Azerbaijan holds a unique position in the volatile Caucasus region. Unlike Armenia, which is pro-Moscow and hosts a Russian military base, and Georgia, which has been partially occupied by Russia since the August 2008 war, Azerbaijan has been able to maintain relative independence from Moscow.
The primary driving force behind this independence is energy. Azerbaijan is a significant and growing producer and exporter of both oil and natural gas. These energy supplies have not only been profitable for Azerbaijan, but they have also given Baku a maneuverability in its foreign policy strategy that Armenia and Georgia lack. Instead of being completely aligned with Russia or the West, Azerbaijan has sought to diversify and balance its relationships, pursuing cooperation in the economic and security spheres with countries such as Turkey and Israel. Azerbaijan has also sought to prevent complete alienation from Russia and Iran by cooperating with them in energy and other economic sectors, though tensions still exist based on other issues, such as Iran's support of Islamist elements in Azerbaijan. This ability to balance the influence of its more powerful neighbors has created relatively stable foreign relationships for Baku in a region otherwise fraught with tension.
However, Ivanishvili's election has created a new domestic political environment in Georgia that may have implications for the wider region. While Ivanishvili campaigned on a broadly pro-Western platform and has said that he does not intend to reorient Georgia away from its relationship with the United States and NATO, some have questioned Ivanishvili's intentions due to his lack of political experience prior to 2011 and his relationship with the Kremlin, given that he made his fortune in Russia. Ivanishvili has revealed few details of his plans toward Russia, other than calling for increasing economic ties, which have been almost nonexistent since the 2008 war. However, Ivanishvili has said that all business deals arranged by the previous government would be reviewed and has questioned the viability of Western-oriented projects like the Baku-Tbilisi-Kars railway line, eliciting concern from the West over the new government's commitment to such projects.
At this point, it is too early to tell what trajectory the new Georgian prime minister's administration will take on such issues. Though he achieved victory over President Mikhail Saakashvili in the parliamentary elections in 2012, there are still local and presidential elections planned for 2013 that will test Ivanishvili's ability to consolidate power. But already, Ivanishvili has tried to install allies in key positions and detained many high-level officials from Saakashvili's camp in the economic, security and judicial sectors on grounds of corruption and abuse of power. It will likely take most of the year to fully consolidate power, and presidential elections will not be held until October 2013.
Still, regional players, including Azerbaijan, are positioning themselves so they can establish ties with the new Georgian government in attempts to anticipate and shape its foreign policy direction. With so much at stake, it is in Azerbaijan's interest for Georgia to keep its commitments as a strategic partner and transit state. Azerbaijan will therefore seek to lobby the new Georgian government, likely by offering financial assistance and investment. However, Baku must also contend with a competing vision from Moscow as Tbilisi deals with dynamic domestic politics over the course of the next year. If the situation in Georgia plays out counter to Azerbaijan's interests, Baku may have to become more accommodating to Russia in the energy sphere.
