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Energy is an Area in Which Azerbaijan and the EU Share a Mutual Interest

Energy is an Area in Which Azerbaijan and the EU Share a Mutual Interest

Rovshan Pashazadeh’s interview with Ambassador Roland KOBIA, Head of Delegation of the European Union to Azerbaijan

A.T.: If there were not Nabucco on the agenda of European Union, how important player would be Azerbaijan in the energy policy of EU?

The Energy sector is an important one as such in the relations between Azerbaijan and the European Union. We have a Memorandum of Understanding since 2006, which covers a wide range of areas, well beyond Nabucco and the gas sector. It covers the development of Renewable Energies and of Energy Efficiency amongst others. We want to support Azerbaijan in diversifying its energy situation besides the oil and gas sector. And we also have European companies here that are main investors in developing Azerbaijan’s full export potential.

Of course, the gas sector is important and will further the already good relations we have in the oil sector. This is an area in which Azerbaijan and the EU share a mutual interest, and even an inter-dependence. Indeed, Azerbaijan needs to diversify its customers and its export routes; in this regard, as a supplier Azerbaijan needs reliable and solvent clients. For its part, the EU as an energy consumer and buyer needs to have reliable and diversified suppliers. Both parties, though at different stages of the chain, share the same interests. The EU is interested in establishing an Energy Corridor between Azerbaijan and the Caspian Basin on the one hand, and the European Union markets on the other. There are various options on the table to make that corridor a reality. We count on Azerbaijan’s continued commitment to help us develop the Southern Corridor as an ambitious and forward-looking initiative envisaging the eventual supply of large volumes of gas not only from Azerbaijan but from the wider region to Europe. The EU and Azerbaijan are also involved in development different other projects, by land or sea. All that makes Azerbaijan a key player as a producer and a transit country for the energy policy of the EU.

A.T.: In 1991, when regaining its independence, Azerbaijan expressed its will to seek reinforcement of mutual relations with the Western World. Certainly civil society plays considerable role in this. It is the second decade of the XXI century. How close have our societies advanced to each other in their attitudes?

 I would like to recall that the European Union, and its Member States, has responded to Azerbaijan’s request in the very early stages of Azerbaijan’s independence. Azerbaijan indeed took the political option to deepen its relation with the West, and we have responded positively. The European Union has therefore been present to support Azerbaijan as from the early 1990’s. In that relation, the contacts between public institutions have been strong and increasing over time. But civil society also plays an important role in our societies today. They provide another angle of analysis, another point of observation. They monitor the public life and try to raise awareness on any improvements deemed necessary. They bring in new proposals and hold governments accountable. They are actively involved in promotion of democratic values such as respect for human rights, fundamental freedoms, the rule of law and good governance in general. And those are also the values of the Eastern Partnership initiative which we implement jointly with Azerbaijan. Let me give you one example: to support the development of Civil Society Organizations, the European Commission created in 2009 the Civil Society Forum, which brought together representatives of 141 organizations from Eastern Partnership countries. Since then, the Forum has provided a platform for debate and has develop a set of common recommendations in areas such as democracy, human rights, good governance, economic integration and convergence with the EU policies, environment, climate change, energy and contacts between people.

In Azerbaijan today there is a growing understanding and support for the values on which the EU and the Eastern Partnership are based.

A.T.: In 2010 the European Union began two new Budget Support programme with Azerbaijan. How far will this project deepen Azerbaijani-European relations? What kind of plans are to be realized in the frame of this project the next year?

 First, let me tell you that the EU Budget Support Program is one of the financial instruments developed by the EU to implement its programmes with the neighbouring countries. There are many other instruments that are working very well in Azerbaijan, for example Twinnings (long-term secondments of EU experts to Azerbaijani Ministries and public authorities). Budget Support is flexible and allows the EU to support government programme in specific sectors – in Azerbaijan this will be about Energy, Justice and Agriculture/Rural Development. Up to now we have initiated 3 Budget Support programmes in those three areas.

Very recently, in September 2010, the EU released its first tranche of €3 million to the Government of Azerbaijan within the Sectoral Budget Support Programme on Energy. This marked the beginning of our cooperation in the framework of a Budget Support Programme. The objective is to assist government’s efforts to develop a fully coherent, integrated and transparent energy strategy for the future. But our support will also focus on the promotion of energy efficiency and renewable energies in Azerbaijan. Although it is too early to talk about the impact of this initiative on Azerbaijan-European relations, we expect that the Azerbaijani government will make full use of the support provided.

A.T.: Russia holds regular negotiations with different European countries on abolition of visa system with the aim of reinforcement of mutual relations with Europe. President Ilham Aliyev also mentioned considering the opportunities to facilitate the visa procedures for the citizens of Azerbaijan, since current border crossing rules influence negatively on rapprochement between Azerbaijan and Europe. What do you think? Is it not the right time to reconsider these procedures?

 The EU understands that mobility issues, and notably visa facilitation, is important to Azerbaijan and to its citizens. The EU is willing to promote more interaction between citizens of the EU and Azerbaijan, and we have already responded to the country’s interest: we are exchanging on those matters in our political dialogue and have organized working meetings with relevant institutions and agencies. As you may know, the EU and in particular the EU Foreign and Security Policy High Representative Catherine Ashton made lots of efforts in that direction over the past months. Back in December 2009, the EU and Azerbaijan had their first meeting on visa liberalization. Getting closer to the EU means both a strengthening of our cooperation at institutional level and at peoples’ level. The EU is in Azerbaijan with a political, economic but also a social and cultural agenda. The negotiations on the visa facilitation could start already early 2011 if the conditions are met.

However, let me stress that visa liberalization is an issue that needs to be accompanied by some homework on both sides. It notably goes hand in hand with readmission agreements, and requires a number of reforms of a technical nature in the field of migration and border management. The European Union stands ready to provide Azerbaijan all the necessary assistance in this regard. Once the technical details are worked out and the necessary decisions taken, the visa facilitation/readmission agreement will be concluded. As a result a large number of Azerbaijani citizens – scholars, students, businessmen, sportsmen, artists and many others – will have a simplified access to the EU countries. This will help build bridges between Azerbaijan and the EU.

A.T.: According to statistical data 90% of commodity turnover between Azerbaijan and EU consists of trade on oil and oil products. Does EU have any plans on development of economic relations with Azerbaijan and notably establishing lasting ties with private sector of our country?

You are right. Currently the main area of trade between Azerbaijan and EU is about oil and is mainly driven by the EU energy needs. This trend will probably continue for a while as EU’s energy import needs will not be decreasing, as we have seen from the scenarios of the 2010 World Energy Outlook of the International Energy Agency. As energy demand is expected to rise quickly once the recession ends, the EU aims to prevent shortages and to stimulate the economic recovery in the Union. Our energy relation with the region will continue to grow. No later than on 11 November, the EU adopted Energy 2020 strategy. This is our plan to cut energy consumption, boost market competitiveness, improve inter-connections, secure energy supplies and coordinate negotiations with suppliers.

But the EU is also interested in supporting Azerbaijan efforts to diversify its economy. It is also in our interest as we have in the EU very competitive firms and industries that can bring a lot to Azerbaijan, in many areas. The launch of the negotiation process on the Association Agreement with Azerbaijan, in July 2010, definitely mark a new era of our cooperation with Azerbaijan and our willingness to do more than energy. The EU has very tempting trade offers – the establishment of deep and comprehensive free trade area with our neighbouring countries- as a key instrument to provide Azerbaijan with access to the EU market of 500 million stable and rule-based consumers. This will contribute to increase trade and investment between the EU and Azerbaijan and will help generate further economic growth and jobs in sectors other than energy. One condition however is that this will only apply if Azerbaijan becomes a member of the WTO. As you can imagine, we are following closely the progress made in the WTO accession process: a lot of our future relations will depends on this.