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  • Developments in recent years have proven that Russia is both the most fluid element in Azerbaijan’s foreign policy and the least understood by outsiders. The roles of different parts of the Azerbaijani political elite in shaping the relationship with Russia have by turns been exaggerated and underestimated, further obscuring the political reality.
  • Azerbaijan’s post-1991 foreign policy initially functioned as a ‘balancing act’ between Russia and the West. The government avoided military alliances and full-fledged regional economic integration with either side, but gave preference to the West in energy cooperation and – notwithstanding an immediate post-independence Russia orientation – relied on Western political support to diminish Moscow’s power projection.
  • The relative disengagement of the West – especially the US – from regional affairs from 2008 onwards was a serious blow to this balance. It gradually led Azerbaijan to a policy of pacifying Russia, especially following the latter’s annexation of Crimea in 2014, and to a rejection of genuine integration with the West. It paved the way for the re-emergence of Russian soft power in Azerbaijan. Western ignorance of the region and tendencies to view developments in Azerbaijan solely through simplistic, liberal democratic lenses risk accelerating the growth of this influence, and encouraging interest groups in the ruling elite to advocate closer alignment with Moscow.
  • As Russia has strengthened its power projection in the South Caucasus, the response from the leadership in Baku has been strategically flawed. Azerbaijan believed that it could benefit from Russia’s rising geopolitical assertiveness, in particular perceiving Russia as a key player in any effort to resolve the Nagorny Karabakh conflict. The Azerbaijani leadership mistakenly thought that Russia would change its attitude and support resolution of the conflict to Azerbaijan’s advantage. As a result, Azerbaijan gradually moved from total rejection of the possibility of joining Russian-led economic integration and security alliances to seeing membership (at least, in the economic sphere) as a possible compromise that would support its agenda over Nagorny Karabakh.
  • A foreign policy strategy – as advocated by certain interest groups in the Azerbaijani ruling elite – that involved joining Russian-led economic or military alliances would be a mistake. Its proponents exaggerate Moscow’s ability to help deliver a lasting political settlement in Nagorny Karabakh, and underplay the changing dynamics of the situation on the ground. A better alternative would involve Azerbaijan embracing the opportunities for reconciliation opened up by the recent change of government in Armenia, especially if the latter were to offer direct bilateral negotiations. This could limit Russia’s influence and potential role in any peace agreement.
  • Economic overdependence on the energy sector and a lack of economic and political reforms have made Azerbaijan’s leadership heavily dependent on the price of oil. Economic collapse, should it occur, has the potential to pitch the country into chaos, further boosting Russia’s influence.
  • The West can help Azerbaijan to strengthen its position – or, at least, preserve the traditional geopolitical balance with Russia – by supporting policy and institutional reforms, economic diversification and integration with the West, and by adopting a more nuanced approach to diplomacy in the region.
  • Azerbaijan, too, will need to do its bit in the coming years to achieve domestic stability and reduce dependence on Russia. This will require genuine political and economic reforms – necessary not only to avoid a worst-case scenario of political chaos, mass public protests and/or economic collapse, but also for the country to regain international respect, which has been damaged in recent years.