By Bay Fang

Today, Azerbaijan
May 1 2006

President's Aliyev interview to U.S. News & World Report edition.

The President of Azerbaijan, Ilham Aliyev, had a lot to discuss with
President Bush last week. Not only does the small Muslim nation occupy
a strategic location between Russia and Iran at a time when tension
between the United States and Iran is high, but it is also on the verge
of a huge oil boom. This summer, a 1,000-mile pipeline originating in
Azerbaijan will begin pumping oil across three countries to a Turkish
port on the Mediterranean Sea. Aliyev spoke to U.S. News about these
developments and about how he hopes Washington will help resolve the
country's decade-long conflict with Armenia.

How will the completion of the Baku-Tbilisi-Ceyhan pipeline affect
world oil and gas markets?

This pipeline means we will be able to produce more oil and deliver
it to world markets. When we started building it five or six years
ago, oil prices were not as high as they are today. Now, it becomes
more and more important for the world's energy security. It is a new
route that will deliver oil from the Caspian to the Mediterranean,
which has never existed before.

Is it possible to quantify the effect on the markets?

The pipeline will transport at least 1 million barrels of oil a day
in 2008. In the future, the pipeline's capacity can be expanded;
it will depend on the level of production. It has huge potential.

How do you avoid what some people call the "oil curse"?

We are very determined to use oil wealth to develop a strong economy,
and not to depend on oil and oil prices in the future. To achieve that,
we need to have a high degree of transparency in accumulating and
spending oil wealth. Azerbaijan is a leading country in the Extractive
Industries Transparency Initiative, which has a main goal of having
transparent accounting.

How does Azerbaijan see itself developing as a secular democracy? As
a secular state with a predominantly Shiite population, can it be a
model for Iran?

What we do and what we plan is not aimed at being used as an example.

It is just for the sake of the people of Azerbaijan, for the
development of our country. We are secular not only by constitution
but by our lifestyle. It is a very good example of how representatives
of various nations and allegiances can live together in peace and
autonomy. We have a predominantly Muslim population, but at the same
time we have substantial Christian and Jewish communities.

What other democratic reforms are coming up?

Azerbaijan over the last five years has adjusted most of its
legislation to the standards of European countries. All of the
basic political freedoms are available; political institutions are
becoming stronger. At the same time, they should be accompanied by
strong economic reform. When people are poor, they think not about
democratic development but about day-to-day needs. Last year we had
a GDP growth of 26 percent, the highest in the world.

Was the GDP growth mostly in the oil sector?

It was 12 percent in the non-oil sector, 14 percent in the oil
sector. We are trying now to diversify the economy. Oil will come to
an end sooner or later, so the country's long-term development should
not depend on oil.

You have said that the United States' standoff with Iran should be
resolved diplomatically. But if the United States decides to react
militarily to Iran, what will Azerbaijan's reaction be?

We still hope that it will be resolved in a diplomatic way. The other
option may lead to catastrophe in the region and may damage all the
positive trends and prospects for cooperation and development.

Azerbaijan, for more than a decade, has had part of its territory under
Armenian occupation. And all of the advice in the West is to resolve
it peacefully, despite the fact that 10 years of negotiations led
to no results. Therefore, we also think that in this case a peaceful
solution, patience, diplomatic efforts should be tried until the very
possible end.

Do you have high hopes for the resolution of the Nagorno Karabakh

On the one hand, we've been in a cease-fire regime for 12 years.

Despite various periods of negotiation, no result. That does not add
optimism. But on the other hand, the latest activity of mediators,
including the U.S. and Russia, creates hopes. But to resolve it,
both sides need to stick to international law and principles:
Occupied territories of Azerbaijan should be returned without any
preconditions. And the millions of Azerbaijanis who suffered from
the policy of ethnic cleansing by the Armenian government have the
right to return to their homeland.

How will Azerbaijan's role in the war on terrorism change because of
the U.S. loss of the K2 air base in Uzbekistan last year?

We joined the antiterror operation as soon as the United States
invited allies to join. We are still committed to the partnership. We
have our soldiers serving alongside U.S. soldiers in Kosovo, Iraq,
and Afghanistan. This policy has not changed at all. The role of
Azerbaijan as the United States' ally in the region is significant,
and the significance of this role may change due to circumstances
that develop, but our policy is not changed based on it.

URL: http://www.today.az/news/politics/25652.html