How Azerbaijan and Mexico could become strategic partners

Azerbaijan and Mexico would seem to have little reason to become strategic partners. The two countries are located far from one another; they lack historic ties, and they are at very different points in their national development. But despite what many would view as insuperable obstacles to cooperation, these two countries have good reasons and even good chances to become strategic partners. And their experience in that regard is instructive for Azerbaijan’s possibilities in other regions of the world as well. Despite their differences, Azerbaijan and Mexico in fact have a great deal in common. They both have long experience with a regional hegemon. Both have had to deal with imperialism and intervention, but both nonetheless have been able to achieve a certain degree of independence and project themselves as nation states. And last but not least, both have significant hydrocarbon reserves that make them important both regionally and internationally.

Another important commonality is their experience with diasporas. Nearly 20 million Mexicans live abroad but maintain strong ties with Mexico. And even more than that number of Azerbaijanis live abroad, although perhaps only about four million of these are actively involved with their national homelands. And yet a third commonality is that both countries in international forums support diplomacy, multilateralism, and the equality of states.

All these things push them together, but even those aspects of their national lives that might appear to push them apart are not necessarily having that effect. Reflecting its geographical location, political history, and economic possibilities, each of the two has a distinctive set of national interests. Baku is still consolidating its statehood by recovering part of its territory, diversifying the economy and increasing political stability, while Mexico has already achieved a solid statehood and now confronts serious issues like organized crime.

Because of these differences, each of these two countries has deployed distinctive political and economic resources to achieve its goals. Azerbaijan is working towards the liberation of some 20 percent of its territory from the Armenian occupation and is trying to secure foreign markets for its oil and gas, while Mexico is trying to become a more influential actor in the Western hemisphere. In this process, Azerbaijan is rapidly ramping up its diplomatic presence around the world, more than doubling its missions since 2004 (Vaisman 2007). But Mexico has been cutting back and focusing its efforts on its region (Millán 2001).

Despite the challenges the two countries face from larger regional powers, the largest factor keeping them from cooperating at present appears to be Mexico’s foreign policy strategy which focuses almost exclusively on that country’s traditional partners like the United States, the European Union and Latin America and which largely ignores the possibility of developing partnerships with others.

soft power (Bohorquez 2005) and public diplomacy. That would involve visits by parliamentarians, cultural diplomacy, academic exchanges, cooperation in fundamental research, and the development of sister-city relations. But at the same time, Azerbaijan cannot afford to neglect official ties (Hardy 1968, p. 14), including the promotion of more visits by high level officials such as the April 2008 visit by Mexico’s deputy foreign minister María de Lourdes Aranda Bezaury to Baku; [1] the establishment of a Mexican honorary consulate in Azerbaijan, and the creation of an Azerbaijani-Mexican House of Friendship in Mexico.

And in both these spheres, Baku can only benefit by stressing the common economic situation of the two countries. Both are major oil producers, with Azerbaijan relying on oil for years of double-digit growth (Bayramov 2008) and Mexico using oil revenues for 40 percent of its government budget (Martínez-Díaz 2008). At the same time, there are differences: Azerbaijan is consolidating its position as a transition economy, but Mexico is already moving toward a more diverse and developed economy. And at the same time, Azerbaijan still depends on exporting secondary sector [2] commodities whereas Mexico is anchored to a more diversified exporting structure, emphasizing on the tertiary sector. [3]

Perhaps more important for the development of future ties is the fact that both Azerbaijan and Mexico face serious risks in the hydrocarbons sector. On the one hand, Ilham Aliyev’s administration copes with the challenge of developing the non-oil sector to guarantee that the economy continues to grow even after the oil prosperity, meeting both short-term expectations and longer-term demands (Center for Economic and Social Development 2007). On the other, Felipe Calderon’s administration faces a severe decline in Mexico’s oil reserves and the urgent necessity to modernize PEMEX.

Clearly, both countries are poised to play a much larger role in an increasingly globalized world. As then Azerbaijani President Heydar Aliyev put it in his speech at the United Nations Summit in 2000, Baku is in a position to make a positive contribution to development of globalization because of its geographic location at the crossroads of Europe and Asia and its own immense resources. [4] In a similar way, Mexico is at the crossroads of the American continents between north and south and also has significant natural wealth. But these advantages also pose challenges because both countries will have to become more open and transparent if they are to benefit from globalization.

So far, both of these countries have made significant strides in that direction. Because of its pipelines, Azerbaijan is now the only country other than Russia and the Middle East states that exports hydrocarbons directly to Europe (Ibrahimov 2008). And Mexico not only has promoted trade ties with the rest of the world, [5] but it has signed free trade accords not only in the Americas but in Europe, Asia and the Middle East (Rodríguez 2006). And both have made the response to globalization a central focus of their foreign policies.

But these trends have not yet led to the development of bilateral trade. As of March 2009, for example, Mexico’s exports to Azerbaijan mounted to only 262,000 dollars - 0.001% of the Mexican total exports – and there were no imports from Azerbaijan registered at all. [6] Changing that and expanding bilateral economic cooperation will lay the groundwork for political ties.

Among the steps the two countries should consider are the following: expanded cooperation in the hydrocarbons sector with Azerbaijan providing technical expertise to Mexico, increased visits by businessmen in both directions, and the establishment of business offices in the two capitals to facilitate economic cooperation and trade. Once those steps have been taken, the two countries should find it possible to create chambers of commerce in both countries, expand cooperation beyond the hydrocarbons sector, and create regional commercial hubs. And on the basis of that alone, strategic cooperation should be possible as well.

[4] Heydar Aliyev, Statement at the United Nations Millennium Summit, September 2000, available at: http://www.un.org/millennium/webcast/statements/azerbaijan.htm (accessed September 16, 2009).

[5] Mexico has free trade agreements with the United States, Canada, Costa Rica, Bolivia, Nicaragua, Guatemala, El Salvador, Honduras, Uruguay, the European Union, Israel, Japan, Iceland, Norway, Switzerland and Liechtenstein.

[6] Banco de México, Mexico’s Trade Balance Data, available at: http://www.bancodemexico.gob.mx/SieInternet/consultarDirectorioInternetAction.do?accion=consultarCuadro&idCuadro=CE86&sector=1&locale=es (accessed 16 September 2009).

Bayramov, Vugar (2008) “Using Oil Revenues Effectively in Azerbaijan”, Azerbaijan in the World, Vol. I, No. 10, 15 June, available at: http://ada.edu.az/biweekly/issues/150/20090327031648590.html (accessed 30 July 2009).

Bohorquez, Tysha (2005) “Soft Power – The Means to Success in World Politics,” UCLA International Institute, 12 January, available at: http://www.international.ucla.edu/article.asp?parentid=34734 (accessed September 19, 2009).

Hyde, Henry (2002) “Speaking to Our Silent Allies: Public Diplomacy and U.S. Foreign Policy”, U.S. Foreign Policy Agenda, Vol. 7, No. 4, December, available at: http://ics.leeds.ac.uk/papers/pmt/exhibits/1458/hyde.pdf (accessed September 19, 2009).

Ibrahimov, Rovshan (2008) “Azerbaijan’s Role in Regional Energy Security,” Azerbaijan in the World, Vol. I, No. 10, 15 June, available at: http://ada.edu.az/biweekly/issues/150/20090327030158055.html (accessed 16 September 2009).

Rodríguez, Angel Villalobos (2006) “The Experiences and Responses of Mexico to Globalization, Challenges and Opportunities,” Secretaría de Economía, October, available at: http://www.oecd.org/dataoecd/59/6/37563939.pdf (accessed 16 September 2009).

Vaisman, Daria (2007) “Azerbaijan Creates Diplomatic Academy,” The New York Times, 11 July, available at: http://www.nytimes.com/2007/07/11/world/europe/11iht-azeri.4.6617266.html?_r=1 (accessed September 19, 2009).

Source: http://biweekly.ada.edu.az/vol_2_no_24/How_Azerbaijan_and_Mexico_could_become_strategic_partners.htm