Azerbaijan

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Overview
A former Soviet Socialist Republic, Azerbaijan lies in one of the more complicated post-Soviet areas. Situated between powerful neighbors Russia and Iran, the moderate Muslim country also shares borders with Georgia and with Armenia, with which it has been engaged in an armed dispute over the Nagarno-Karabakh region since the end of Soviet rule. Armenia maintains control over the disputed region, as well a significant portion of Azerbaijan-proper that was subsequently gained in the struggle. As a result of the conflict, hundreds of thousands of Azerbaijanis have been internally displaced.
 
Baku in Azerbaijan is the site of the world’s first oil well, and the country’s potential for significant oil wealth is no secret. In fact, recent exploitation of the vast reserves has caused a dramatic upswing in Azerbaijan’s economy. According to the CIA World Fact Book, a massive project begun in 2006 by Western oil companies (1 million barrels a day through a $4 billion pipeline from Baku to a Turkish port) could double Azerbaijan’s GDP by 2010. The pipeline is the second largest in the world.
 
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Basic Information
Lay of the Land:
Located in Southwest Asia, Azerbaijan is a mountainous country bordering the Caspian Sea, Iran, Georgia, Armenia and Russia. In the Southwest, the Kur-Araz Ovaligi lowlands lie mostly below sea level, and the Great Caucasus mountain range runs through the North of the country. Slightly smaller than Maine, it is the largest and most populous country in the South Caucasus.
 
Population: 8.2 million
 
Religions: Shi’a Muslim 62.4%, Sunni Muslim 33.6%, Christian (predominately Russian Orthodox) 2.3%, Jewish 0.2%.
 
Ethnic Groups: Azeri 90.6%, Dagestani 2.2%, Russian 1.8%, Armenian 1.5%, other 3.9%
 
Languages: North Azerbaijani (official) 76.8%, Talysh 10.1%, Lezgi 2.2%, Avar 0.6%, Tsakhur 0.2%. There are 14 living languages in Azerbaijan.
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History
Conquered by the Arabs and converted to Islam in the 7th century, Azerbaijan was also largely shaped by the convergence of Seljuk Turk and Ancient Persian cultures.
 
After Russian and Persian powers fought over the territory for several centuries, Azerbaijan was divided between Turkey and Persia in the late 19th century. Exploitation of the country’s oil fields led to a prosperous period preceding WWI, and Azerbaijan briefly became an independent republic in 1918. However, the Soviet Army invaded two years later and declared Azerbaijan a Soviet Republic soon after.
 
Toward the end of the Soviet era, Azerbaijan became engaged in a struggle over the Nagorno-Karabakh region, whose population of mostly ethnic Armenians sought to become part of Armenia in 1988. Ethnic strife in the region escalated in the following years, with casualties and a gradual exodus from both sides–ethnic Azeris fleeing Nagorno-Karabakh and ethnic Armenians fleeing Azerbaijan. In 1991 Azerbaijan launched a military offensive after the Nagorno-Karabakh leadership declared itself an independent republic. A 1994 ceasefire between Armenia and Azerbaijan left ethnic Armenians in control of the disputed territory, as well as a surrounding part (about 16%) of Azerbaijan-proper.
 
Also in 1994, Azerbaijan signed its “Contract of the Century,” an agreement with a consortium of Western oil companies to tap offshore oil fields and run oil through a pipeline stretching through Georgia to Turkey. The project was inaugurated in 2006, when the Baku-Tbilsi-Ceyhan (BTC) pipeline officially opened.
 
In 1995, Azerbaijan held its first multi-party elections, which observers claimed were marred by corruption and irregularities, failing to meet international standards. Another election in 2000 was equally dubious.
 
After the attacks of September 11, 2001, the U.S. lifted a military aid ban it had imposed on both Armenia and Azerbaijan (in response to the Nagorno-Karabakh dispute) when the countries began providing airspace for its military operations in neighboring Afghanistan and Iraq.
 
In 2007, Azerbaijan threatened another military offensive if a comprehensive peace accord wasn’t reach in 2008. The spring of 2008 saw an escalation in armed conflict in the Nagorno-Karabakh region, with each side blaming the other for initiating the scuffle, which caused several casualties on both sides.
 
Many observers point to the upcoming October 2008 presidential elections as a source of additional pressure on the conflict. Azerbaijani president Ilham Aliyev has reportedly tapped into a reserve of nationalist fervor over the unresolved Nagorno-Karabakh issue in an attempt to deflect the spotlight from his regime’s failure to address the countries outstanding social and economic issues.
 
Azerbaijan is also using BTC pipeline revenue to build its military, a venture now aided by the U.S. According to a recent Stratfor report, Azerbaijan’s military budget leapt from $175 million in 2004 to more than $1 billion at the start of 2008. And by April 2008, the country announced its military expenditure had reached $2 billion.
 
 

 

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History of U.S. Relations with Azerbaijan
U.S. relations with Azerbaijan really begin with its independence in 1991 from the Soviet Union. As with many former Soviet states, the U.S. established diplomatic relations with Azerbaijan shortly after, and funded massive market liberalization schemes to aid the country’s transition to capitalism…and prime it for U.S. investment. The two countries are party to bilateral trade and investment agreements.
 
Since the mid-1990s when Azerbaijan began brokering its oil deals with Western consortiums, the U.S. government has taken a renewed interest in the otherwise peripheral state.
 
The U.S. has also been active in negotiations between Azerbaijan and Armenia in the Nagorno-Karabakh dispute, viewing Azerbaijan and other South Caucasus states as increasingly important to its security interests in the region. In turn, Azerbaijan has looked to the U.S. to bolster its independence from its former patriarch and traditional ally, Russia.
 
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Current U.S. Relations with Azerbaijan
Sitting on some of the largest oil-and-gas reserves in the former Soviet Union, Azerbaijan has become an important ally and security concern for the U.S. It is also one of the countries through which oil is pumped to the West without going through Russia, which many observers speculate feeds into the current conflict in Georgia, if it is not actually a direct cause of it.
 
With Russia showing its muscle in Georgia, a key transit state through which oil from Azerbaijan runs to Turkey and on to Europe and the U.S. (through the BTC, the world’s second-largest oil pipeline), former Soviet states in the surrounding area are concerned about security and autonomy, while the U.S. is concerned about keeping oil flowing securely without going through Russia. Thus some speculate that Azerbaijan and others are caught in the “New Cold War.”
 
On a September 2008 trip to the South Caucasus, U.S. Vice President Dick Cheney assured Azerbaijan of his government’s “abiding interest” in regional stability. However, according to a report by The Moscow Times, Cheney failed to gain Azerbaijan’s support for a new gas pipeline that would transport oil from the Caspian Sea to Western Europe, bypassing Russia. According to the article, which cites a Kommerset report (which itself cites an official in the Aliyev administration), Azeri President Ilham Aliyev did “not want to anger Russia” in light of its current invasion into neighboring Georgia.
 
While South Caucasus states are wary of Russia, Western powers are concerned over the disruption caused by the conflict (the BTC and other pipelines were temporarily closed down), and the threat of further interference. Critics claim that Russia was intentionally destroying Georgia’s energy infrastructure.
 
Several U.S. oil companies are involved in offshore drilling projects in Azerbaijan, including two that own stakes in the BTC pipeline. And according to the State Department, U.S. companies are currently exploring other industries and investment opportunities in the country, such as the telecommunications sector.
 
The U.S. is also interested in preventing a new blow up between Azerbaijan and Armenia over the Nagorno-Karabakh region, which could threaten the supply line through Azerbaijan and other countries circumventing Russia. The U.S. has played a leading role in the OSCE’s Minsk group, created in 1992 to resolve the conflict, and became a co-Chair with Russia and France in 1999.
 
Azerbaijan at Crosswinds of a New Cold War (by Kaveh L. Afrasiabi, Asia Times)
Armenia, Azerbaijan, and Georgia: Security Issues and Implications for U.S. Interests (by Jim Nichol, Congressional Research Service Report) (PDF)
 
Tourism
8,253 Americans visited Azerbaijan in 2006. Tourism grew from 5,504 visitors in 2002 to a peak of 10,115 in 2004 before falling back again. 2,207 Azerbaijani visited the U.S. in 2006. The number of tourists has climbed slightly since 2002, when 1,322 Azerbaijani traveled to America.
 
 
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Where Does the Money Flow
For oil-rich Azerbaijan, now considered one of the most important sites in the world for oil exploitation, petrol is the main concern of investors and policymakers alike. Western oil companies have recently begun to tap offshore fields that the Soviets couldn’t, and are now transporting the product in pipelines that circumvent Russia.
 
The second-largest pipeline in the world, the Baku-Tbilisi-Cevhan (BTC), does just that. BTC is operated by a consortium of Western oil companies (led by the U.K.’s BP, with smaller stakes held by U.S. companies Chevron and ConocoPhillips) and runs from Azerbaijan, through Georgia, to a Turkish port.
According to the State Department, U.S. companies are currently involved in three offshore drilling projects in Azerbaijan.
Some special interest groups are also taking a keen interest in Azerbaijan. On a recent trip to the country, the Executive Director of the American Jewish Council, which has promised to lobby on behalf of Azeri interests in the U.S. Congress, noted that, “Azerbaijan is critical to Western energy security and to the avoidance of a potentially dangerous monopoly in the market for natural gas.”
American Jewish Committee to Lobby for Azeri Interests, Announces Director (Asbarez)
 
According to a recent World Bank report, Azerbaijan was the fastest reforming economy–that is, made the most pro-business reforms–in the world in 2007. In fact, Azerbaijan made a dramatic leap from 97th to 33rd in the World Bank’s ranking, based on 10 standards used to measure reform, including removing obstacles to starting a business, enforcing contracts and protecting investors. However, according to the U.S. State Department (2008), “progress on economic reform has generally lagged,” and the country is “still plagued by an arbitrary tax and customs administration, a weak court system, monopolistic regulation of the market, and corruption.” 
Azerbaijan leads business reformers, report says (by Alex Kennedy, Associated Press)
Azerbaijan and the IMF (International Monetary Fund)
U.S. Energy Information Agency – Azerbaijan background and info
 
The Oil Industry
Since 1994, Azerbaijan’s state oil company (SOCAR) has signed a series of billion-dollar agreements with major Western oil companies to tap its estimated multi-trillion dollar reserves. In 2007 the oil sector accounted for 52.8% of GDP, and promises to double it by 2010.
 
Major U.S. oil companies such as Pennzoil, Amoco, Unocal and Exxon have been engaged with Azerbaijan’s oil industry since the mid-1990s.
 
Amoco, at the time the biggest U.S. investor in Azerbaijan’s booming oil industry, was also a traditional supporter of the Republican Party. After Clinton agreed to invite the Azerbaijani president to Washington and promised to lobby Congress to lift U.S. sanctions on the country in 1996, the oil giant donated $50,000 to the Democratic National Committee.
 
In addition to major corporate players, well-connected U.S. citizens also stand to profit from exploitation of the Caspian oil wealth. According to a 1997 New York Times article,
 
“The list of private American citizens who are seeking to make money from Azerbaijani oil or to encourage investment here reads like a roster of the national security establishment. Among the most prominent names are former Secretaries of State Henry A. Kissinger and James A. Baker 3d, former Defense Secretary Dick Cheney, former Senator and Treasury Secretary Lloyd Bentsen, former White House chief of staff John H. Sununu, and two former national security advisers, Brent Scowcroft and Zbigniew Brzezinski.
 
These and other figures have helped persuade Congress and the Clinton Administration to embrace Azerbaijan, and that embrace is reshaping the geopolitical map of Eastern Europe and Central Asia.”
 
Azerbaijan is also reportedly currently in talks with Georgia and Kazakhstan, which holds 3.2 percent of the world’s oil, about the possible construction of a pipeline that could carry up to 10 billion tons of crude per year. U.S. companies are among the members of the association behind the project.
 
And negotiations for the proposed EU-backed Nabucco pipeline, which would run through Azerbaijan, are ongoing. Although Nabucco wouldn’t directly benefit the U.S. as it would Europe, the U.S. has been lobbying for the Caspian project and maintains an interest in diversifying oil supply and preventing Russian dominance. 
NABUCCO Gets a Boost in Baku (by Bruce Pannier, EurasiaNet)
 
Imports from Azerbaijan
By far, the biggest single-value commodity or product the U.S. imports from Azerbaijan is oil, with crude at over a billion dollars annually. Other imports are comparatively minor (fruit juice and products at about $4 million in 2007). Significantly, U.S. imports of crude have gone up from $0 in 2003 ($38,000 in 2004 and $0 again in 2005), to $688 million in 2006, and more than $1.7 billion in 2007.
 
Exports to Azerbaijan
The biggest U.S. export to Azerbaijan is drilling and oilfield equipment, which came in at around $66 million in 2007. The U.S. exported $21 million in industrial machines in 2007, up from previous years. Meat and poultry exports to Azerbaijan were back up slightly in 2007 (to $6 million, as compared with $1 million in 2006), but still down from much higher levels ($30 million) in recent years. U.S. tobacco exports to the country, at $9 million in 2003, have dropped off entirely in the years since.
 
Azerbaijan: Security Assistance (the U.S. sold $2.5 million of defense articles and supplies to Azerbaijan in 2007)
 
 
The U.S. gave $39.4 million in aid to Azerbaijan in 2007. The budget allotted the most funds to Civil Society ($7.1 million), Nonproliferation, Antiterrorism, Demining and Related Programs ($4.6 million), Foreign Military Financing ($3.9 million), Macroeconomic Foundation for Growth ($3.0 million), and Health ($3.0 million). The 2008 budget estimate reduced aid to $26.3 million, and the 2009 budget request will decrease it slightly further, to $24.7 million. The 2009 budget will distribute the most aid to Civil Society ($3.7 million), Foreign Military Financing ($3.0 million), Political Competition and Consensus-Building ($2.9 million), and Good Governance ($2.0 million).
 
In 1997 Congress, in response to the Nagorno-Karabakh dispute, imposed a ban on most aid to the to Azerbaijan. However in 2001, the Azeri government agreed to allow the U.S. to use its air and landing space for military operations in nearby Afghanistan, and the U.S. lifted the ban.
 
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Controversies
Oil and Military Bases
There is much speculation about the direction of relations between Washington and Azerbaijan. Visits from top U.S. officials, including Secretary of Defense Donald Rumsfeld and Vice-President Dick Cheney, have intensified in recent years, leading many to speculate about plans for military bases, possibly to facilitate an invasion of Iran. The oil industry, and its effect on regional security and stability, is also a source of controversy for the country.
Caspian oil set for fast flow to the West (By Kieran Cooke, BBC News)
Rumsfeld’s Baku Trip Stirs Controversy(by Alman Talyshli, EurasiaNet)
 
Murder of Opposition Journalist
There was international outrage at the 2005 shooting murder of Azeri opposition journalist Elmar Huseynov.
 
Azeri Held at Guantánamo
There is at least one Azeri national being held prisoner at Guantanamo
 
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Human Rights
Azerbaijan has long been criticized for human rights abuses. International observers have dismissed several elections as fraudulent, and condemned the government’s responding crack down on opposition movements.
Azerbaijan Elections – (U.S. State Department)
Azerbaijan Elections and After (Human Rights Watch) (PDF)
Fraud Allegations Plague Azerbaijan's Elections (by C.J. Chivers, New York Times)
 
In a pre-election report in 2008 (presidential elections are expected in October 2008), Human Rights Watch outlined several concerns, in particular, deteriorating media freedoms, including imprisonment of several journalists and the closure of the independent Election Monitoring Center. Additionally, police brutality and torture have long been issues of concern for international observers and human rights groups, as are political persecutions and arrests and lack of freedom of assembly.
 
The high-profile murder of an opposition journalist in 2005 also drew the world’s attention to the human rights situation in Azerbaijan.
 
The 2008 Freedom House World Report, which attempts to measure standards of democracy and political freedoms in individual countries, found Azerbaijan to be “not a free country,” below ratings of its rival and neighbor Armenia. This label was refuted by the Azerbaijani government, who called the determinants “unfair.”
 
Social and economic rights are also hindered by corruption. Despite the sudden economic growth and bloated GDP from the oil boom, the majority of Azerbaijanis have yet to feel the trickle-down effect.
 
Much to the disgust of human rights activists, Azerbaijan was elected to the newly formed U.N. Human Rights Council in May 2006.
 
 
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Debate
Azerbaijan, Armenia, Israel and Oil
The United States has been caught in the crossfire of the Nagorno-Karabkh conflict, during which the subject of foreign aid has been a subject of debate among U.S. lawmakers. Some also argue that the U.S. compromises its positions on human rights by lending support to the Azeri regime in exchange for access to Azerbaijan’s oil wealth
 
The rift between Azerbaijan and Armenia also causes additional fractures within U.S. politics. Israel, a staunch U.S. ally and a strong lobbying presence in the U.S. government, has developed a close working relationship with Azerbaijan, which it relies on for intelligence gathering about Iran and oil imports. Israel and some Jewish-Americans have sided with Azerbaijan and lobbied against U.S. recognition of the Armenian genocide.
Armenia, Azerbaijan, and Georgia: Security Issues and Implications for U.S. Interests (by Jim Nichol, Congressional Research Service Report) (PDF)
Israel and Azerbaijan's Furtive Embrace (by Ilya Bourtman, Middle East Quarterly)
Azerbaijan's Riches Alter the Chessboard (by Dan Morgan and David B. Ottaway, Washington Post)
An Experienced Armenian LobbyOpposes Azerbaijan: The Armenian-Azerbaijani Dispute As Seen From the U.S.—Two Views (by Mahir Ibrahimov and Erjan Kurbanov, Washington Report on Middle East Affairs)
 
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Past Ambassadors
Reno L. Harnish III
The current ambassador’s predecessor, Reno Harish (2003-2006), was recalled from his post amid an alleged prostitution and human smuggling scandal. He was reassigned to the position of Deputy Assistant Secretary of State of the Bureau of Ocean and International Environmental and Scientific Affairs.
 
 
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Azerbaijan's Ambassador to the U.S.
ambassador-image Suleymanov, Elin

The former Soviet republic of Azerbaijan, located in the Caucasus Mountains west of the Caspian Sea, south of Russia and north of Iran, has sent a new ambassador to the U.S. Elin Suleymanov is quite familiar with the U.S., having lived here ten years of his life, including the past six years in Los Angeles.

 
A career diplomat, Suleymanov was born in Baku, Azerbaijan, in September 1970. He earned a Bachelor’s degree in Geography from Azerbaijan State University in 1989, another in Political Geography from Moscow State University in Russia in 1992, and a Master’s degree in Public Administration from the University of Toledo in Ohio in 1994.
 
Suleymanov worked with the Open Media Research Institute in Prague, Czech Republic, from 1995 to 1997, and as public information officer for the United Nations High Commissioner for Refugees in Azerbaijan from 1997 to 1998. He returned to the U.S. to serve as press officer and first secretary at the Azerbaijan Embassy in Washington, D.C. He also earned a graduate degree in 2002 from Tufts University’s Fletcher School of Law and Diplomacy, where he was the first Azerbaijani to study. At Fletcher, Suleymanov focused on international security studies and public international law, writing a thesis entitled “Emergence of New Political Identity in the South Caucasus: Energy, Security, Strategic Location and Pragmatism.”
 
Suleymanov joined the Azerbaijani Foreign Service and was posted to the embassy in Washington, DC, to serve as first secretary and press attaché, followed by a stint as senior counselor in the Foreign Relations Department of the president of Azerbaijan, Ilham Aliyev. On November 14, 2005, Aliyev appointed Suleymanov Azerbaijan’s first consul general to Los Angeles, California, with responsibility for providing consular services to 13 states. Almost six years later, On October 26, 2011, Suleymanov was promoted to Ambassador to the U.S., and formally presented his credentials to President Obama on January 18, 2012.
 
Suleymanov speaks Azerbaijani, English, Russian and Czech. He is married to Lala Suleymanova.
 
The Price of Freedom: Remembering January 20, 1990 (by Elin Suleymanov, Huffington Post)

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Azerbaijan's Embassy Web Site in the U.S.
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U.S. Ambassador to Azerbaijan

Moringstar, Richard
ambassador-image

Energy-rich Azerbaijan, strategically located south of Russia and north of Iran, has become accustomed to being wooed by both Russia and the United States, especially when it comes to energy development. With relations hampered by the lack of a full-time U.S. ambassador in Baku since December, President Barack Obama on April 26 announced his intent to nominate Richard L. Morningstar, who has specialized in Caspian basin energy issues for about 15 years, to be the next ambassador. Obama’s first nominee to the post of ambassador to Azerbaijan, Matthew Bryza, was never confirmed by the Senate because of opposition from Armenian-Americans and he served only as a recess appointment.

 

Born in Newton, Massachusetts, in 1945, Morningstar earned a BA at Harvard in 1967 and a JD from Stanford Law School in 1970. He began his career in 1970 as an attorney with Nixon and Peabody in Boston, where he became a partner in 1977. He left the firm in 1981 to become President and CEO of Costar Corporation, adding the title of chairman of the Board from 1990 to 1993. Morningstar also served as a commissioner of the National Conference of Commissioners on Uniform State Laws from 1989 to 1993.

 

Leaving the private sector after the election of President Bill Clinton, Morningstar served as senior vice president of the Overseas Private Investment Corporation from 1993 to 1995. From 1995 to 1998, he served as special advisor to the president and secretary of state on Assistance to the New Independent States of the Former Soviet Union. From 1998 to 1999, he was special advisor to the President and the secretary of state for Caspian Basin Energy Diplomacy.

 

From 1999 to September 2001, Morningstar served as U.S. ambassador to the European Union. During his service from 1995 to 2001, his major achievement was to push through the construction of the Baku-Tbilisi-Ceyhan (BTC) oil pipeline, which became operational in July 2006. The stated commercial purpose of this 1,100-mile-long pipeline is to carry Caspian Sea (Azerbaijani) oil to world markets via a sea terminal on Turkey’s Mediterranean Coast. Geopolitically, the purpose of the pipeline was to cut Russia and Iran out of the loop on Caspian Sea oil.

 

Back in the private sector after the election of George W. Bush in 2000, Morningstar was a senior director for Stonebridge International LLC starting in October 2001, and taught courses at Stanford Law School from 2004 to 2009 and at Harvard University’s Kennedy School of Government from 2003 to 2009. In April 2009, he returned to government as the secretary of state’s special envoy for Eurasian Energy. He is currently a member of the Council on Foreign Relations.

 

A longtime Democrat, since 1990 Morningstar has contributed more than $320,000 to Democratic candidates and causes, including $172,000 to the Democratic National Committee, $12,900 to Secretary of State Hillary Clinton’s campaigns, and $4,600 to President Obama’s 2008 presidential campaign. Morningstar is married to Faith Pierce Morningstar; they have two sons and two daughters.

-Matt Bewig

 

Official Biography

Richard Morningstar: Letter to a Wayward Classmate (by Gilbert Doctorow)

The Baku-Tbilisi-Ceyhan Pipeline: A Retrospective and a Look at the Future (by Richard Morningstar, Central Asia-Caucasus Institute Analyst)

The Great Game: An Opportunity for Transatlantic Cooperation (by Richard Morningstar, Bertelsmann Stiftung) (pdf)

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Previous U.S. Ambassador to Azerbaijan

Derse, Anne
ambassador-image

Anne Elizabeth Derse was confirmed as the US Ambassador to Azerbaijan in May 2006. Born in Lakewood, Ohio, Derse earned her B.A. in French and linguistics from Macalester College (St. Paul, Minnesota) in 1976, and her M.A. in international relations from Johns Hopkins University.
 
Derse joined the State Department in 1981 as Vice Consul in Trinidad and Tobago, and then served as staff assistant to the Counselor of the Department from 1983-1984. From 1985-1988 she was a trade officer in Singapore, and then Finance and Development officer and Deputy Economic Counselor in Seoul from 1989-1993. She worked as Special Assistant for Asian Affairs from 1993-1995, and as Economic Counselor and Deputy Counselor at the U.S. Embassy in Manila from 1995-1997. Derse was also Economic Counselor at the U.S. embassy in Brussels from 1997-1999. Thereafter, she was Minister Counselor for Economic Affairs at the U.S. Mission to the European Union (1999-2003). From 2003-2004 she worked for the Department of State’s Under Secretary for Economic, Business and Agricultural Affairs as Executive Assistant. From 2004-2005, she worked as Minister Counselor for Economic Affairs in the new U.S. embassy in Baghdad.
 
Before being appointed Ambassador to Azerbaijan in 2006, Derse was Director of Biodefense Policy for President Bush’s Homeland Security Council.
 
 

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Bookmark and Share
News
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Overview
A former Soviet Socialist Republic, Azerbaijan lies in one of the more complicated post-Soviet areas. Situated between powerful neighbors Russia and Iran, the moderate Muslim country also shares borders with Georgia and with Armenia, with which it has been engaged in an armed dispute over the Nagarno-Karabakh region since the end of Soviet rule. Armenia maintains control over the disputed region, as well a significant portion of Azerbaijan-proper that was subsequently gained in the struggle. As a result of the conflict, hundreds of thousands of Azerbaijanis have been internally displaced.
 
Baku in Azerbaijan is the site of the world’s first oil well, and the country’s potential for significant oil wealth is no secret. In fact, recent exploitation of the vast reserves has caused a dramatic upswing in Azerbaijan’s economy. According to the CIA World Fact Book, a massive project begun in 2006 by Western oil companies (1 million barrels a day through a $4 billion pipeline from Baku to a Turkish port) could double Azerbaijan’s GDP by 2010. The pipeline is the second largest in the world.
 
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Basic Information
Lay of the Land:
Located in Southwest Asia, Azerbaijan is a mountainous country bordering the Caspian Sea, Iran, Georgia, Armenia and Russia. In the Southwest, the Kur-Araz Ovaligi lowlands lie mostly below sea level, and the Great Caucasus mountain range runs through the North of the country. Slightly smaller than Maine, it is the largest and most populous country in the South Caucasus.
 
Population: 8.2 million
 
Religions: Shi’a Muslim 62.4%, Sunni Muslim 33.6%, Christian (predominately Russian Orthodox) 2.3%, Jewish 0.2%.
 
Ethnic Groups: Azeri 90.6%, Dagestani 2.2%, Russian 1.8%, Armenian 1.5%, other 3.9%
 
Languages: North Azerbaijani (official) 76.8%, Talysh 10.1%, Lezgi 2.2%, Avar 0.6%, Tsakhur 0.2%. There are 14 living languages in Azerbaijan.
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History
Conquered by the Arabs and converted to Islam in the 7th century, Azerbaijan was also largely shaped by the convergence of Seljuk Turk and Ancient Persian cultures.
 
After Russian and Persian powers fought over the territory for several centuries, Azerbaijan was divided between Turkey and Persia in the late 19th century. Exploitation of the country’s oil fields led to a prosperous period preceding WWI, and Azerbaijan briefly became an independent republic in 1918. However, the Soviet Army invaded two years later and declared Azerbaijan a Soviet Republic soon after.
 
Toward the end of the Soviet era, Azerbaijan became engaged in a struggle over the Nagorno-Karabakh region, whose population of mostly ethnic Armenians sought to become part of Armenia in 1988. Ethnic strife in the region escalated in the following years, with casualties and a gradual exodus from both sides–ethnic Azeris fleeing Nagorno-Karabakh and ethnic Armenians fleeing Azerbaijan. In 1991 Azerbaijan launched a military offensive after the Nagorno-Karabakh leadership declared itself an independent republic. A 1994 ceasefire between Armenia and Azerbaijan left ethnic Armenians in control of the disputed territory, as well as a surrounding part (about 16%) of Azerbaijan-proper.
 
Also in 1994, Azerbaijan signed its “Contract of the Century,” an agreement with a consortium of Western oil companies to tap offshore oil fields and run oil through a pipeline stretching through Georgia to Turkey. The project was inaugurated in 2006, when the Baku-Tbilsi-Ceyhan (BTC) pipeline officially opened.
 
In 1995, Azerbaijan held its first multi-party elections, which observers claimed were marred by corruption and irregularities, failing to meet international standards. Another election in 2000 was equally dubious.
 
After the attacks of September 11, 2001, the U.S. lifted a military aid ban it had imposed on both Armenia and Azerbaijan (in response to the Nagorno-Karabakh dispute) when the countries began providing airspace for its military operations in neighboring Afghanistan and Iraq.
 
In 2007, Azerbaijan threatened another military offensive if a comprehensive peace accord wasn’t reach in 2008. The spring of 2008 saw an escalation in armed conflict in the Nagorno-Karabakh region, with each side blaming the other for initiating the scuffle, which caused several casualties on both sides.
 
Many observers point to the upcoming October 2008 presidential elections as a source of additional pressure on the conflict. Azerbaijani president Ilham Aliyev has reportedly tapped into a reserve of nationalist fervor over the unresolved Nagorno-Karabakh issue in an attempt to deflect the spotlight from his regime’s failure to address the countries outstanding social and economic issues.
 
Azerbaijan is also using BTC pipeline revenue to build its military, a venture now aided by the U.S. According to a recent Stratfor report, Azerbaijan’s military budget leapt from $175 million in 2004 to more than $1 billion at the start of 2008. And by April 2008, the country announced its military expenditure had reached $2 billion.
 
 

 

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History of U.S. Relations with Azerbaijan
U.S. relations with Azerbaijan really begin with its independence in 1991 from the Soviet Union. As with many former Soviet states, the U.S. established diplomatic relations with Azerbaijan shortly after, and funded massive market liberalization schemes to aid the country’s transition to capitalism…and prime it for U.S. investment. The two countries are party to bilateral trade and investment agreements.
 
Since the mid-1990s when Azerbaijan began brokering its oil deals with Western consortiums, the U.S. government has taken a renewed interest in the otherwise peripheral state.
 
The U.S. has also been active in negotiations between Azerbaijan and Armenia in the Nagorno-Karabakh dispute, viewing Azerbaijan and other South Caucasus states as increasingly important to its security interests in the region. In turn, Azerbaijan has looked to the U.S. to bolster its independence from its former patriarch and traditional ally, Russia.
 
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Current U.S. Relations with Azerbaijan
Sitting on some of the largest oil-and-gas reserves in the former Soviet Union, Azerbaijan has become an important ally and security concern for the U.S. It is also one of the countries through which oil is pumped to the West without going through Russia, which many observers speculate feeds into the current conflict in Georgia, if it is not actually a direct cause of it.
 
With Russia showing its muscle in Georgia, a key transit state through which oil from Azerbaijan runs to Turkey and on to Europe and the U.S. (through the BTC, the world’s second-largest oil pipeline), former Soviet states in the surrounding area are concerned about security and autonomy, while the U.S. is concerned about keeping oil flowing securely without going through Russia. Thus some speculate that Azerbaijan and others are caught in the “New Cold War.”
 
On a September 2008 trip to the South Caucasus, U.S. Vice President Dick Cheney assured Azerbaijan of his government’s “abiding interest” in regional stability. However, according to a report by The Moscow Times, Cheney failed to gain Azerbaijan’s support for a new gas pipeline that would transport oil from the Caspian Sea to Western Europe, bypassing Russia. According to the article, which cites a Kommerset report (which itself cites an official in the Aliyev administration), Azeri President Ilham Aliyev did “not want to anger Russia” in light of its current invasion into neighboring Georgia.
 
While South Caucasus states are wary of Russia, Western powers are concerned over the disruption caused by the conflict (the BTC and other pipelines were temporarily closed down), and the threat of further interference. Critics claim that Russia was intentionally destroying Georgia’s energy infrastructure.
 
Several U.S. oil companies are involved in offshore drilling projects in Azerbaijan, including two that own stakes in the BTC pipeline. And according to the State Department, U.S. companies are currently exploring other industries and investment opportunities in the country, such as the telecommunications sector.
 
The U.S. is also interested in preventing a new blow up between Azerbaijan and Armenia over the Nagorno-Karabakh region, which could threaten the supply line through Azerbaijan and other countries circumventing Russia. The U.S. has played a leading role in the OSCE’s Minsk group, created in 1992 to resolve the conflict, and became a co-Chair with Russia and France in 1999.
 
Azerbaijan at Crosswinds of a New Cold War (by Kaveh L. Afrasiabi, Asia Times)
Armenia, Azerbaijan, and Georgia: Security Issues and Implications for U.S. Interests (by Jim Nichol, Congressional Research Service Report) (PDF)
 
Tourism
8,253 Americans visited Azerbaijan in 2006. Tourism grew from 5,504 visitors in 2002 to a peak of 10,115 in 2004 before falling back again. 2,207 Azerbaijani visited the U.S. in 2006. The number of tourists has climbed slightly since 2002, when 1,322 Azerbaijani traveled to America.
 
 
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Where Does the Money Flow
For oil-rich Azerbaijan, now considered one of the most important sites in the world for oil exploitation, petrol is the main concern of investors and policymakers alike. Western oil companies have recently begun to tap offshore fields that the Soviets couldn’t, and are now transporting the product in pipelines that circumvent Russia.
 
The second-largest pipeline in the world, the Baku-Tbilisi-Cevhan (BTC), does just that. BTC is operated by a consortium of Western oil companies (led by the U.K.’s BP, with smaller stakes held by U.S. companies Chevron and ConocoPhillips) and runs from Azerbaijan, through Georgia, to a Turkish port.
According to the State Department, U.S. companies are currently involved in three offshore drilling projects in Azerbaijan.
Some special interest groups are also taking a keen interest in Azerbaijan. On a recent trip to the country, the Executive Director of the American Jewish Council, which has promised to lobby on behalf of Azeri interests in the U.S. Congress, noted that, “Azerbaijan is critical to Western energy security and to the avoidance of a potentially dangerous monopoly in the market for natural gas.”
American Jewish Committee to Lobby for Azeri Interests, Announces Director (Asbarez)
 
According to a recent World Bank report, Azerbaijan was the fastest reforming economy–that is, made the most pro-business reforms–in the world in 2007. In fact, Azerbaijan made a dramatic leap from 97th to 33rd in the World Bank’s ranking, based on 10 standards used to measure reform, including removing obstacles to starting a business, enforcing contracts and protecting investors. However, according to the U.S. State Department (2008), “progress on economic reform has generally lagged,” and the country is “still plagued by an arbitrary tax and customs administration, a weak court system, monopolistic regulation of the market, and corruption.” 
Azerbaijan leads business reformers, report says (by Alex Kennedy, Associated Press)
Azerbaijan and the IMF (International Monetary Fund)
U.S. Energy Information Agency – Azerbaijan background and info
 
The Oil Industry
Since 1994, Azerbaijan’s state oil company (SOCAR) has signed a series of billion-dollar agreements with major Western oil companies to tap its estimated multi-trillion dollar reserves. In 2007 the oil sector accounted for 52.8% of GDP, and promises to double it by 2010.
 
Major U.S. oil companies such as Pennzoil, Amoco, Unocal and Exxon have been engaged with Azerbaijan’s oil industry since the mid-1990s.
 
Amoco, at the time the biggest U.S. investor in Azerbaijan’s booming oil industry, was also a traditional supporter of the Republican Party. After Clinton agreed to invite the Azerbaijani president to Washington and promised to lobby Congress to lift U.S. sanctions on the country in 1996, the oil giant donated $50,000 to the Democratic National Committee.
 
In addition to major corporate players, well-connected U.S. citizens also stand to profit from exploitation of the Caspian oil wealth. According to a 1997 New York Times article,
 
“The list of private American citizens who are seeking to make money from Azerbaijani oil or to encourage investment here reads like a roster of the national security establishment. Among the most prominent names are former Secretaries of State Henry A. Kissinger and James A. Baker 3d, former Defense Secretary Dick Cheney, former Senator and Treasury Secretary Lloyd Bentsen, former White House chief of staff John H. Sununu, and two former national security advisers, Brent Scowcroft and Zbigniew Brzezinski.
 
These and other figures have helped persuade Congress and the Clinton Administration to embrace Azerbaijan, and that embrace is reshaping the geopolitical map of Eastern Europe and Central Asia.”
 
Azerbaijan is also reportedly currently in talks with Georgia and Kazakhstan, which holds 3.2 percent of the world’s oil, about the possible construction of a pipeline that could carry up to 10 billion tons of crude per year. U.S. companies are among the members of the association behind the project.
 
And negotiations for the proposed EU-backed Nabucco pipeline, which would run through Azerbaijan, are ongoing. Although Nabucco wouldn’t directly benefit the U.S. as it would Europe, the U.S. has been lobbying for the Caspian project and maintains an interest in diversifying oil supply and preventing Russian dominance. 
NABUCCO Gets a Boost in Baku (by Bruce Pannier, EurasiaNet)
 
Imports from Azerbaijan
By far, the biggest single-value commodity or product the U.S. imports from Azerbaijan is oil, with crude at over a billion dollars annually. Other imports are comparatively minor (fruit juice and products at about $4 million in 2007). Significantly, U.S. imports of crude have gone up from $0 in 2003 ($38,000 in 2004 and $0 again in 2005), to $688 million in 2006, and more than $1.7 billion in 2007.
 
Exports to Azerbaijan
The biggest U.S. export to Azerbaijan is drilling and oilfield equipment, which came in at around $66 million in 2007. The U.S. exported $21 million in industrial machines in 2007, up from previous years. Meat and poultry exports to Azerbaijan were back up slightly in 2007 (to $6 million, as compared with $1 million in 2006), but still down from much higher levels ($30 million) in recent years. U.S. tobacco exports to the country, at $9 million in 2003, have dropped off entirely in the years since.
 
Azerbaijan: Security Assistance (the U.S. sold $2.5 million of defense articles and supplies to Azerbaijan in 2007)
 
 
The U.S. gave $39.4 million in aid to Azerbaijan in 2007. The budget allotted the most funds to Civil Society ($7.1 million), Nonproliferation, Antiterrorism, Demining and Related Programs ($4.6 million), Foreign Military Financing ($3.9 million), Macroeconomic Foundation for Growth ($3.0 million), and Health ($3.0 million). The 2008 budget estimate reduced aid to $26.3 million, and the 2009 budget request will decrease it slightly further, to $24.7 million. The 2009 budget will distribute the most aid to Civil Society ($3.7 million), Foreign Military Financing ($3.0 million), Political Competition and Consensus-Building ($2.9 million), and Good Governance ($2.0 million).
 
In 1997 Congress, in response to the Nagorno-Karabakh dispute, imposed a ban on most aid to the to Azerbaijan. However in 2001, the Azeri government agreed to allow the U.S. to use its air and landing space for military operations in nearby Afghanistan, and the U.S. lifted the ban.
 
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Controversies
Oil and Military Bases
There is much speculation about the direction of relations between Washington and Azerbaijan. Visits from top U.S. officials, including Secretary of Defense Donald Rumsfeld and Vice-President Dick Cheney, have intensified in recent years, leading many to speculate about plans for military bases, possibly to facilitate an invasion of Iran. The oil industry, and its effect on regional security and stability, is also a source of controversy for the country.
Caspian oil set for fast flow to the West (By Kieran Cooke, BBC News)
Rumsfeld’s Baku Trip Stirs Controversy(by Alman Talyshli, EurasiaNet)
 
Murder of Opposition Journalist
There was international outrage at the 2005 shooting murder of Azeri opposition journalist Elmar Huseynov.
 
Azeri Held at Guantánamo
There is at least one Azeri national being held prisoner at Guantanamo
 
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Human Rights
Azerbaijan has long been criticized for human rights abuses. International observers have dismissed several elections as fraudulent, and condemned the government’s responding crack down on opposition movements.
Azerbaijan Elections – (U.S. State Department)
Azerbaijan Elections and After (Human Rights Watch) (PDF)
Fraud Allegations Plague Azerbaijan's Elections (by C.J. Chivers, New York Times)
 
In a pre-election report in 2008 (presidential elections are expected in October 2008), Human Rights Watch outlined several concerns, in particular, deteriorating media freedoms, including imprisonment of several journalists and the closure of the independent Election Monitoring Center. Additionally, police brutality and torture have long been issues of concern for international observers and human rights groups, as are political persecutions and arrests and lack of freedom of assembly.
 
The high-profile murder of an opposition journalist in 2005 also drew the world’s attention to the human rights situation in Azerbaijan.
 
The 2008 Freedom House World Report, which attempts to measure standards of democracy and political freedoms in individual countries, found Azerbaijan to be “not a free country,” below ratings of its rival and neighbor Armenia. This label was refuted by the Azerbaijani government, who called the determinants “unfair.”
 
Social and economic rights are also hindered by corruption. Despite the sudden economic growth and bloated GDP from the oil boom, the majority of Azerbaijanis have yet to feel the trickle-down effect.
 
Much to the disgust of human rights activists, Azerbaijan was elected to the newly formed U.N. Human Rights Council in May 2006.
 
 
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Debate
Azerbaijan, Armenia, Israel and Oil
The United States has been caught in the crossfire of the Nagorno-Karabkh conflict, during which the subject of foreign aid has been a subject of debate among U.S. lawmakers. Some also argue that the U.S. compromises its positions on human rights by lending support to the Azeri regime in exchange for access to Azerbaijan’s oil wealth
 
The rift between Azerbaijan and Armenia also causes additional fractures within U.S. politics. Israel, a staunch U.S. ally and a strong lobbying presence in the U.S. government, has developed a close working relationship with Azerbaijan, which it relies on for intelligence gathering about Iran and oil imports. Israel and some Jewish-Americans have sided with Azerbaijan and lobbied against U.S. recognition of the Armenian genocide.
Armenia, Azerbaijan, and Georgia: Security Issues and Implications for U.S. Interests (by Jim Nichol, Congressional Research Service Report) (PDF)
Israel and Azerbaijan's Furtive Embrace (by Ilya Bourtman, Middle East Quarterly)
Azerbaijan's Riches Alter the Chessboard (by Dan Morgan and David B. Ottaway, Washington Post)
An Experienced Armenian LobbyOpposes Azerbaijan: The Armenian-Azerbaijani Dispute As Seen From the U.S.—Two Views (by Mahir Ibrahimov and Erjan Kurbanov, Washington Report on Middle East Affairs)
 
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Past Ambassadors
Reno L. Harnish III
The current ambassador’s predecessor, Reno Harish (2003-2006), was recalled from his post amid an alleged prostitution and human smuggling scandal. He was reassigned to the position of Deputy Assistant Secretary of State of the Bureau of Ocean and International Environmental and Scientific Affairs.
 
 
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Azerbaijan's Ambassador to the U.S.
ambassador-image Suleymanov, Elin

The former Soviet republic of Azerbaijan, located in the Caucasus Mountains west of the Caspian Sea, south of Russia and north of Iran, has sent a new ambassador to the U.S. Elin Suleymanov is quite familiar with the U.S., having lived here ten years of his life, including the past six years in Los Angeles.

 
A career diplomat, Suleymanov was born in Baku, Azerbaijan, in September 1970. He earned a Bachelor’s degree in Geography from Azerbaijan State University in 1989, another in Political Geography from Moscow State University in Russia in 1992, and a Master’s degree in Public Administration from the University of Toledo in Ohio in 1994.
 
Suleymanov worked with the Open Media Research Institute in Prague, Czech Republic, from 1995 to 1997, and as public information officer for the United Nations High Commissioner for Refugees in Azerbaijan from 1997 to 1998. He returned to the U.S. to serve as press officer and first secretary at the Azerbaijan Embassy in Washington, D.C. He also earned a graduate degree in 2002 from Tufts University’s Fletcher School of Law and Diplomacy, where he was the first Azerbaijani to study. At Fletcher, Suleymanov focused on international security studies and public international law, writing a thesis entitled “Emergence of New Political Identity in the South Caucasus: Energy, Security, Strategic Location and Pragmatism.”
 
Suleymanov joined the Azerbaijani Foreign Service and was posted to the embassy in Washington, DC, to serve as first secretary and press attaché, followed by a stint as senior counselor in the Foreign Relations Department of the president of Azerbaijan, Ilham Aliyev. On November 14, 2005, Aliyev appointed Suleymanov Azerbaijan’s first consul general to Los Angeles, California, with responsibility for providing consular services to 13 states. Almost six years later, On October 26, 2011, Suleymanov was promoted to Ambassador to the U.S., and formally presented his credentials to President Obama on January 18, 2012.
 
Suleymanov speaks Azerbaijani, English, Russian and Czech. He is married to Lala Suleymanova.
 
The Price of Freedom: Remembering January 20, 1990 (by Elin Suleymanov, Huffington Post)

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Azerbaijan's Embassy Web Site in the U.S.
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U.S. Ambassador to Azerbaijan

Moringstar, Richard
ambassador-image

Energy-rich Azerbaijan, strategically located south of Russia and north of Iran, has become accustomed to being wooed by both Russia and the United States, especially when it comes to energy development. With relations hampered by the lack of a full-time U.S. ambassador in Baku since December, President Barack Obama on April 26 announced his intent to nominate Richard L. Morningstar, who has specialized in Caspian basin energy issues for about 15 years, to be the next ambassador. Obama’s first nominee to the post of ambassador to Azerbaijan, Matthew Bryza, was never confirmed by the Senate because of opposition from Armenian-Americans and he served only as a recess appointment.

 

Born in Newton, Massachusetts, in 1945, Morningstar earned a BA at Harvard in 1967 and a JD from Stanford Law School in 1970. He began his career in 1970 as an attorney with Nixon and Peabody in Boston, where he became a partner in 1977. He left the firm in 1981 to become President and CEO of Costar Corporation, adding the title of chairman of the Board from 1990 to 1993. Morningstar also served as a commissioner of the National Conference of Commissioners on Uniform State Laws from 1989 to 1993.

 

Leaving the private sector after the election of President Bill Clinton, Morningstar served as senior vice president of the Overseas Private Investment Corporation from 1993 to 1995. From 1995 to 1998, he served as special advisor to the president and secretary of state on Assistance to the New Independent States of the Former Soviet Union. From 1998 to 1999, he was special advisor to the President and the secretary of state for Caspian Basin Energy Diplomacy.

 

From 1999 to September 2001, Morningstar served as U.S. ambassador to the European Union. During his service from 1995 to 2001, his major achievement was to push through the construction of the Baku-Tbilisi-Ceyhan (BTC) oil pipeline, which became operational in July 2006. The stated commercial purpose of this 1,100-mile-long pipeline is to carry Caspian Sea (Azerbaijani) oil to world markets via a sea terminal on Turkey’s Mediterranean Coast. Geopolitically, the purpose of the pipeline was to cut Russia and Iran out of the loop on Caspian Sea oil.

 

Back in the private sector after the election of George W. Bush in 2000, Morningstar was a senior director for Stonebridge International LLC starting in October 2001, and taught courses at Stanford Law School from 2004 to 2009 and at Harvard University’s Kennedy School of Government from 2003 to 2009. In April 2009, he returned to government as the secretary of state’s special envoy for Eurasian Energy. He is currently a member of the Council on Foreign Relations.

 

A longtime Democrat, since 1990 Morningstar has contributed more than $320,000 to Democratic candidates and causes, including $172,000 to the Democratic National Committee, $12,900 to Secretary of State Hillary Clinton’s campaigns, and $4,600 to President Obama’s 2008 presidential campaign. Morningstar is married to Faith Pierce Morningstar; they have two sons and two daughters.

-Matt Bewig

 

Official Biography

Richard Morningstar: Letter to a Wayward Classmate (by Gilbert Doctorow)

The Baku-Tbilisi-Ceyhan Pipeline: A Retrospective and a Look at the Future (by Richard Morningstar, Central Asia-Caucasus Institute Analyst)

The Great Game: An Opportunity for Transatlantic Cooperation (by Richard Morningstar, Bertelsmann Stiftung) (pdf)

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Previous U.S. Ambassador to Azerbaijan

Derse, Anne
ambassador-image

Anne Elizabeth Derse was confirmed as the US Ambassador to Azerbaijan in May 2006. Born in Lakewood, Ohio, Derse earned her B.A. in French and linguistics from Macalester College (St. Paul, Minnesota) in 1976, and her M.A. in international relations from Johns Hopkins University.
 
Derse joined the State Department in 1981 as Vice Consul in Trinidad and Tobago, and then served as staff assistant to the Counselor of the Department from 1983-1984. From 1985-1988 she was a trade officer in Singapore, and then Finance and Development officer and Deputy Economic Counselor in Seoul from 1989-1993. She worked as Special Assistant for Asian Affairs from 1993-1995, and as Economic Counselor and Deputy Counselor at the U.S. Embassy in Manila from 1995-1997. Derse was also Economic Counselor at the U.S. embassy in Brussels from 1997-1999. Thereafter, she was Minister Counselor for Economic Affairs at the U.S. Mission to the European Union (1999-2003). From 2003-2004 she worked for the Department of State’s Under Secretary for Economic, Business and Agricultural Affairs as Executive Assistant. From 2004-2005, she worked as Minister Counselor for Economic Affairs in the new U.S. embassy in Baghdad.
 
Before being appointed Ambassador to Azerbaijan in 2006, Derse was Director of Biodefense Policy for President Bush’s Homeland Security Council.
 
 

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