Speech by the President of the Republic of Azerbaijan Heydar Aliyev at the Center for Strategic and International Studies in Washington D.C. – April 26, 1999

 Distinguished Mr. President!

Ladies and gentlemen!

I cordially greet you and consider our meeting today very important.

I thank everyone who is present here at the Center for Strategic and International Studies for my speech. It is an honor for me to deliver a speech at this auditorium.

Mr. President, I thank you for your words on Azerbaijan and my activity. You explained everything correctly.

Azerbaijan is a small country in the Caucasus. You are probably well informed about our country, therefore, I don`t want to take your time with details. I just want to note that Azerbaijan restored its independence in 1991 when the Soviet Union was dissolved. Azerbaijan first gained its independence in 1918 from the collapsing Russian empire. However, the 23-month existence of the Azerbaijan Democratic Republic ended as a result of sovietization of the country. As a constituent republic Azerbaijan was part of the Soviet Union for 70 years and regained its independence in 1991.

The post-1991 period was very complicated for Azerbaijan. Unlike other former Soviet republics, Azerbaijan had a tense, difficult and tragic internal situation. It happened as a result of Armenia`s claims to annex our Nagorno-Karabakh province in 1988 when Azerbaijan was part of the Soviet Union. The military aggression of Armenia against Azerbaijan resulted in an outbreak of a conflict between the two nations. The aggression has continued up to now. Later I will tell about it a little bit more.

The second issue complicating the situation of our country was injustice of the Soviet authorities towards Azerbaijan. The main evidence was the military invasion of the Soviet troops to Baku and aggression against our people in January 1990. Innocent people were killed during the bloody January tragedy in 1990. That event made the internal political situation in Azerbaijan more complicated.

Azerbaijan regained its independence in the background of those events. They led to struggle of various illegal armed gangs for power in Azerbaijan. As a result, changes of governments happened in 1992 and 1993 in Azerbaijan.

Internal discords and clashes resulted in a civil war in Azerbaijan in June 1993; Azerbaijan faced a threat of split-up. Under those conditions Armenia enhanced its aggression against and foreign forces increased their pressure on Azerbaijan. In 1993 we could hardly prevent a civil war in Azerbaijan. However, illegal armed gangs inside the country still continued their struggle for power. As a result of destructive activity of various armed gangs and political groups, there were coup attempts in Azerbaijan in October 1994 and later in March 1995. They were foiled. But those terrorist groups attempted to carry out provocations and terrorist acts in Azerbaijan even later. Special services of foreign countries organized several provocative operations in Azerbaijan; two bombings happened in Baku Metro in 1994. We managed to foil all of them.


In October 1995, the first Constitution of Azerbaijan was adopted and the first democratic parliamentary elections were held in Azerbaijan.

At present, the political situation is stable in Azerbaijan. We achieved this stability in 1995 and the Azerbaijani government has had full control over the country ever since.

Along with such an tense internal situation, Armenia`s aggression against Azerbaijan continued. Provided with foreign assistance, the Armenian armed forces occupied 20 percent of our lands, having also used the weakness of and instability in Azerbaijan. Over one million Azerbaijani faced ethnic cleansing in the occupied areas and had to leave their homes. They now live in tents in different regions of Azerbaijan. You can see the Azerbaijani lands occupied by the Armenian armed forces on this map. The Nagorno-Karabakh area is highlighted red. Besides Nagorno-Karabakh, seven districts around it were also occupied. These lands are still under Armenian control.

Cease-fire was achieved in the Armenian-Azerbaijani conflict in May 1994. We signed the cease-fire treaty. For five years we have been maintaining the cease-fire regime and striving to find a peaceful solution of the conflict. Principles for its solution were adopted in Lisbon summit of OSCE in December 1996. We are trying to achieve a peaceful settlement of the conflict on the basis of those principles. The principles include restoration of territorial integrity of Azerbaijan, granting Nagorno-Karabakh high self-governing status within the Azerbaijan Republic, withdrawal of the Armenian armed forces from the occupied areas, and return of Azerbaijani refugees to their homes. However, the Armenian side does not accept the principles.

The Mink Group of OSCE was established in 1992 in order to assist peaceful solution of the conflict. Three great nations – Russia, the USA and France have been co-chairing the Minsk Group since 1997. The Minsk Group submitted proposals in June 1997 and in September 1997. The latter included liberation of 6 districts around Nagorno-Karabakh, granting Nagorno-Karabakh high self-administration. Decision over Lachin and Shusha would have been made later.

This is a step-by-step deal: to liberate occupied districts in the first stage, to determine the status of Nagorno-Karabakh in the second stage. We accepted this proposal. In September-October 1997 Armenia also declared they want to accept the proposal. The former president of Armenia Levon Ter-Petrosian supported the proposal, justified its acceptance and conveyed his opinions to press. However, Levon Ter-Petrosian resigned and change of government occurred in Armenia in February 1998 as a result of internal political processes in Armenia. Thus, that proposal was not effective.


The Minsk Group was almost ineffective in 1998. That year, in November with the initiative of Russia, the co-chairs submitted a new proposal. It implied an establishment of a \"common state\" in Azerbaijan and granting Nagorno-Karabakh statehood inside Azerbaijan within the framework that common state.

First, there is no statehood form in world experience and international law norms. That conception was invented by Russian representatives in the Minsk Group. However, we can never accept that proposal, since it indirectly includes granting Nagorno-Karabakh independence.

The authors of the proposal are Russian representatives of the Minsk Group. We spoke to them about our concern. Not surprisingly, Armenia accepted that proposal for the first time. But the Armenian side rejected all other plans of the Minsk Group, including the two proposals put forward in 1997. However, they accepted the \"common state\" principle immediately and advocated its acceptance.

We will still strive to solve the problem with mediation of the Minsk Group. We hope the Minsk Group will submit a new proposal that will be suitable for both sides.

I guess amongst the issues you are interested in related to our region and Azerbaijan are use of Azerbaijan`s energy resources and problem of the Caspian Sea. You are aware that Azerbaijan is an old oil country. There are rich oil and gas fields onshore and offshore Azerbaijan. We have tried to exploit these resources to develop our economy and better people`s welfare. At the same time, we have started oil production in order to meet oil and gas needs of the world.

By signing the first contract called the \"Contract of the Century\" in September 1994, we introduced the Caspian reserves to the world. I am pleased to declare that the Contract of the Century is being consistently implemented. In November 1997 we got preliminary oil. At the same time, we have been working on construction of pipelines to export this oil. We constructed the Baku-Novorossiysk pipeline that reaches the Novorossiysk, Russia on the Black Sea, in order to export preliminary oil. You see it on the map. But we had planned to build an alternative oil pipeline and decided to construct the second pipeline stretching from Baku to Supsa, Georgia on the Black Sea. The pipeline was constructed and inaugurated on April 17. Now oil is exported via a Western pipeline and the first tankers take oil from Supsa to world market.

Furthermore, we are working on preparation and construction of a major oil pipeline. Construction of an oil pipeline from Baku to Ceyhan, Turkey on the Mediterranean Sea is planned. Our negotiations with the Turkish government assume that technical and financial aspects of construction of the oil pipeline will be solved within three months and realization of the project will start afterwards.

Azerbaijan initiated global use of not only its own resources, but all energy resources of the Caspian Sea. Relevant actions are being carried out for oil and gas extraction in the Kazakh, Turkmen, Russian and Iranian sectors of the Caspian Sea.

Azerbaijan has signed 16 important contracts with big oil companies of the world since 1994. Those companies represent 14 countries. Big oil companies from the United States operate in Azerbaijan as well. Tomorrow three new contracts will be signed here in Washington D.C.

Azerbaijani oil reserves have attracted much interest all over the world since the \"Contract of the Century\". On one hand, oil companies from different countries, including the United States have submitted proposals on exploitation of Azerbaijan`s oil and gas fields in the Caspian Sea and cooperate with us. On the other hand, the number of people and forces protesting our oil strategy has increased.

Azerbaijan`s oil strategy includes introduction of our energy resources to the world and offers every country of the world, especially Western nations and the USA wide cooperation in this sector. However, some countries and circles are against our oil strategy. They reckon Azerbaijan`s oil reserves and the Caspian Sea must be under influence of regional powers. They disapprove business of Western nations and the United States in the Caspian region.

As a protest against our oil strategy, the issue on the Caspian status was raised. Some countries claim that the Caspian oilfields can not be exploited unless the status of the sea is determined. Some other actions were also carried out against us.

I can claim that armed coup d`etat attempts, terrorist acts and provocations of 1994 and 1995 were carried out to prevent our independent oil strategy. However, no provocations and various acts against us scared or stopped us. We have consistently implemented our oil strategy. We are very satisfied with our cooperation with Western nations and the United States, and we attach a special importance to this cooperation.

After all those acts against us proved unsuccessful, mass media in some foreign countries, including the USA, Russia and European nations has recently reported as if the Azerbaijani sector of the Caspian Sea possesses less oil than previously informed. Such claims are untrue and against us. Azerbaijan possesses enormous oil resources. So does the Caspian Sea. I guess everyone will see great perspectives of the Caspian and Azerbaijani oil reserves in future.

According to early calculations, Azerbaijan`s oil reserves account from 4 to 10 billion tons. The contracts already signed and to be signed tomorrow suggest investment worth USD 50 billion will be made on Azerbaijani oil industry. USD 2.2 billion has already been invested on Azerbaijani oil industry for the last 3 years; USD 1 billion – by US companies. I believe it is a strong answer to those who protest our oil strategy.

Azerbaijani economy is many-branched. We are forming Azerbaijani economy on the basis of market economy. Democratic, legal, and secular state is being established in Azerbaijan, privatization is being consistently implemented. Agrarian reform is being successfully carried out; almost all lands have been privatized.

Like other ex-Soviet countries, Azerbaijan is also going through transition. Our country is transforming to a new economic and political system from the previous one. Naturally, transition period negatively influences the economy. We prevent it. Even though there are more than one million refugees in Azerbaijan who are unemployed and live in tents, our economy has been developing for recent three years. Since 1990 Azerbaijani economy had been declining by 20% annually. But we stopped the decline and achieved stabilization in 1995. Economic growth has been observed ever since. We also ended inflation in 1995. However, inflation was 1400% in 1994. Inflation has decreased and almost disappeared since 1997. The value of manat, Azerbaijani national currency, is stable now.

Foreign companies, including American firms are interested in Azerbaijani privatization program. We welcome it and invite American businesspeople to take part in privatization in Azerbaijan.

The relations between the USA and Azerbaijan are developing positively. We attach a special importance to our relations with the USA and consider them strategic partnership. At the same time, we want the USA to increase its impact on the Caucasus and to support us more in our activity for independence of Azerbaijan.

As you know, I am here to visit the 50th anniversary of NATO. I have participated in all meetings. Azerbaijan is a participant of NATO`s Partnership for Peace. We attach importance to this program and highly appreciate it. We also approve a new strategic concept proposed by NATO nowadays in Washington D.C.

I can tell you more but I think we should allocate some time for your questions as well.

Question: Mr. President, taking the military conflict between Armenia and Azerbaijan into account, what actions will you carry out in order to prevent any sabotage against pipelines to be constructed?

Heydar Aliyev: We do not construct pipelines on our own. They are built by oil companies that cooperate with us in Azerbaijan. For example, both Baku-Novorossiysk and Baku-Supsa pipelines were constructed by Azerbaijani International Operating Company, a consortium of 11 companies. USD 590 million was invested on the construction of the Baku-Supsa pipeline. That was at the expense of those 11 companies. Therefore, pipelines belong not only to us, but to those companies as well. Together we provide security of pipelines and we will further do it.

Question: Mr. President, what actions are carried out by your government to develop non-oil sector and to protect environment in your country?

Heydar Aliyev: We do carry out a lot of actions. First, we implement privatization. It will encourage and develop non-oil sector, too. Agrarian sector is an enormous part of non-oil sector. It holds an important place in Azerbaijan. We have privatized lands in our country. We already see benefits of effective use of lands. Processing industry of agricultural products is also a very big sector. We have privatized processing enterprises and observe positive results.

Another important sphere, telecommunication will be privatized soon. So will automobile and other transportation spheres. Heavy industry holds a significant place in our economy. Privatization is a bit difficult in chemical, metallurgy and machine-building industries. But we try to develop them. Environmental protection is one of the main problems for us. We pay special attention to it in oil extraction. Issues on environmental protection hold a special place in all signed documents.

Question: Mr. President, are you confident that Turkey will submit suitable proposals for realization of Baku-Ceyhan pipeline? We would like to know what tariffs are implied in Turkey`s latest proposals for export of a barrel of oil and whether you are sure Azerbaijani International Operating Company will agree with these proposals.

Heydar Aliyev: This subject has been thoroughly discussed. Azerbaijani International Operating Company determined the general value of Baku-Ceyhan pipeline USD 3.7 billion; that was economically ineffective. But the Turkish side has also conducted relevant researches and calculations for it. They claim USD 2.4 billion is enough for construction of Baku-Ceyhan pipeline. Azerbaijani International Operating Company states they don`t mind if it is possible to build the pipeline with USD 2.4 billion.

The price of pipeline is being determined now. Tariffs can be dicussed later. The Turkish side states they will ensure construction of Baku-Ceyhan pipeline.

Question: Mr. President, in your speech you didn`t touch upon Transcaspian pipeline. What is the probability of realization of such a pipeline to export Turkmen gas to world market? How can this matter assist in ending disputes between Turkmenistan and Azerbaijan over oilfields?

Heydar Aliyev: I did not touch upon this project as I knew you would ask me about it. We support transportation of Turkmen gas to Turkey via the Caspian Sea, Azerbaijan and Georgia. There is no disagreement between Azerbaijan and Turkmenistan about it. The President of Turkmenistan Saparmurat Niyazov has appealed to me and sent me a letter several times to seek for my approval on transportation of Turkmen gas via the Caspian Sea and Azerbaijan. I approved it on behalf of the Azerbaijani government and replied to him. We also had several phone talk over this matter. There is no problem. I received the American companies working on this project and expressed my approval to them. I think this issue has already been realized.

Question: Mr. President, what is the current role of Russia in the South Caucasus, including Azerbaijan? Does Russia still conduct a policy for violating stability in the region or can Russia play a positive role in solving Abkhazian and Armenian-Azerbaijani conflicts?

Heydar Aliyev: A superpower, Russia is our northern neighbor. We always want the Russian-Azerbaijani relation to remain normal and to develop positively. Russia is one of the co-chairs of the Minsk Group that was created for peaceful solution of the Armenian-Azerbaijani conflict over Nagorno-Karabakh. We wish Russia would accomplish this mission. However, there is no positive result yet. Neither is there a positive outcome in relevant missions of the USA and France either.

What concerns us is that Russia has special relations with Armenia, while Armenia and Azerbaijan are belligerent. It was revealed in the beginning of 1997 that Russia had illegally supplied Armenia with weapons worth USD 1 billion during the previous 3 years. Russian military units are stationed in Armenia and a treaty on military alliance was signed between the two nations. Russian military units in Armenia were granted a status of military base.

In recent months Russia has been stationing new weapons in Armenia, including S-300 missiles, modern MiG-29 fighters. All these actions violate peace and stability in the Caucasus and create a great threat for Azerbaijan. We protest against this policy and actions of Russia. We have expressed our protests in official statements and I have sent Russian President Boris Yeltsin special letters on this matter. On April 2, at the meeting of heads of CIS held in Moscow I protested against Russia`s illegal weapons supply to Armenia, Russia`s military base stationed in Armenia and transfer of new weapons to Armenia and issued an official statement.

There is no need to prove that Russia`s policy and action harm its mission on peaceful solution of the Armenian-Azerbaijani conflict, violate peace and stability in the South Caucasus. As an answer to our protest on Russian military base in Armenia, the Russian government states that it is against NATO, not against Azerbaijan. We evaluate these actions as Russia`s incorrect policy in the Caucasus. Do you see how closely Russia and Armenia are allied?

Question: Last question. How do you see the future of the Commonwealth of Independent States? What can you say about relations between Azerbaijan and CIS?

Heydar Aliyev: The prolongation of the expired treaty on collective security was discussed on April 2, at the meeting of heads of CIS held in Moscow. Azerbaijan, Georgia, Uzbekistan, Ukraine, and Moldova disapproved prolongation and did not sign the treaty. Therefore, only 6 nations remained as members of the collective security treaty – Russia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, and Armenia.

It means, the Commonwealth of Independent States has not been formed as it should be. Its ineffectiveness is obvious. Future will show the rest.

K.Bush (chief of special programs of the Center for Strategic and International Studies): We thank the Azerbaijani President Heydar Aliyev for this honor.

Heydar Aliyev: I am very pleased with this meeting. I invite everyone, who like and dislike Azerbaijan, to our country. I believe, the more you visit Azerbaijan, the more correct and the fairer your information on Azerbaijan would be.

I wish you the best. I wish the United States and its people new successes. Thank you.

Translated from \"Azerbaycan\" (newspaper), April 29, 1999