Azerbaijan: Ties with Pakistan Focusing on Arms and Energy
Azerbaijan’s diplomatic contacts with Pakistan have intensified over the past year, with a particular focus on military and energy cooperation. But it remains unclear to what degree this developing partnership is being driven by realism, and how much by romanticism.
The last 12 months have seen a marked increase in diplomatic visits and discussions between the two countries. Pakistan’s Prime Minister Muhammad Nawaz Sharif visited Baku in October, and Azerbaijan’s President Ilham Aliyev reciprocated with a trip to Islamabad from February 28-March 1, attending a summit of the Organization of Economic Cooperation.
Bilateral trade between the two countries currently stands at a modest USD 7.3 million per year, but Pakistan has reportedly drafted a plan to increase that figure to USD 500 million over a five-year period. Azerbaijan has for the first time begun to set up permanent trade missions in embassies, and it chose Islamabad as a location for one of the first such missions, along with Moscow, Ankara, and Washington. Long-dormant talks on arms sales have been revived, and new energy projects mooted.
Behind this flurry of activity, there are doubts about the viability of substantive cooperation. Baku’s interest may be connected to notions of Muslim solidarity and Pakistan’s strong diplomatic stance against Azerbaijan’s foe, Armenia.
Pakistan was the second country (after Turkey) to recognize Azerbaijan’s independence in 1991, and has still failed to recognize Armenia, saying that Islamabad will not do so until Armenia gives up its claim to Nagorno-Karabakh. Azerbaijan has reciprocated with strong support for Pakistan in its struggle with India over Kashmir.
Azerbaijan’s courting of Pakistan accelerated after last April’s outbreak of violence with Armenia over Karabakh, the worst bout of fighting since a ceasefire was signed in 1994. Pakistan has become one of many sources of contention between the two sides. In November, for example, Armenia blocked Pakistan’s attempt to build ties with the Collective Security Treaty Organization, a post-Soviet security bloc that includes Armenia, but not Azerbaijan.
Recent discussions between Azerbaijan and Pakistan have focused primarily on the arms trade, but each side has different interests. From Baku’s perspective, it wants to take advantage of Pakistan’s relatively highly developed defense industry to establish joint ventures under which Pakistani firms would set up production or assembly facilities in Azerbaijan. This is the strategy Azerbaijan has used to build up its own domestic defense industry, so far with notable contributions from Israel and Turkey.
“Pakistan has a very developed defense industry. We discussed detailed cooperation in this area... So we can work together to establish joint production,” Aliyev said during Sharif’s October visit to Baku.
Thus far only one such agreement seems to have been reached, with Pakistan’s Global Industrial & Defense Solutions to produce hand-held grenade launchers. “A certain agreement on this issue exists with the Defense Industry Ministry of Azerbaijan,” said the company’s CEO, retired Major General Tariq Javed.
Pakistan’s interest, meanwhile, appears more focused on direct arms sales to Azerbaijan. There is a particular emphasis on marketing the Chinese-Pakistani JF-17 fighter jet to Azerbaijan. This has been discussed between the two sides for at least a decade, but discussions have seemed to pick up steam over the last year. Pakistan intended to display the JF-17 at Azerbaijan’s defense expo, ADEX, last September, but “difficulties with delivery and customs forced us to abandon the idea,” said the aircraft maker’s sales and marketing director, Sohail Saeed Naik. Pakistan also has been promoting the Super Mushshak trainer aircraft to Azerbaijan.
Fighter aircraft are not a high priority for Azerbaijan, which instead is focusing its procurement attention on ballistic missiles or on offensive weapons. That could include another Pakistani product, one of the Shaheen class of medium-range ballistic missiles. Azerbaijan’s interest in Pakistani missiles was first reported in 2014, but talks seem to have accelerated after it emerged last year that Armenia had acquired Iskander missiles from Russia.
Bilateral military cooperation for the moment is limited to relatively modest educational exchanges. In 2015, 130 Azeri defense personnel received training from Pakistan, according to Pakistan’s ambassador to Azerbaijan, Khalid Usman Qaiser.
In the energy sphere, too, Azerbaijan and Pakistan have expressed interest in cooperating, but their specific motivations may not be compatible. In April 2016, Pakistan and Azerbaijan drafted an inter-governmental agreement (not yet signed) calling for Azerbaijani sales of oil and gas to Pakistan, as well as Azerbaijani investments in Pakistan’s petrochemical sector.
Pakistan’s primary interest appears to be in importing oil or gas from Azerbaijan. This is theoretically possible, but it would involve complicated gas swaps with Iran, and Baku seems to have little interest in such convoluted arrangements. Azerbaijani officials question the logistics and economics of exporting to Pakistan, given the export commitments it has already made to Europe.
Azerbaijan, then, has tried to gently downplay the potential for significant energy exports to Pakistan. The Azerbaijan-Pakistan energy deal will “allow companies to start talks, and business and trade would materialize only if found economically and logistically feasible,” Azerbaijan Energy Minister Natig Aliyev said during the ECO summit in Islamabad.