Ring of sanctions along the perimeter of Azerbaijan

Turkey was the first member of the North Atlantic alliance, to which the United States imposed sanctions. The reason for such a sharp change in relations between partners became the detention of pastor Andrew Brunson, whom the Turkish authorities suspect of supporting a military mutiny. Washington is dissatisfied with the "sharp violation of human rights" in Turkey, as stated the US Ministry of Finances, commenting on the decision to impose sanctions. The Minster of Justice, Abdulhamit Gul, and the Minister of Internal Affairs, Suleiman Soylu, have been included the list of sanctions. All their bank accounts found in the United States will be under arrest, and American companies will be banned from cooperation with two Turkish ministers. As a result, Turkey's national currency rate fell sharply, and the country faced a difficult economic situation. However, Turkey did not remain in debt, and introduced counter sanctions against the two US ministers, and the country's president, Recep Tayyip Erdogan signed a decree on increasing import duties on American cars, alcohol and tobacco, announcing counter-sanctions.

Against the backdrop of the developing sanctions war with Ankara, the US continues to pressure Russia. The US Congress announced a package of new anti-Moscow sanctions. The new measures envisage tightening of restrictions against Russian businessmen, politicians and officials, companies related to Russian energy projects, and sanctions against the state debt of the Russian Federation. The authors of the document propose not to grant licenses to Americans to participate in joint oil projects with Russia. It is expected that the sanctions will come into force on August 22. Information about the preparation of new sanctions caused a sharp decline in the ruble.

Washington has not forgotten about Iran, to which sanctions were applied in May this year, when in the beginning, US President Donald Trump said that Washington would leave a nuclear deal with Tehran and restore the sanctions regime. After a while, restrictive measures were applied to six employees of the Iran Islamic Revolutionary Guards Corps (IRGC), as well as three companies related to this structure. Just two weeks later, the US Ministry of Finance for the support of the Yemeni husits ​​imposed personal sanctions against five more Iranian citizens, and US Secretary of State Mike Pompeo promised that the anti-Iranian sanctions related to the US leaving the "nuclear deal" in 2015 will become "the toughest in history".

Naturally, any kind of sanctions have a negative impact on the economies of the countries to which they were applied. The sanction also affects the countries neighboring with them. How will the US sanctions imposed on Azerbaijan's neighbors affect the economy of Azerbaijan?

According to economist Natig Jafarli, the sanctions imposed by the West to the countries neighboring Azerbaijan, as well as the economic crisis in these countries, the fall in the exchange rate of their currencies will not certainly affect Baku: "Because Iran, Russia and Turkey are the largest trading partners of Azerbaijan. Sanctions against Iran have already called into question several large projects in which Azerbaijan was involved. One of them is the north-south railway project, in which Azerbaijan acts as a lender, allocating 500 million dollars for its construction. At the moment it is planned to allocate an additional $ 500 million loan. If in the future the US sanctions are imposed on the financial system of Tehran, then the implementation of the project and the repayment of the loan will be practically impossible. In addition, several protocols on the intention to participate in joint projects were signed between the State Oil Company of Iran and SOCAR. However, on November 1, heavy sanctions will be imposed on Iran's energy system, which will limit oil and gas sales, many projects will be suspended. This in turn means that SOCAR will not be able to continue its activities in Iran. Because if the work continues, the US can impose sanctions on SOCAR."

The expert believes that the wave of sanctions against Turkey will most affect the macroeconomic indicators and the level of trade only because of the decline of the lira: "However, I do not think that this will seriously affect the projects implemented in Turkey, will lead to their suspension. Because the shareholders of all energy projects implemented by Turkey are the Western countries themselves. However, problems can arise politically, and the tension of the Turkish-American relations will certainly affect Azerbaijan."

Jafarli noted that under the current situation Azerbaijan should not take sides: "Official Baku should not openly show that it is on the side of the West in relation to its neighbors, but it should not make statements against the Western countries. Azerbaijan should act reasonably, rationally and diplomatically." If possible, it is necessary to maintain neutrality in this difficult period, it will benefit the geopolitical interests of the country," Jafarli added.