Azerbaijan’s capital of Baku recently hosted visits by dignitaries and officials from the North Caucasus. Late last year, Dagestani President Ramazan Abdulatipov arrived in Baku to foster cultural and political ties with Azerbaijan. Media reported that his visit was of significant political and economic importance to Azerbaijan.
While the Azerbaijani government supports the concept of open borders with Dagestan, it notes that the country’s safety is the key priority. Dagestan is one of the most volatile regions in Russia’s restive North Caucasus, and it is concerned that extremism and arms might cross the border. Some Dagestani militants have sought to enter Azerbaijan’s remote northern regions and the government is concerned. Thus, Baku has expressed an immense interest in forging closer cooperation with the Dagestani security services.
Abdulatipov is viewed as an “old-hand” by Azerbaijan’s leaders. Well-versed in Russian, Dagestani, and Azerbaijani politics, he has been tasked by Russian President Vladimir Putin with “cleansing” Dagestan of its terrorist problem and reducing unemployment, which is higher in Dagestan than any other Russian region.
But Azerbaijani-Dagestani relations were complicated as well last year by Abdulatipov’s membership in an organization backed by the Russian government. The Russian Organization of Azerbaijanis formed in 2013 sought to influence Azerbaijan’s presidential election. His membership caused great concern among the Azerbaijani authorities, who believed that, as a Dagestani, Abdulatipov had no place in Azerbaijani politics.
Despite this political misstep, Abdulatipov is heavily interested in investments from Azerbaijan. As such, during his visit to Baku, he and Azerbaijani President Ilham Aliyev discussed economics and finance. The Azerbaijani government has already invested in neighboring Georgia and Turkey and even European states like Romania and Switzerland. Its investments range from plants and petroleum storage facilities to gas stations.
Baku is interested in opening its borders with Dagestan to facilitate the transport of agricultural products from Azerbaijan to Russia. However, it seems the Azerbaijani government is not yet willing to invest in Dagestan. There are two major reasons why investment interest is so low in the North Caucasus. First, the region is riven with terrorism and political instability. Second, Dagestan, Chechnya, Ingushetia, and North Ossetia are almost entirely subsidized by the Russian government – so how would they pay Baku back?
In past years, Azerbaijan has carefully chosen its partners in Russia. Azerbaijani investors conduct business in Astrakhan and Volgograd, which are relatively stable if one does not take into account the terrorist attacks in Volgograd in late 2013. Even in such cases, Baku prefers not to take risks. In the meantime, the Heydar Aliyev Foundation, an Azerbaijani non-profit with close ties to the presidential administration, is building parks and schools in these cities. Serious investments and joint projects have yet to be executed.
Dagestan is not the only region in the North Caucasus seeking investments from Azerbaijan. In the past two years, Chechen President Ramzan Kadyrov and Russia’s Presidential Representative in the North Caucasus Federal District Alexander Khloponin have each visited Baku. The discussions during these visits revolved around investment and mutual economic projects. While not making any deals with either political leader, Azerbaijan took the reciprocal step of sending a government delegation to Chechnya. With Azerbaijan pursuing a diligent investment policy, Dagestan might have to concentrate on growing domestic stability before attracting significant investment interest among the Azerbaijani government and private sector.