| U.S. Government Assistance to and Cooperative Activities with Eurasia -FY 2003 Released by the Bureau of European and Eurasian Affairs January 2004 II. Country Assessments and Performance Measures - Azerbaijan U.S. STRATEGIC INTERESTS
The Global War on Terrorism has significantly raised the U.S. stakes in Azerbaijan. U.S. Government (USG) priorities in its relations with Azerbaijan include cooperation in combating terrorism and other trans-border threats; regional stability, especially the peaceful settlement of the Nagorno-Karabakh conflict; a successful transition to a democratic political system and market economy; and helping the country become a reliable supplier of oil and gas to international markets in the West, while ensuring that revenues from its natural resources lead to broadly based economic growth. The President’s January 2002 waiver of FREEDOM Support Act (FSA) Section 907 restrictions on certain types of assistance to the Government of Azerbaijan gave the USG new tools to advance its interests. Since then, USG-funded assistance programs have begun to focus on counter-terrorism, border security, law enforcement and economic reform. Azerbaijan has lent its airspace in support of Operation Enduring Freedom, and Azerbaijani troops now serve alongside U.S. troops in Afghanistan, Iraq, and Kosovo. Azerbaijan is also the linchpin of the East-West energy corridor and in the future will be an important source of non-OPEC oil.
OVERVIEW OF U.S. GOVERNMENT ASSISTANCE
In FY 2003, the U.S. Government provided an estimated $90.53 million* in assistance to Azerbaijan:
In FY 2003, some 370 Azerbaijani citizens, traveled to the United States on USG-funded training and exchange programs implemented by USAID and the U.S. Departments of Agriculture, Commerce and State, bringing the cumulative number of Azerbaijani participants to over 2,440.
U.S. ASSISTANCE PRIORITIES
Democratic Reform Programs: In FY 2003, much of the U.S. democratic reform assistance program in Azerbaijan focused on support for a more open society, as well as programs aimed at improving the electoral process in the run-up to the October 2003 presidential election. USG program implementers worked with both governmental and non-governmental bodies, providing assistance to the Central, Constituency and Precinct Election Commissions and the main political parties of Azerbaijan. U.S. assistance also supported a comprehensive independent media program and a variety of projects aimed at promoting and fostering civil society. Academic and professional exchange programs provided opportunities for Azerbaijani citizens to gain first-hand experience with U.S. democratic and market institutions.
Economic and Social-Sector Reform Programs: In FY 2003, USG economic reform programs focused on business development, including support for small and medium-sized enterprises (SMEs) and the ability of local firms to meet international standards. USG assistance also supported banking system reform, enhanced transparency and accountability in government fiscal departments, and assisted in budget reform. USG assistance provided training, equipment, and technical assistance to improve the competitiveness of rural industries, and promoted interregional water-management between Azerbaijan and neighboring states.
Security, Regional Stability, and Law Enforcement Programs: In FY 2003, USG security-related assistance enhanced Azerbaijan’s nonproliferation and anti-terrorism capabilities. The USG provided equipment to support Azerbaijani peacekeeping activities in Afghanistan, Kosovo, and Iraq. Support for regional stability included provision of equipment and training to the Azerbaijan Border Guard Maritime Brigade to improve its ability to conduct law enforcement patrols and interdict weapons of mass destruction (WMD) on the Caspian Sea. Additional assistance to the Land Border Guard and Customs focused on enhancing Azerbaijan's ability to control its borders and prevent the transshipment of WMD, nuclear materials, missile equipment and related technology. Azerbaijan displayed its commitment to halting the spread of WMD expertise by joining the Science and Technology Center - Ukraine (STCU). This international organization, with significant U.S. investment, provides grants to former Soviet weapons scientists for peaceful research. The first USG-funded grant competition through the Azerbaijan National Science Foundation was launched, providing additional funding to a seismic center in Baku that employs former nuclear scientists and collaborates with the neighboring Caucasus countries on mitigating the region’s seismic instability. USG-funded security assistance also promoted regional security cooperation objectives, including pipeline security, seismic and other scientific collaboration and regional anti-terrorism initiatives in the Caspian Sea region. FY 2003 law enforcement assistance included support to strengthen Azerbaijan’s ability to deal with terrorist incidents.
SECTORAL ASSESSMENTS
Democratic Reform
Azerbaijan’s performance on democratization was mixed in FY 2003. Significant rule of law advances included expansion of the jurisdiction of the Constitutional Court to include individual citizens; first time publication of written court decisions by both the Constitutional and Supreme Courts; formation of an independent lawyers’ union; and passage of a judicial ethics code.
Despite the existence of a Constitution mandating the state’s responsibility to protect universally accepted human rights, the lack of a proper mechanism to implement the Constitution and other new laws impeded their enforcement in practice. Corruption remained a fundamental problem and continued to undermine democratic development and respect for the rule of law. The lack of government political will to address these deficiencies in a systematic way was also notable, nor did opposition parties or domestic human rights groups mount an effective challenge to undemocratic government practices due to their frequent infighting and failure to work together. The Constitution provides for freedom of religion; however, there were some abuses and restrictions.
The October 2003 presidential election failed to meet international standards due to a number of serious irregularities. There were nevertheless some positive developments, including the new Unified Election Code, a multiparty choice for voters, and technical improvements that made fraud more difficult to hide. USG-funded transparent ballot boxes made ballot stuffing more difficult and promoted voter confidence. USG funding enabled first-time placement of international observers at each of the 124 Constituency Election Commissions. The election also included the posting of precinct results on the Internet within 24 hours of poll closing for the first time, a positive step for transparency.
However, these elements were overshadowed by the lack of a level playing field for all candidates in the pre-election period and election commissions that behaved in a partisan manner. While individual domestic observers were allowed, non-governmental organizations receiving foreign funding were barred from observing, in contrast to the 1998 presidential election, and some observers reported harassment of monitors and other impediments to election observation. Observers witnessed serious irregularities in vote counting and tabulation, and other areas on election day, and the authorities used excessive force against opposition demonstrators and others after the election. In addition, the authorities conducted a wave of politically motivated post-election detentions and arrests.
In FY 2003, the USG supported press freedom in Azerbaijan by instituting a comprehensive independent media program, which included professional development of journalists and media outlets, media association support, regional support for building linkages with other media in the Caucasus region, and increased access to high quality programming and information. USG media advocacy efforts focused on the draft Law on Public Television, and on protecting the rights of journalists during the pre and post-election period. The USG-supported Press Council has earned widespread acceptance as a respectable, independent media body responsible for monitoring journalistic standards and defending media rights.
Other FY 2003 USG-funded democratization programs promoted development of civil society and rule of law. USG programs worked with municipal councils to strengthen their ability to respond to citizens’ needs; conducted public information sessions on civic responsibilities and the role of municipal councils; and organized "democracy school" programs promoting leadership development and civic awareness. A USG-funded program continued to focus on promoting public knowledge of legal rights; supporting legal reform efforts; helped develop bar associations; supported clinical legal education courses at law faculties; and provided professional training to judges and lawyers. Democracy Commission grants focused on school-community relations, women’s and children’s issues, environmental awareness and community activism, voter participation, expanded cooperation among non-governmental organizations (NGOs), stimulating the development of a market economy at the grassroots level, and promoting independent media. More than 50,000 Azerbaijani citizens participated in these USG-sponsored democratization programs.
In FY 2004, USG programs will continue to strengthen the professional development of media outlets, journalists, advocacy-minded civil society organizations, judges, lawyers, and political parties through specialized training and technical assistance. USG assistance programs will help political parties build constituencies and craft viable platforms based on major issues in the country. Programs will also continue to strengthen the management abilities of media outlets to expand markets and circulation as well as to increase the institutional capacity of civil society organizations so they are better able to advocate for change.
Economic and Social-Sector Reform
In FY 2003, Azerbaijan experienced continued strong economic growth, with GDP growing by almost 9.6%. Macroeconomic indicators remained favorable. Annual inflation was under 3%, and the national currency, the manat, remained stable against the dollar (4,900 manat per U.S. dollar). The State Oil Fund serves as a savings fund for Azerbaijan's energy wealth, with assets of over $800 million by the end of FY 2003. The International Monetary Fund (IMF) continued its three-year $100 million Poverty Reduction and Growth Facility loan program to support the government’s economic reforms, and disbursement of a third tranche of $18 million was approved in May 2003. The government budget deficit is projected at less than two percent of GDP in 2004.
The energy sector continues to dominate Azerbaijan's economy, with oil and gas exports accounting for approximately 90% of Azerbaijan's exports. Azerbaijan expects a substantial surge in oil and gas revenues beginning in 2005, as production from the Azeri-Chirag-Guneshli field ramps up, and as the Baku-Tbilisi-Ceyhan oil pipeline and South Caucasus/Baku-Erzerum gas pipeline come online. Current projections, however, are for those revenues to begin to decline beginning in 2011-12 if no additional substantial oil and gas reserves are discovered. Thus, it is imperative that Azerbaijan diversify its economy and improve conditions in the non-energy sector.
Azerbaijan remains a difficult place to do business, and corruption is a serious impediment to full economic development. Yet the government has taken steps to improve the business climate and diversify the economy. In 2003 the Government established a National Entrepreneurs’ Support Fund to support SMEs, streamlined the business licensing process, and took steps to improve tax administration. An Entrepreneurs' Council consisting of domestic and foreign companies and reporting to the President first convened in July 2003.
Donor coordination of economic and social assistance to Azerbaijan was good, helping to avoid duplication. The USG cooperated with the European Union on rule of law; the U.K., Dutch, and German governments and the OSCE on election support; the Council of Europe on municipality assistance, and the World Bank and the IMF on financial and energy sector reforms.
USG economic assistance efforts focused on technical assistance to improve transparency in government operations, and to promote development of the non-oil sector of the economy. USG technical support helped the Government of Azerbaijan maintain sound macroeconomic policies. Technical assistance to the financial sector included work with the central bank to strengthen its supervisory function and to modernize the legal regime for commercial banking. The USG also provided technical assistance to the Ministry of Finance for implementation of the budget system law, which will greatly improve transparency in the preparation and presentation of the state budget.
Another USG-supported initiative, the Treasury Information Management System, is working to automate treasury operations at Azerbaijan’s Ministry of Finance, resulting in greatly enhanced transparency and accountability. The USG also provided technical advisors to the Ministry of Taxation, who developed training materials, advised the Ministry on needed changes to the Tax Code, and provided strategic planning training for senior Ministry officials. In FY 2003, the U.S. Trade and Development Agency (USTDA) funded the placement of a long-term resident World Trade Organization (WTO) accession advisor at the Ministry of Economic Development.
USG assistance to the agricultural sector increased access to credit, improved the use of agricultural inputs, and improved the quality and safety of agricultural products. USG-funded rural credit activities provided more than $6 million in credit to agricultural producers in FY 2003 in several regions otherwise devoid of such credit opportunities. USG programs provided training, equipment, and technical assistance to core rural industries, resulting in the formation of 333 enterprises and an average 200% increase in the income of beneficiaries. SMEs were received extensive USG-funded training, consultations and other technical assistance. Sales at assisted enterprises increased by $4.5 million, and over 600 new jobs were created.
USG funds also supported environmental protection. Six Democracy Commission grants were awarded to promote environmental awareness in conjunction with Earth Day 2003. The U.S. Ambassador and Embassy officers attended Earth Day school programs, community clean-up efforts, and tree-planting ceremonies, with extensive media coverage. This is the first time that Earth Day has received such recognition and community and school activism has taken place on such a broad scale.
In September 2003, the USG launched the "Energy Sector Reform in Azerbaijan" (ESRA) program, whose objective is to improve the financial operation of the domestic electricity and natural gas subsectors and to develop the regulatory, market and organizational structure of each subsector. ESRA will also assist in attracting investment capital for physical infrastructure improvements needed to achieve a more efficient energy supply to all consumer groups.
FY 2003 USG funds also supported the South Caucasus Water Management Initiative, a regional environmental cooperation program that contributed to improved regional water management by increasing cooperation and collaboration in this area among the three Caucasus countries, integrating river basin planning for the water resources of the Kura-Aras basin; and developing bilateral agreements for water resource planning.
In FY 2003 a health partnership project was implemented between three Baku hospitals in the districts that serve the majority of internally displaced persons (IDPs) and hospitals from Oregon, Virginia and Texas. The partnership provided staff capacity-building exchanges in primary health care, established a Women’s Wellness Center, and worked with those hospitals and health providers to improve health services. The 20% increase in visits to USG-assisted community health clinics in FY 2003 is one measure of success of USG-supported health programs.
In FY 2003, the Azerbaijani and U.S. Governments concluded an agreement to establish a Peace Corps program in Azerbaijan. While the focus of the initial program is teaching English as a foreign language, it is expected that in the future, volunteers will also focus on rural development.
In FY 2004, the USG program to accelerate the growth and development of private SMEs will continue to focus on expanding access to micro- and SME credit, improving business and technical skills, strengthening producer and processor associations, and improving the use of production inputs. Economic reform programs will focus on strengthening the banking sector, improving financial management practices, and encouraging regulatory reform in the energy sector. The IMF has identified management and expenditure of the State Oil Fund as a priority. USG assistance programs will be increasingly focused on supporting these priority areas as Azerbaijan looks to spend its anticipated oil wealth. USTDA is studying the possibility of launching several new assistance programs in FY 2004 involving management of the State Oil Fund, modernization of the State Oil Company, and tourism sector development.
Security, Regional Stability, and Law Enforcement
In FY 2003, Azerbaijan continued to show a strong commitment to nonproliferation and the interdiction of shipments of concern. The Export Control and Related Border Security (EXBS) program had two resident advisors in Baku to implement an integrated land and maritime nonproliferation program. Azerbaijan received a former U.S. Coast Guard cutter through the Excess Defense Article (EDA) Program in September 2003. The USG provided the Azerbaijan Border Guard Maritime Brigade (MB) with equipment and training to improve its ability to conduct maritime law enforcement patrols and interdict WMD on the Caspian Sea. The USG provided high-frequency radios and radar equipment for the MB's vessels and communication center, and funded the construction and outfitting of a coastal radar system in southern Azerbaijan. As a result, the MB significantly increased its days underway, boardings, and interdictions this fiscal year. Assistance to the Land Border Guard and Customs Service focused on enhancing Azerbaijan's ability to control its borders and prevent the transshipment of WMD, nuclear and radioactive materials, delivery systems and related technology, and improving the communication capability between headquarters, regional stations, and border posts through the provision of equipment.
In FY 2003, the USG continued its Anti-Terrorism Assistance, training 56 Azerbaijani officials in courses designed to strengthen the country’s ability to deal with terrorist incidents. As a result, the Government of Azerbaijan has formed a Pipeline Security Curriculum Task Group. In FY 2003, the USG also continued to provide law enforcement, counter-narcotics, and criminal justice system assistance.
During FY 2003, the U.S. European Command (EUCOM) provided security training to Azerbaijani armed forces under the Partnership for Peace program. These exercises and other EUCOM-sponsored training for Azerbaijani officers helped improve interoperability with NATO and U.S. forces, and directly affected Azerbaijani contributions to the Global War on Terror and peacekeeping participation in Operation Iraqi Freedom. In FY 2003, the U.S. Embassy’s Office of Defense Coordination (ODC) used Foreign Military Financing (FMF) and peacekeeping grants to purchase tactical radios and peacekeeping gear, enabling the Azerbaijani Peacekeeping Battalion to equip and augment its efforts in Kosovo, Afghanistan and Iraq.
A Justice Department resident legal advisor arrived in Baku in early FY 2004, and is helping Azerbaijan develop a comprehensive anti-terrorism regime; draft anti-money laundering legislation that complies with international standards; implement the new Criminal Procedure Code; train prosecutors and investigators in priority crimes; reform the procuracy to meet international standards; and enhance institutional integrity and professionalism. USG assistance will also help Azerbaijan implement a strategy to combat trafficking in persons, with a focus on encouraging adoption of legislation in accordance with the Palermo Protocol; establishing a special anti-trafficking police force; increasing government and public awareness of the dangers of trafficking; and supporting viable NGOs that can provide assistance to trafficking victims.
Counterterrorism will remain the USG’s top security assistance priority in Azerbaijan in FY 2004. Aggressive programs to strengthen Azerbaijan's capabilities to combat terrorism and related transnational threats will continue. USG programs are being coordinated to support development of an interagency crisis management capability that will facilitate a comprehensive response to acts of terrorism, threats to pipeline security, natural disasters, and preventing trafficking in persons, WMD, criminal elements, and narcotics. U.S. Defense Department (DoD) Cooperative Threat Reduction (CTR) assistance will continue to strengthen Azerbaijan's capability to interdict WMD trafficking through the Caspian Sea. Future USG security assistance priorities also include expanded English language training and regional security cooperation objectives that emphasize regional security initiatives in the area of anti-terrorism in the Caspian region.
In FY 2004, the USG hopes to expand its efforts to promote regional science cooperation. Former WMD scientists will be able to obtain funding for cooperative research from the STCU. Azerbaijan is also eligible to apply for grants from the Azerbaijan National Science Foundation and from the U.S. Civilian Research & Development Foundation (CRDF), which encourages regional cooperation between the ANSF and sister organizations in Armenia and Georgia.
Humanitarian Assistance
Azerbaijan continues to require significant humanitarian assistance to deal with the after-effects of the conflict between Armenia and Azerbaijan over Nagorno-Karabakh. USG programs focus on assistance to displaced persons and humanitarian demining. In FY 2003, the USG continued to focus on making the transition from meeting basic humanitarian needs to promoting longer-term sustainable economic development through community-led programs aimed at the private sector.
In FY 2003, FREEDOM Support Act-funded humanitarian assistance was valued at nearly $22 million and included six airlifts of critical medicines and medical supplies and over 100 containers of surface-shipped medical equipment and supplies, clothing, food, and emergency shelter items. These efforts were focused on meeting the basic humanitarian needs of IDPs.
The largest DoD humanitarian assistance project in Azerbaijan during FY 2003 was a $2.5 million demining program, which included training in humanitarian demining provided by U.S. European Command (EUCOM) to the Azerbaijan National Agency for Mine Action (ANAMA). In FY 2004, DoD will help ANAMA develop its operational capacity and will assist it in enhancing its mine-risk awareness and victim assistance programs.
ODC provided over $300,000 in humanitarian aid in FY 2003. USG funds were used to construct additions to four schools, providing proper facilities to more than 1,000 students. ODC also financed infrastructure upgrades including a water project that brought water to two villages, and is working with international non-profit organizations to identify additional humanitarian projects for FY 2004.
COUNTRY PERFORMANCE MEASURES
Azerbaijan registered positive economic growth in FY 2003, although its economy remains overly dependent on oil revenues. Corruption and the lack of economic diversification remain serious challenges to reform. Progress on democracy was uneven, with advances in the rule of law overshadowed by the failure of the presidential election to meet international standards and a wave of politically motivated post-election arrests and detentions.
Democratic Reforms Ratings of democratic freedoms are from Freedom House, Nations in Transit 2003 (2003) and cover events through December 2002. Economic policy reform ratings are from EBRD, Transition Report 2002 (November 2002), and cover events through September 2002. Economic policy reforms include price liberalization, trade and foreign exchange, privatization, legal, banking and capital markets, enterprise restructuring (credit and subsidy policy), and infrastructure reforms. Democratic freedoms include political rights (free and fair elections; openness of the political system to competing political parties and to minority group representation; governance and public administration) and civil liberties (free media and judiciary; freedom to develop NGOs and trade unions; equality of opportunity and freedom from corruption). Ratings are based on a scale of 1 to 5, with 5 representing the most advanced.
The estimated increase in the private sector’s share of GDP indicates some progress in expanding the non-oil sector of the economy, but not in privatization. Poverty continued to be a problem, with overall GDP below the 1989 baseline.
Economic Structure and Human Development in Azerbaijan, 1991-2002
Human Capital Index
The Human Capital Index is based on an average rating of four variables scored on a scale of 1 to 10: per capita income, secondary school enrollment, health, as measured by life expectancy and under-five mortality, and public policy, as measured by public expenditure on health and education as % of GDP. World Bank, World Development Indicators 2003 (2003); and UNICEF, Social Monitor 2003 (2003). Private-sector share of GDP is from EBRD, Transition Report Update (May 2003).
SECTORAL PERFORMANCE MEASURES
DEMOCRATIC REFORM
Performance Indicator: Freedom House Nations in Transit 2003 Independent Media rating (1 = highest, 7 = lowest; data based on previous calendar year)
FY 2003 Results: Media freedom improved marginally in FY 2003, but not enough to grade it above the prior-year baseline. Progress was uneven, with movement forward in some areas offset by movement backwards in others. While opposition print media continued to exist and openly criticize the government, national television news coverage continued under highly partisan government or pro-government control. A proposed new Public Television Law that will theoretically introduce non-partisan national news coverage made progress through the parliament, and is likely to be enacted during FY 2004. While government harassment of opposition and independent media increased noticeably as the presidential election approached, this eased in response to USG and other third party pressure. The print media, particularly the opposition media, continues to be plagued by debts that periodically threaten continued publication. An independent media Press Council was organized in March 2003 and has developed without interference. This body has earned widespread acceptance as a respectable, independent organization responsible for monitoring journalistic standards and defending media rights.
Performance Indicator: Freedom House Nations in Transit 2003 Political Process rating (1 = highest, 7 = lowest; data based on previous calendar year)
FY 2003 Results: In May 2003, the Parliament enacted a new Unified Election Code that substantially increased openness and transparency in election administration, and the press and opposition were allowed considerable freedom, despite continuing harassment. While the subsequent October 2003 presidential election fell short of international standards, most observers concurred that the election was administered with improved technical efficiency. In a notable display of openness, precinct results were posted on the Internet within 24 hours of poll closing. Despite some significant documented incidents of ballot stuffing and fraud, there is little doubt among the general public and most international observers that Ilham Aliyev was the genuine winner, though not by the overwhelming margin claimed. Overall, the election represented an advance in democratization of the political process over previous elections in Azerbaijan, while illustrating that substantial additional progress is needed.
ECONOMIC AND SOCIAL REFORM
Performance Indicator: Private Sector Share of GDP (Source: EBRD and Azerbaijan Ministry of Economic Development (MED) for the FY 2002 baseline, and MED for the preliminary FY 2003 estimate. (The EBRD has not yet developed a FY 2003 figure for this indicator.)
FY 2003 Results: The estimated increase in private-sector share of GDP reflects, in part, a surge in energy-sector-related investment and substantial associated growth in Azerbaijan’s service sector. While it also indicates progress in diversifying the economy and expanding the non-oil sector, it does not reflect any large-scale privatization. The Government of Azerbaijan issued several decrees in 2002-2003 aimed at improving the business and investment climate for private entrepreneurs that, if enforced, will contribute to increased private share of GDP in the future. Official statistics indicate that, on average, non-state sector companies are growing at a significantly faster rate than state-sector companies. Performance Indicator: GDP as a percent of 1989 GDP (1989=100) (Source: European Bank for Reconstruction and Development, Transition Report 2003. (November 2003), and 2002 report)
FY 2003 Results: Like other former Soviet republics, Azerbaijan experienced a sharp decline in economic output following independence; a decline that was reversed only in 1996. Since that time, the economy has experienced major energy-sector and associated service-sector growth, largely driving domestic GDP increases ranging between 8 and 10 percent per year. Other sectors of the economy have made only modest gains, although there are recent indications that both the heavily depressed manufacturing and agricultural sectors may be picking up steam. Nonetheless, overall national GDP remains below the 1989 baseline.
SECURITY, REGIONAL STABILITY, AND LAW ENFORCEMENT
Performance Indicator: Maritime Law Enforcement (Source: U.S Embassy Baku Export Control and Related Border Security (EXBS) assistance program office estimates. Scale of 1-10, 10 = highest.)
FY 2003 Results: With recent additions of equipment and training, the Maritime Brigade of the Azerbaijani Border Guards has stepped up its vigilance in the Caspian Sea. The Cutter S-14 donated under the USG Excess Defense Articles (EDA) program in September 2003, is already yielding dividends and is maintaining a very active patrol schedule with numerous boardings of Azerbaijani, Russian, and Turkmen vessels. Combined days underway increased from 22 in FY 2000 to 205 in FY 2001, and 382 in FY 2002; ship boardings increased from 14 to 24 to 35 over the same period. The total number of vessels prosecuted over the period rose from 8 to 9 to 15. Preliminary results for FY 2003 suggest that results in these categories will be approximately 50% higher than these levels, a better-than-expected performance improvement.
Performance Indicator: Coalition Security Support and Peacekeeping (Source: U.S. Embassy Office of Defense Cooperation (ODC) estimates. Scale of 1-10, 10 = highest)
FY 2003 Results: The FY 2002 baseline reflects Azerbaijani Partnership for Peace (PfP) participation, limited peacekeeping support, and the availability of Azerbaijani airspace as needed to support coalition operations in Afghanistan. In FY 2003, the Azerbaijani Government built on this foundation, resulting in significant improvements in coalition security assistance as relationships developed with the Defense Security Cooperation office of the Ministry of Defense. In FY 2002, Azerbaijan lent its airspace in support of Operation Enduring Freedom. As a direct result of USG assistance, FY 2003 also saw the successful strengthening and enabling of an Azerbaijani peacekeeping battalion that is now contributing to international peacekeeping operations in Kosovo, Afghanistan and Iraq. This effort is a showcase for security assistance and assisted coalition needs by building a niche capability, which can complement and provide support for similar NATO and peacekeeping activities in the future.
FY 2003 FUNDS BUDGETED FOR U.S. GOVERNMENT ASSISTANCE TO AZERBAIJAN TOTAL USG FUNDS BUDGETED: $68.13 (IN MILLIONS, AS OF 12/31/03) FSA FUNDS BUDGETED: $45.94 USAID - Democratic Reform - $6.10 Dept. of State - ECA Public Diplomacy Exchanges - $7.06 Dept. of the Treasury - Technical Advisors - $0.99 NSF - Civilian R&D Foundation (CRDF) - $0.60 OTHER FUNDS BUDGETED: $22.19 USAID - P.L. 480, Title II Food Assistance - $2.97 Dept. of Agriculture (USDA) - PVO / NGO Food Aid Programs - $6.09 Dept. of State - ECA Public Diplomacy Exchanges - $0.53 Dept. of Defense - International Counterproliferation - $0.55 Environmental Protection Agency (EPA) - Environmental Programs $0.27 |
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Area: approx. 53,800 sq. miles, slightly smaller than Maine 
