Alwaght- Seeking to increase influence in other countries through financial aids and investment by petrodollars, Saudi Arabia in recent years has paid a special attention to Caucasus. This region, which is of great significance especially after start of Ukraine war, is the acting scene of Saudi Arabia’s two key rivals Iran and Turkey. Meanwhile, Azerbaijan is a country that has the highest level of relations with the Arab kingdom compared to other Caucasusian countries.
In this regard, on Monday, the two counties held their seventh investment forum in the Azerbaijani capital Baku. According to a report by the Saudi news agency, the activities of this forum included presentations on bilateral investment and discussion of a number of issues with the aim of strengthening bilateral relations in various sectors.
Welcoming the Saudi delegation, President of Azerbaijan Ilham Aliyev highlighted the importance of the Baku-Riyadh business meeting, stating that the agenda of bilateral cooperation is expanding. The Saudi Minister of Investment and Co-Chairman of the Saudi-Azerbaijan Inter-Governmental Commission Khaled bin Abdulaziz al-Falih expressed his hope that the meeting would boost their relations. The officials of the two sides also stressed the importance of broader economic cooperation and discussed the participation of Saudi companies in renewable energy production projects in Azerbaijan. In January 2022, Azerbaijan’s Ministry of Energy announced that the Saudi company ACWA Power had started construction of a plant to generate power from wind north of the capital with investment worth about $300 million.
The head of the Saudi delegation held that his country was interested to invest in renewable energy projects, as well as agriculture of Azerbaijan.
A record of their bilateral relations
The first investment and business forum of Saudi Arabia and Azerbaijan was held in September 2014 in Baku under the slogan ‘Arab capital flow to the Republic of Azerbaijan’ and one hundred Saudi companies discussed with Azerbaijan counterparts the investment development strategies of the two countries. The capital of Saudi companies were supposed to be spent on sectors of construction, services and hotel construction, tourism and food, and industrial production in Azerbaijan. Based on a MoU Riyadh and Baku agreed to analyze each other’s economic capabilities and base their economic activities on it. In December 2021, the forum held its sixth meeting in Riyadh and discussed strengthening partnership in economy, trade, investment, technology, culture, and youth.
Their economic relations have grown as the forums continued to be held. According to figures, Saudi Arabia now invests $370 million in Azerbaijan’s economy and infrastructure, and as the cooperation continues, a positive outlook for bilateral relations emerges. About 26 Saudi companies are active in business with Azerbaijan, and the Saudi Development Fund is actively involved in the construction of local infrastructure, including canals and roads, schools, water supply, and sewage systems.
In 2019, their trade grew 33 percent and the next years recorded higher growth rates. Their trade volume in 2021 was around $30 million. For the Saudis, this is not enough and they eye higher-rate volumes, and the forums can help. The indicators of the State Statistics Committee of Azerbaijan regarding the country’s trade with Saudi Arabia show that Azerbaijan imports most of the livestock products, including meat and cheese, as well as petrochemical products, from Saudi Arabia, and exports metals and agricultural products to it.
Azerbaijan has great capabilities in energy sector and economic infrastructure that are found attractive by foreign investors. The active presence of Saudi Arabia in Azerbaijan is also driven by the global changes and developments in recent months. The normalization of Saudi relations with Turkey, as Baku’s main ally, has played an important role in Riyadh’s updated economic agenda in Azerbaijan. Saudi Arabia recently announced that it plans to invest $5 billion in Turkey’s economy, and it seems that Turkish President Recep Tayyip Erdogan has played an important role in strengthening relations between Riyadh and Baku. Due to Azerbaijan’s strategic location in Caucasus and its proximity to Central Asia, Saudi Arabia can draw on the country’s potentials to advance its ambitious projects in this region. The Saudi investment in Azerbaijan’s energy is driven by the huge profits the kingdom makes from this sector. Actually, investment in this vital sector allows Riyadh to influence in Baku’s policies.
Having in mind that the two countries are also members of in OPEC+, increasing cooperation in energy sector is what Riyadh is looking for. Observers suggest that one of Saudi Arabia’s goals behind expanding energy partnership with Azerbaijan is to gain a share in gas and petrochemical projects of Azerbaijan, in addition to ensuring that Baku follows Riyadh’s policies regarding oil prices and production quotas. Undoubtedly, the more investment in infrastructure, the more Saudi influence in Azerbaijan.
Promoting Wahhabi thought
The Saudi presence in the Muslim countries, especially Shiite-majority nations, is driven by religious and cultural motivations in addition to economic profits. Azerbaijan as a Muslim country is no exception. Over the past years, the Saudis went to great lengths to propagate extremist Wahhabi thought in the Muslim countries to sway the Muslim vision.
After the declaration of independence of Azerbaijan in 1991 and at the same time as the chaos and economic problems rocked people, Wahhabi institutions entered this country under the guise of providing aid and charity. According to the reports, Saudi Arabia also started attracting students of religious studies in the Islamic University of Madinah to promote Wahhabi movement in Azerbaijan from the very beginning and has been able to create a Wahhabi movement through the educated Azerbaijanis of the Islamic University of Madinah. In the last two decades, the flow of Wahhabi missionaries to Azerbaijan has also increased, and some sources estimate the number of Salafis based in Azerbaijan are more than 50,000, with some of them engaged in promoting Wahhabi ideology. The more Salafi and Wahhabi thought expands in Azerbaijan, the easier it will be for the Saudis to enter this country and align it with Riyadh policies.
On, the other hand, the Azerbaijani government has paved the way for the Saudi influence. In recent years, the government imposed heavy restrictions on religious activities of the Shiites and annual marking of Ashura in the public places. Baku government’s antipathy to Shiite faith provides a good opportunity for Saudis to promote Wahhabism.
Regional and political goals
With Caucasus having gained considerable importance over the past years, the Saudis are rushing for a share of influence in this region. Although the kingdom has taken almost a neutral stance in Azerbaijan-Armenia tensions boosting economic and military ties with Baku indicates that the Saudis are more leaning to Azerbaijan than to Armenia. Azerbaijan and a large part of Caucasus and Central Asia and even Turkey being Muslim compared to the Christian-majority, Western-backed Armenia is naturally not ineffective in pro-Azerbaijan tendency of Saudi Arabia that claims Muslim world leadership. We can even talk about Riyadh’s opportunist approach to the escalating tensions between Iran and Azerbaijan in recent months, though the Saudis have remained officially neutral in Central Asian tensions.
From another perspective, Azerbaijan’s location on the edge of the Caspian Sea also allows Saudi access to this sea. The importance of the Caspian Sea has increased after Ukraine war, and in the future it will play an important role in the transit of goods between East and West and North and South. By developing its relations with Baku, Riyadh can play an effective role in energy transfer from the Caspian Sea, which are aimed at cutting Iran off the region.
Another issue is the vast Azerbaijani relations with Israel. Baku has established close military ties with Tel Aviv and last month opened its embassy there. This fits the policy of Saudi Arabia that is in the course of normalization with the Israelis. These three actors are currently on a confrontational mode with Iran and their gathering in a common camp on the borders of a common enemy bolsters their position.
