Publication: Monitor Volume: 8 Issue: 100

On May 18-20, Azerbaijani President Haidar Aliev paid a long-expected official visit to Iran. Initially scheduled to have taken place in 1999, the visit was rescheduled and postponed again many times. A seemingly firm September 2001 date fell through as a result of Iranian naval and air incursions into Azerbaijan’s Caspian waters and air space last July and August. Since then, Azerbaijan’s overall security situation has improved as a result of a more active American and Turkish role in the South Caucasus, an incipient adjustment in Armenia’s policy as a result of those trends, and ongoing normalization of Russia-Azerbaijan relations.

All this made it possible for Aliev to undertake the visit to Iran from a stronger position than would have been the case some months ago. His discussions with Iran’s President Mohammad Khatami, spiritual leader Ayatollah Ali Khamenei and Foreign Affairs Minister Kamal Kharrazi seem to have established a basis for political dialogue over long-standing differences, which remain deep. One of the most intractable of these issues is the status and division of the Caspian Sea. During Aliev’s visit, Tehran’s position on this issue confirmed the unity of hardline views among Iranian clerical conservatives and moderate-reformist circles. With Aliev in Tehran, the reformist daily Nouruz joined the clerically influenced press in chastising Azerbaijan’s Caspian policy.

In an assessment of Iran-Azerbaijan relations, published during Aliev’s visit, the pro-government Iran News (May 19) focused heavily on the disagreements, listing them as follows: (1) “Azerbaijan’s close ties with the United States,” its “policy dependent on and subservient to the United States,” (2) Baku’s “cooperation with the criminal regime in Tel-Aviv,” (3) “Azerbaijan’s unilateral approach and strategy concerning exploration and development of Caspian oil resources”–a reference to Azerbaijan’s pioneering role in advocating sectoral division and inviting Western oil companies, and (4) “Azerbaijan’s irrational insistence on implementation of the Baku-Ceyhan pipeline project.”

Accompanying Aliev to Tehran, the top managers of Azerbaijan’s State Oil Company and Foreign Affairs Ministry experts held talks with Iranian counterparts on the Caspian Sea’s status and division. These discussions resulted only in the scheduling of further talks in Baku next month at expert level. In Tehran, as could be expected, the Iranians defended their claim to a 20-percent share of the Caspian Sea’s area. Sectoral division along the median line would only give them 12 to 13 percent, however. For its part, the Azeri delegation seemed to hint at a possible compromise on a dividing line, which would give Iran 14.8 percent, should Tehran accept sectoral division. The sides skirted over the issue of the highly promising Shalov-Sharg-Araz offshore oilfields. Last July, Iran used armed force to stop British Petroleum and Azerbaijan’s State Oil Company from exploring those fields, although they are situated well within Azerbaijan’s part of the sea by any definition.

The Iranians also predictably insisted that all five Caspian countries accept the principle of joint decisionmaking with regard to mineral exploration and development, shipping, fishing and environmental protection. Khatami, moreover, called for the formation of a five-country joint authority to deal with those issues. This approach is unacceptable to Azerbaijan–and also to Kazakhstan–because it would interfere with the Western offshore projects. During the opening, media-accessible part of the of the discussions, Aliev disagreed with his counterpart Khatami’s use of the loaded terms “Mazandaran” and “Gazvin” as substitute names for the Caspian Sea.

The sides, moreover, differed over the bilateral agreement just signed by Russia and Kazakhstan on dividing the Caspian seabed among them in their portion of the sea. Azerbaijan plans to sign a similar agreement with Russia next month, in the belief that a division confined to the seabed–that is, not extending to the water body and water surface–is preferable to no division at all, and might in time lead to full-fledged sectoral division. Literally on the eve of Aliev’s Tehran visit, the U.S. special envoy for Caspian affairs Steve Mann conferred with Aliev in Baku, and endorsed both the Kazakhstan-Russia agreement and the planned Azerbaijan-Russia agreement. These agreements do not affect any third Caspian country. Nevertheless, Iran is openly criticizing such bilateral agreements because they ignore Tehran’s insistence on a five-party consensus.

Both President Khatami and Ayatollah Khameney cautioned Aliev “against the presence of the U.S. and the racist Israeli regime in the region, a presence contradicting the interests of the region’s peoples.” Iran has for years objected to the existence of an Israeli embassy in Baku and, more generally, to close Azerbaijan-Israel relations. These are, in some respects, an extension of the close relationship between Israel and Turkey.

Another chronic disagreement between Iran and Azerbaijan concerns the latter’s desire to open a consulate in Tabriz, the main city in Iran’s Azeri-inhabited area. No progress was announced on that issue during Aliev’s visit. The consulate issue itself is only the visible tip of submerged problems involving the relationship between Tehran, the Azeri population of Iran and Baku.

Political differences are one of the factors that discourage large-scale economic cooperation. Two ambitious infrastructure projects have been under discussion since the mid-1990s, and were brought up again during Aliev’s visit. One is a modern railroad that would link Azerbaijan to Iran’s port Bandar Abbas on the Persian Gulf. The other is a highway from Baku to the Azerbaijani-Iranian border town of Astara on the Caspian Sea, continuing into northern Iran. The discussions are going on inconclusively. Khatami accepted Aliev’s invitation to pay a return visit to Baku, but no timeframe has been announced (Turan, ANS, Space Television, IRNA, Tehran Times, Voice and Vision of the Islamic Republic of Iran, May 17-21).