTC as Azerbaijani oil was carried by tankers from the Ceyhan port toIsrael. The BTC has played a major role in cementing the Azerbaijan–Israelpartnership in the last few years.56 Since it became operational in 2006, the BTChas been carrying an average of 1.2 million barrels of oil per day from it source inthe Caspian Sea, known as the Azeri-Chirag-Guneshli oil field in Azerbaijan, viaGeorgia to the Turkish coast on the Mediterranean.57

Israel has proposed several projects to also buy natural gas from Azerbaijanthrough a gas pipeline that could be built as a separate parallel line to the BTC.58

Later on, this project, now widely known as the ‘South Caucasus gas pipeline’ orthe ‘Baku–Tbilisi–Erzurum pipeline’, was realized, becoming operational in2007, carrying an average of 7 billion cubic metres of natural gas per annum fromits source in the Caspian Sea in Shah Deniz field in Azerbaijan through Georgiaand Turkey and finally to the Mediterranean Sea and the global market.59 Anothernoteworthy Israeli proposition is the planned construction of a multi-purpose

52. Manfred Hafner, Simone Tagliapietra and El Habib El Elandaloussi, ‘Outlook for Oil and Gas in Southernand Eastern Mediterranean Countries’, MEDPRO Technical Report, No. 18, October 2012, p. 52.53. Murinson, ‘Azerbaijan–Turkey–Israel Relations’, p. 61.54. Soner Cagaptay and Alexander Murinson, ‘Good Relations between Azerbaijan and Israel: AModel for OtherMuslim States in Eurasia?’, Policywatch, 982 (30 March 2005), http://www.washingtoninstitute.org/policy-analysis/view/good-relations-between-azerbaijan-and-israel-a-model-for-other-muslim-state (accessed 22October 2012).55. Murinson, ‘Azerbaijan–Turkey–Israel Relations’, p. 50.56. Fariz Ismailzade, ‘Israel Shows Interest in Azerbaijan Energy and Trade Projects’, Eurasia Daily Monitor, 3(112) (June 2004), http://www.jamestown.org/single/?tx_ttnews%5Btt_news%5D¼31770&no_cache ¼ 1#.VVnaG_ntlBc.57. Hafner, Tagliapietra and El Elandaloussi, ‘Outlook for Oil and Gas’, p. 50.58. Murinson, ‘Azerbaijan–Turkey–Israel Relations’, p. 56.59. Hafner, Tagliapietra and El Elandaloussi, ‘Outlook for Oil and Gas’, p. 29.

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undersea pipeline from Ceyhan port to Israel through the Mediterranean Sea,which would be able to carry oil, natural gas, water and electricity. The plan wasproposed to the Turkish government in July 2008 and it was envisaged thatAzerbaijan and Israel would be major contributors.60

According to the State Customs Committee of Azerbaijan, Israel is Azerbaijan’ssixth largest trading partner61 while Azerbaijan provides more than a quarter ofIsrael’s oil imports as of February 2013.62 The Israeli projects to build anunderwater gas pipeline from Ceyhan to Haifa and an oil pipeline to Ashkeloncollapsed due to the deterioration of Turkish–Israeli relations in recent years.If these projects were realized, Azeri energy would have accounted for an evenbigger portion of Israel’s total imports today.As of 2009, total proven oil resources in the Caspian region covering

Azerbaijan, Kazakhstan, Turkmenistan and the land-locked Uzbekistan stood ataround 38 billion barrels, while the most recent analysis conducted in the sameyear suggests that estimated oil reserves of all those countries may be around 202billion barrels.63 As of 2009, Azerbaijan had 850 billion cubic metres of provennatural gas reserves and 7 billion barrels of proven oil reserves, although theestimates calculated in 2005 indicated that its potential oil reserves may be around32 billion barrels.64 Today, the estimates are even higher as Azerbaijan reportedlypossesses almost 25 per cent of total oil reserves in the Caspian region, whichimplies that its potential reserves could increase up to 60 billion barrels in thecoming years with more surveys conducted in the Caspian Sea.65 The energyreserves of Azerbaijan are significant, but it cannot possibly hope to compete withan oil-producing giant such as Saudi Arabia with its 267 billion barrels of provenoil reserves.66 It should be noted that the importance of Azerbaijan for Israel is notmainly based on the quantity of oil and gas it produces, as Azerbaijan’s oil andnatural gas reserves are modest compared to the gas reserves of other producerssuch as Russia and Kazakhstan or the oil reserves of Iran and Saudi Arabia.However, the economic partnership with Azerbaijan enables Israel to diversify itsenergy imports, providing it with energy security and at the same time deprivingits rival, Iran, of more revenues by keeping oil prices low and stable.67 Israel beganbuying oil from Azerbaijan in 1991 and by 2002 it was the second largest importerof Azerbaijani oil, which made up one-sixth of Azerbaijan’s total exports thatyear.68

Bahgat argues that the recently discovered natural gas reserves in Israeliterritorial waters will reduce Israel’s dependence on natural gas imports,69 but thecalculations do not take the newly announced Israeli government plans intoaccount. Recently, the Israeli government announced a new strategy for ensuring

60. Murinson, ‘Azerbaijan–Turkey–Israel Relations’, p. 56.61. See Figure 5 for Israel’s oil imports and Figure 6 for Azerbaijan’s oil exports.62. Shiriyev, ‘Azerbaijan–Israel: Firm Alliance (1)’.63. Cohen and DeCorla-Souza, ‘Eurasian Energy and Israel’s Choices’, p. 5.64. Cohen and DeCorla-Souza, ‘Eurasian Energy and Israel’s Choices’, p. 6.65. Cohen and DeCorla-Souza, ‘Eurasian Energy and Israel’s Choices’, p. 6.66. Cohen and DeCorla-Souza, ‘Eurasian Energy and Israel’s Choices’, p. 6.67. Lucian Pugliaresi, ‘Energy Security: How Valuable is Caspian Oil?’, Policy Brief 3—Caspian StudiesProgram (2001), http://belfercenter.ksg.harvard.edu/publication/3103/energy_security.html (accessed 29November 2012).68. See Bourtman, ‘Israel and Azerbaijan’s Furtive Embrace’.69. Gawdat Bahgat, ‘Israel’s Energy Security: Regional Implications’, Middle East Policy, XVIII(3) (2011),pp. 25–34.

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the energy security of the country. The plan, referred to as ‘Israel’s EnergyRevolution 2020’, envisages a radical transformation of Israel’s energy structurefrom an oil and coal-based economy to a natural gas and solar energy-basedstructure. The Israeli government is extremely secretive and cautious aboutreleasing data related to its energy needs, so only the official data from eight yearsago can be legally accessed. According to the most recently released data in 2007,petroleum covered 63 per cent of Israel’s energy demand while natural gas wasonly 6 per cent.70 However, the new strategy indicates that Israel’s energystructure will be completely changed by 2020 as the share of natural gas in theenergy structure is expected to rise from less than 10 per cent to around 40 percent.71 This plan implies that Israel’s need for natural gas will dramaticallyincrease in the following decade and its energy trade with Azerbaijan will acquirean even more profound role in the Israeli economy.72 As of 2011, Azerbaijanalready provided around 30 per cent of Israel’s total energy needs and this can beexpected to increase in the future.73

Azerbaijan’s importance for Israel’s energy security strategy is not limited to itsown production levels. Azerbaijan also has the potential to serve as an energy hubfor transferring natural gas from energy-rich Turkmenistan and Kazakhstanthrough the Caspian Sea to Azerbaijan, then through a gas pipeline that would runparallel to the BTC. There were concrete plans for such a project, referred to as the‘Merhav deal’ due to the development of the project by the Israeli energy andinfrastructure conglomerate Merhav corporation. In 1998, Merhav negotiated a $3billion deal with the Turkmenistan government headed by president SaparmuratNiyazov, widely known as Turkmenbashi, but the project never materialized dueto immense pressure from Russia to have its own pipeline project accepted, the so-called ‘Blue Stream’, which would carry natural gas from Russia through theBlack Sea to Turkey then to Europe and the rest of the world.74

Economic Needs of Azerbaijan

Azerbaijan’s foreign policy towards Israel has been hailed as a ‘tremendousexample of pragmatism’ in decision-making.75 When Azerbaijan becameindependent following the collapse of Soviet authority in the Caucasus in 1991,the new republic faced imminent danger to its very existence as immediately afterthe disintegration of the Soviet Union, military conflict began between Azerbaijanand its neighbour Armenia, another former Soviet republic. Furthermore, theeconomy of Azerbaijan was extremely weak with few if any trade links to non-Soviet countries. The national economy was the product of several decades ofSoviet central planning and, as with many other CIS countries, all economicactivities and the domestic market in the country were oriented towards trade withRussia, providing Moscow with an enormous influence over the Azerbaijani

70. See Cohen and DeCorla-Souza, ‘Eurasian Energy and Israel’s Choices’, p. 2; Bahgat, ‘Israel’s EnergySecurity’, p. 26.71. Marcus, Azerbaijan and Israel, p. 67.72. See Figure 7 for Israel’s Natural Gas Demand Forecast.73. Sheera Frenkel, ‘Israel’s New Ties to Azerbaijan Worry Neighbouring Iran’, The Miami Herald, 25 April2012, http://www.miamiherald.com/2012/04/25/2767412/israels-new-ties-to-azerbaijan.html (accessed 23October 2012).74. Murinson, ‘Azerbaijan–Turkey–Israel Relations’, pp. 53–54.75. See, for instance, Marcus, Azerbaijan and Israel, p. 7; Ismailzade, ‘Israel Shows Interest’.

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economy and decision-making even after the collapse of the Soviet Union. In thiscontext, Marcus argues that Israel offered all the means necessary to break orweaken the Russian hold over Azerbaijan: ‘The skills and know-how [required] tomove Azerbaijan towards a sustainable, developed and independent future’.76

Israel’s technological capabilities, its potential as a gateway for Azerbaijan tosecure permanent ties with the Western world and the USA in particular, andIsrael’s financial assistance to Azerbaijan since the 1990s have been among themost emphasized factors to explain the importance of the relationship fromAzerbaijan’s perspective.77

An overlooked factor that has played a large role in the initial formation andevolution of the Israel–Azerbaijan partnership is Israeli support in military affairs.Armenia was militarily superior to Azerbaijan, as proven by the Armenian victoryin the Nagorno-Karabakh war. The Azerbaijani armed forces desperately neededtraining and equipment in the aftermath of the war. Following its military defeatagainst Armenia, Azerbaijan was in a particularly isolated and fragile position inthe region as two of its major neighbours, Iran and Russia, sided with Armeniaduring the conflict.78 Iran supported Armenia by supplying natural gas and oilduring the war and Tehran has formed close relations with Armenia since then.79

Russia also chose to side with Armenia by providing $1 billion worth of militaryequipment to the Armenian armed forces. Iranian and Russian support forArmenia further pushed Azerbaijan towards a strategic partnership with Israel.Since the early 1990s, Israel has supported Azerbaijan and is reported to havesupplied arms during and after the conflict with Armenia.80 It is important to notethat Israel’s economic and military support has helped Azerbaijan to recover fromthe negative material and psychological consequences of its defeat to Armenia inthe Nagorno-Karabakh war. It has been reported that Turkey and Israel providedStinger missiles to Azerbaijan during the war.81 Since the early 1990s, Israeli firmshave been essential for Azerbaijan to modernize its military equipment by sellingmassive amounts of small arms, artillery and air force equipment, while Turkisharmy officers have been involved in the training of their Azeri counterparts.82

The impact the arms sales have had on Azerbaijan–Israel relations cannot beemphasized enough. Since its independence, Azerbaijan’s only access to moderntechnological weaponry has been through Israeli firms, as the US StateDepartment, under the influence of the Armenian lobby, has banned all arms salesto Azerbaijan while Western European governments have not been willing to sellweapons and modernize the Azerbaijani military in order to discourage Baku froma ‘revanchist war’ against Armenia due to the ongoing occupation of Azerbaijaniterritory in Karabakh by Armenian forces.83 The influence of the Armenian lobbyover Washington’s decision-making during the Nagorno-Karabakh war (1988–1994) is a particularly noteworthy case for understanding howminority groups canaffect foreign policy. The role of the Armenian lobby in initiating Section 907 of

76. Marcus, Azerbaijan and Israel, p. 8.77. See, for instance, Aras, ‘Post-Cold War Realities’, p. 69; Abilov, ‘The Azerbaijan–Israel Relations’.78. Bourtman, ‘Israel and Azerbaijan’s Furtive Embrace’, pp. 47–57.79. See Cagaptay and Murinson, ‘Good Relations between Azerbaijan and Israel’.80. See Jane Hunter, ‘Israel and Turkey: Arms for Azerbaijan?’, Middle East International, 23 October 1992,p. 12; Aras, ‘Post-Cold War Realities’, p. 73.81. Cagaptay and Murinson, ‘Good Relations between Azerbaijan and Israel’.82. Marcus, Azerbaijan and Israel, p. 72.83. Shiriyev, ‘Azerbaijan–Israel: Firm Alliance (2)’.

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the Freedom Support Act, which explicitly prohibited the US government and USfirms from offering any kind of assistance to Azerbaijan, has been welldocumented.84 Under these circumstances, the only options left for Baku were tobuy military equipment from post-Soviet countries such as Ukraine and Russia,who had continued to produce old Soviet weapons or to look for alternativemanufacturers. The high technology and quality of Israeli weapons convincedAzeri policy-makers of the benefits of strategic ties with Tel Aviv. Since the mid-1990s, Israel has reportedly been selling ‘surface-to-air missiles, rocket launchers,military communications equipment, drones and military satellites’ in addition toupgrading Azerbaijan’s old Soviet-made T-72 tanks.85 In February 2012, a newarms deal between Israel and Azerbaijan worth $1.6 billion was confirmed byIsraeli officials, a package that included anti-aircraft, missile defence systems anddrones.86 In early 2012, an Israel–Azerbaijan joint venture established inAzerbaijan began to produce drones for military use.87

Another key reason behind Azerbaijan’s decision to form a partnership withIsrael is that the ties would help Azerbaijan to modernize its economy andparticularly the petroleum sector, which in turn would create more jobs and bolstereconomic growth.88 It is clear that economic cooperation with the isolated andheavily sanctioned Iranian economy would provide few if any benefits toAzerbaijan, whereas cooperation with Israeli firms promised the transfer of know-how, modern production techniques and integration into the global market.Notable areas of economic cooperation have been telecommunications,agriculture, construction, tourism, heavy machinery and high-tech sectors suchas internet technologies. Israel’s military-technological support for Azerbaijan,especially in terms of providing modern equipment and training, has formed thebasis of the partnership from Azerbaijan’s perspective. Agriculture is Azerbaijan’ssecond largest production sector after oil, and Israeli training programmes andtechnical assistance in modernizing agricultural equipment have also provedessential for the economic growth of Azerbaijan.89 The total trade between Israeland Azerbaijan has grown rapidly over the years, reaching an annual $4 billion atthe end of 2011.90 Due to the fact that Israel’s official statistics for imports do notinclude oil that is carried through third parties, it should be noted that traderelations between Azerbaijan and Israel may be even more developed and larger involume than it seems at first sight.91 Another factor that is not taken into account inofficial trade balance sheets between the two countries is the reported preferenceof Israeli firms to be registered as US or UK branches of companies when enteringthe Azerbaijan market, meaning that the actual volume of economic activitiesbetween Azerbaijan and Israel should be much higher.92

Certainly, Israel’s close political and economic ties with the USA and theinfluence of the Jewish lobby over decision-making in Washington is another key

84. See, for instance, Mahir Ibrahimov and Erjan Kurbanov, ‘Getting it Wrong in the Caucasus’, Middle EastQuarterly, December (2004), pp. 65–70.85. Shiriyev, ‘Azerbaijan–Israel: Firm Alliance (2)’.86. Shiriyev, ‘Azerbaijan–Israel: Firm Alliance (2)’.87. ‘Odd But Useful Allies’, The Economist.88. Marcus, Azerbaijan and Israel, p. 42.89. Bourtman, ‘Israel and Azerbaijan’s Furtive Embrace’.90. Frenkel, ‘Israel’s New Ties to Azerbaijan’.91. Bishku, ‘The South Caucasus Republics and Israel’, p. 307.92. Marcus, Azerbaijan and Israel, pp. 53–54.

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factor as these ties have been useful for Azerbaijan in terms of attracting foreigndirect investment and gaining the support of the USA.93 Some influential Jewishlobby groups such as the Agudath Israel of America, the American JewishCommittee, the American Jewish Congress, the Anti-Defamation League andB’nai B’rith International in the USA have already started to support close tiesbetween Azerbaijan and the USA.94 It has been noted that liberalization of theAzerbaijani economy led numerous Israeli companies to invest in Azerbaijan,which is said to have filled the domestic market with Israeli goods of all kinds suchas ‘cell phones, beer and even ice cream’.95

Conclusion

This article has attempted to cover a largely overlooked aspect of Azerbaijan–Israel relations, namely the economic inter-dependency of the two countries, inaddition to analysing the indirect role Iran has played in the evolution of bilateralties. In light of the aforementioned economic needs of both countries—Israel forenergy and Azerbaijan for technology, weaponry and technical assistance—itwould be reasonable to argue that the relations between Azerbaijan and Israelcould develop even more in the future despite the considerable pressure Iranplaces on Azerbaijan to cut the ties. It has been argued that the recent mediaattention and conspiracy theories about Azerbaijan’s secret arms deals with Israelmay negatively affect the relationship, as the ties have become more ‘costly’ forBaku due to the potentially negative consequences its continuing partnership withIsrael could have on Azerbaijan’s relations with Muslim societies.96 In thiscontext, it must be noted that Azerbaijan’s relations with Israel have even survivedthe crisis in Turkish–Israeli relations, even though the Turkish government—Azerbaijan’s closest ally in the Muslim world—had repeatedly voiced itsdiscontent over Azerbaijan’s ties with Israel. Furthermore, another major power inthe region, Iran’s continuous critique and diplomatic campaign againstAzerbaijan–Israel ties since the 1990s has also proved futile. As summarized inthis article, it must be noted that the economic and strategic benefits both sidesgain are simply too overwhelming to let the relationship deteriorate. In light ofthis, unless a dramatic government change occurs in Baku, the relationship can beexpected to continue to play a large role in the economic and strategic powerbalances in the wider Middle East and Caucasia region. However, it is yet to beseen how a future potential military conflict between Iran and Israel would affectAzerbaijan–Israel relations.

Disclosure Statement

No potential conflict of interest was reported by the author.

93. Bourtman, ‘Israel and Azerbaijan’s Furtive Embrace’.94. Marcus, Azerbaijan and Israel, p. 24.95. Bourtman, ‘Israel and Azerbaijan’s Furtive Embrace’.96. Shiriyev, ‘Azerbaijan–Israel: Firm Alliance (1)’.

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Appendix

Figure 1. Azerbaijan’s Natural Gas ProductionSource: US Energy Information Administration

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Figure 2. Iran’s Natural Gas ProductionSource: US Energy Information Administration

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Figure 3. Azerbaijan’s Oil ProductionSource: US Energy Information Administration

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Figure 4. Iran’s Oil ProductionSource: US Energy Information Administration

Figure 5. Israel’s Oil ImportsSource: US Energy Information Administration

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Figure 6. Azerbaijan’s Oil ExportsSource: US Energy Information Administration

Figure 7. Israel’s Natural Gas Demand ForecastSource: Ministry of Energy and Water Resources of Israel

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