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Azerbaijan Unable to make payment after shipment of Russian Weapons.

Russia’s senior defense industry official has
made an unexpected visit to Baku, as a Russian newspaper reports that
Azerbaijan is refusing to pay for a shipment of Russian arms.

“The fall in oil prices has affected everyone, and Azerbaijan is no
exception,” an unnamed Russian defense industry official told the
newspaper Kommersant. As a result, a shipment of weapons ordered several
years ago by Azerbaijan is currently sitting in port waiting for
payment, the official said.

An early version of a story on the Sputnik Azerbaijan site cited an
Azerbaijani military expert backing that up, but some time after it was
published all references to Baku’s failure to pay were erased. 

In an apparent effort to sort out the situation, Russia’s deputy prime
minister in charge of defense industry, Dmitry Rogozin, arrived in Baku
for a previously unannounced visit on Wednesday night. On Thursday,
Rogozin posted a photo with him and Azerbaijan President Ilham Aliyev on
his facebook page with the caption “Following positive negotiations
with the leader of friendly Azerbaijan Ilham Aliyev.” There was no
indication of what may have resulted from the positive negotiations. 

While Azerbaijan’s budget problems are real, “its problems paying for
the shipment may be both objective, as well as a bargaining position in
negotiations with Russia,” Kommersant noted. In particular, Azerbaijan
has objected to a $200 million credit that Russia offered Armenia last
year in order to acquire weaponry. Armenia and Azerbaijan are locked in a
struggle over the disputed territory of Nagorno Karabakh. Armenia, a
formal ally of Russia, gets discounted arms from Moscow, while oil-rich
Azerbaijan is one of the Russian defense industry’s best customers. 

Azerbaijan has made a number of arms purchases from Russia that it has
estimated at $4 billion, and most of that has been delivered but there
are still some tanks, infantry fighting vehicles and artillery systems
yet to be delivered, according to Kommersant’s source.

“Russia’s negotiation position will be fairly harsh, since the situation
has arisen through no fault of Russia’s,” the newspaper noted. It
quoted Russian military expert Ruslan Pukhov as suggesting that “you can
always find a compromise… we could either stop the delivery of
equipment and sell it to another country, or defer payment.” Oh, to have
been a fly on the well in the Rogozon-Aliyev meeting…

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