Azerbaijan’s dual foreign policy strategy toward Israel: a realist alliance and a neoliberal knowledge-based economy cooperation, 2011–2022

Abstract

This paper argues that Azerbaijan’s dual foreign policy strategy toward Israel explains the strengthening of ties between the two states from 2011 to 2022. Most writings usually focus on realist explanations for this process, such as the anti-Iran alliance since the beginning of the 2000s. However, this paper argues that this is a necessary but insufficient explanation and suggests that in 2011, Azerbaijan decided to move to a knowledge-based economy, which encouraged the adoption of a neo-liberal foreign policy alongside a realist one. This new national vision, in turn, brought about the adoption of a dual strategic foreign policy. The process of the states’ strengthening ties since 2011 is in correlation with both strategies and cannot be attributed to either factor alone. This study’s innovative use of a qualitative foreign policy analysis and a quantitative knowledge-based economy analysis may illuminate a new perspective on the strengthening of ties between the Muslim states and Israel.

Keywords:

• Azerbaijan
• Israel
• neoliberal
• economy
• foreign policy

REVIEW EDITOR:

• Samuel Adu-Gyamfi, History and Political Studies, Kwame Nkrumah University of Science and Technology College of Arts and Social Science, Kumasi, Ghana

SUBJECTs:

• Middle East Studies
• Asian Studies
• International Political Economy
• International Relations
• Asian Politics
• History: Theory
• Method & Historiography
• Economic History
• Political History
• Asian History
• World/International History

Introduction

Azerbaijan is a secular Shiite Muslim state that supports the Palestinian cause, yet it is known for its long-standing relations with Israel (Ismayilov, 2013, p. 71–72). These relations have been limited and covert. However, Azerbaijan has been strengthening its ties with Israel since 2011, and in 2022, it announced that it would be opening an embassy in Israel, marking the 30th anniversary of diplomatic relations between the two states (Israeli Ministry of Foreign Affairs, 2022).

As such, there is a question about why Azerbaijan has decided to strengthen its ties with Israel since 2011. Most scholars’ explanations focus on the realist explanations of power balancing in the region, which can be divided into three main claims. First, Azerbaijan and Israel aligned in order to balance their power in the face of a common enemy, Iran (Abbasov & Souleimanov, 2022; Avdaliani, 2020; Bishku, 2009; Cohen & Lev, 2021b; Değirmencioğlu, 2019; Hanjing, 2022; Lim, 2012; Shaffer, 2013; Souleimanov et al., 2014). Second, Azerbaijan strengthening its ties with Israel was intended, in turn, to strengthen its ties with the regional hegemon, the US (Geist Pinfold & Peters, 2021; Zarifian, 2014). Third, and maybe most substantially, Azerbaijan’s security cooperation with Israel helped Azerbaijan strengthen its military power in the Nagorno-Karabakh conflict and the second Nagorno-Karabakh war against Armenia, giving it the status of a regional hegemon (Bar-Shalom, 2022; Idan & Shaffer, 2022; Lindenstrauss, 2015).

However, these explanations fail to address four issues. First, Iran has been a common enemy of both states for decades; thus, the realist explanation does not account for the strengthening of ties since 2011. Second, it ignores internal processes within Azerbaijan. It has undergone various internal reforms, including in its education and technological systems, that have affected its foreign policy toward other knowledge-based economies, such as the EU (Walsh et al., 2020, p. 6; Giyasova, 2019, p. 1533, 1539; Khalilzada, 2019, p. 167). Third, the explanations neglect various multilateral and bilateral cooperations in a multiplex world, such as the growing partnership between Europe and Azerbaijan and Azerbaijan’s involvement in international organizations to achieve mutual prosperity rather than a zero-sum game (Cohen & Lev, 2021b, p. 5; Khalilzada, 2019, p. 167; President of the Republic of Azerbaijan Ilham Aliyev, 2021, p. 47–48; Azerbaijan State News Agency, 2021). Finally, technological procurement by Azerbaijan from Israel has increased dramatically since 2011, showing that the cooperation between the two states has tightened on all fronts (Times of Israel, 2023; Cohen & Lev, 2021b, p. 4–7).

This article posits a supplemental explanation to the question and suggests that alongside the realist explanation, Azerbaijan also decided to strengthen its ties with Israel due to internal strategic decisions to embrace a liberal political, social, and economic model known as the knowledge-based economy (KBE). To achieve such a goal, the Azerbaijani government has pursued a neoliberal foreign policy focused on state and regional growth and prosperity (Armitage & Nye, 2007; Cohen & Lev, 2021b; Göksel, 2015; Hitman & Kertcher, 2018, p. 62–67; Ismayilov, 2013; Jervis, 1999; Souleimanov et al., 2014).

This research highlights that realist explanations are insufficient to explain the full scope of the strengthening of ties between states as globalization in a multiplex world has incentivized even autocratic governments to adopt a KBE, which, in turn, prompts a dual foreign policy: a realist one alongside a neoliberal one. While realism focuses on a bipolar and multipolar system driven by balancing alliances for survival, neoliberal theory centers on multilateral cooperation led by socially constructed regional entities to achieve mutual goals like growth and prosperity (Sørensen et al., 2022, p. 96–97, 130–131). The process of Azerbaijan strengthening ties with Israel since 2011 is in correlation with both foreign policies and cannot be attributed to either factor alone.

The study also contributes to the broader research into why adversary states are strengthening ties and even normalizing relations with Israel in the 21st century. In recent years, several studies have focused on this issue relating to states that are adversaries of Israel, such as Morocco and the UAE (Authors, 2023; Black, 2019; Levi, 2018), but less attention has been paid to Muslim states that maintain distant relations but are not enemies, such as Azerbaijan.

This study comprises five sections. The first offers background details about Azerbaijan and its foreign policy. The second delves into the realist and neoliberal foreign policy research framework. The third presents the methodology, a qualitative and quantitative analysis of Azerbaijan’s adoption and implementation of a KBE policy (the basis for neoliberal KBE cooperation). Fourth, a qualitative analysis of Azerbaijan’s foreign policy from 2011 to 2022 examines the state’s annual speeches in the UN General Debate and additional committees. Finally, the fifth section examines the relations between Azerbaijan and Israel during this period. This mixed methodology helps answer the question: Is the strengthening of ties between the two states a result of Azerbaijan’s dual foreign policy that was decided upon due to its move toward a KBE since 2011?

Background: 1992 to 2022 – a realist foreign policy

Azerbaijan is a secular Shiite Muslim state located in the Caucasus and borders Iran, Russia, Armenia, and Georgia (Avatkov, 2020, p. 126). Scholars usually divide Azerbaijan’s history into three main periods: the post-Soviet period from 1991 to 1993, when Heydar Aliyev rose to power; the period from 1994 to 2003; and a third that began in 2003 with the rise to power of Heydar’s son, Ilham Aliyev (Huseynov 2009; Bölükbaşı 2011, p. 206; Balci 2013; İbrahimov 2013, p. 34). This research suggests that Ilham Aliyev’s period can be further divided into two periods: from 2003 to 2010 and from the KBE reforms in 2011 to 2022.

The first three decades of foreign policy, from 1992 to 2010, were characterized by Azerbaijan’s tendency toward a realist balancing strategy to secure its national independence. Its focus in its foreign policy was the Nagorno-Karabakh conflict, national security, and becoming a regional center of power (Avatkov, 2020, p. 116, 126; Huseynov, 2009; Bölükbaşı, 2011, p. 206; Balci, 2013; İbrahimov, 2013, p. 34).

Azerbaijan’s foreign policy involves diverse cooperation with global actors, extending collaboration to the EU primarily in the technical and economic domains, avoiding a strong political partnership. Notably, Azerbaijan engages with Georgia and Turkey on crucial projects such as the BTC and BTE pipelines and the BTK railway. Additionally, cooperation with Russia and Iran is evident in the joint development of the North-South railway. Alongside this, Azerbaijan also collaborates with Saudi Arabia. The state actively participates in three significant global initiatives: the EU’s TRACECA program, China’s Great Silk Road project, and the North-South corridor connecting Russia, Azerbaijan, and Iran. Finally, since 1992, Turkey, considered a sister state, has been a recognized strategic ally of Azerbaijan, fostering cultural, military, and economic ties (Valiyev, 2017, p. 35–40; Van Gils, 2018, p. 6–8). Such a foreign policy strategy suits the dynamic of a multiplex world.

The Azerbaijani-Israeli relationship began in 1992 with the assistance and influence of Turkey. Therefore, Azerbaijan became the third Muslim state to form relations with Israel after Turkey and Egypt. Yet while Israel opened its embassy in Baku in 1993, Azerbaijan did not reciprocate and preferred to conduct covert and limited relations with Israel (Israeli Ministry of Foreign Affairs, 2022, Göksel, 2015, p. 685). These relations mainly focused on Israeli military assistance in Azerbaijan’s war with Armenia (Marcus, 2009, p. 8). Their realist cooperation focused on three main issues: the oil trade between Azerbaijan and Israel, the Azerbaijanis’ purchase of military equipment, and the US and Israel lobbying for Azerbaijan (Cohen & Lev, 2021b, p. 11; Murinson, 2014, p. 26; İsmayıl, 2013, p. 72). According to the first Azerbaijani president, Abulfas Elçibey, ‘Israel could help Azerbaijan in [the] Karabakh problem by convincing the Americans to stop the Armenians’ (Cohen & Lev, 2021b, p. 10). Yet their cooperation was limited in both volume and scope; it was covert and secretive and conducted mainly between the governments (Ismayilov, 2013, p. 72).

A turning point in the relations can be seen since 2011. First, from the realist perspective, there was a dramatic increase in the balance of the arms trade between the two states, which increased from 28 million dollars between 1992 and 2010 to 860 million dollars between 2011 and 2022 (SIPRI, 2023). Second, on the neoliberal side, the KBE trade increased dramatically between 2010 and 2022. For example, there were increases of 456.146% in chemical products (MedTech, medications, etc.), 205.73% in instruments, 101.867% in machines, and 10.26% in miscellaneous items (OEC 2023a).

The move from overt to covert relations and the growth in their volume and scope were also highlighted when the Azerbaijani Foreign Minister, Jeyhun Bayramov, was interviewed by an Israeli newspaper in 2021. In this interview, he spoke openly about the number of agreements signed between the two states and described the relations between the two states as ‘close and mutually beneficial’ (Azerbaijan Ministry of Foreign Affairs, 2021).

To conclude, between 1992 and 2010, Azerbaijani-Israel relations were mainly based on the realist foreign policy strategy. They were covert, limited in range and volume, and primarily focused on secretive governmental cooperation in limited fields. However, 2011 marked a turning point in the relations between the two states, and ties have since been constantly strengthened.

Research framework: Azerbaijan and its two strategies for its foreign policy

The following section analyses and compares the realist foreign policy strategy and the connection between a KBE and neoliberal foreign policy in a multiplex world. The distinction between the two theories will help us understand whether Azerbaijan has adopted a KBE and how it influenced its foreign policy strategy and strengthening of ties with Israel.

Realism and alliances

The dominant explanation for Azerbaijan’s foreign policy is related to a realist foreign policy strategy. Realists, including scholars such as Waltz (1979, p. 97, 113, 161–95), Mearsheimer (1993, p. 142–143; 2001, p. 29), Schelling (1980) and Lobell et al. (2009, p. 4–7), generally adopt a pessimistic view of human nature, expressing skepticism about the possibility of progress in international politics akin to domestic political life. Grounded in the core assumption of international anarchy among sovereign states, realists perceive world politics as inherently conflictual, often culminating in war as the ultimate resolution.

The emphasis within realism lies on power – its pursuit, means, and application – characterizing international politics as a realm of strategic calculations and rivalries. For realists, the values of national security, state survival, and international stability take precedence, with a distinct separation of morality between the private and public spheres. They prioritize the balance of power as both an empirical and normative concept, advocating for its role in maintaining peace and security.

Structural realists introduced the notions of bipolar and multipolar systems, favoring bipolarity for enhanced international order. Neorealism, epitomized by theorists such as Waltz and Mearsheimer, offers a scientific explanation of international relations based on unequal state capabilities and the anarchical state system. This perspective predicts certain behaviurs from states and asserts that bipolar systems, as witnessed in the Cold War, contribute to greater stability and peace.

According to Waltz, states either balance themselves against strong or threatening states or ‘bandwagon’ with them. He defines a ‘balancing’ alliance as joining together with weaker states to create a strong coalition to prevent a hegemonic bid against them. This is different from a ‘bandwagoning’ alliance, which is about joining an already strong coalition (Waltz, 1979, p. 126). Schweller argues that ‘bandwagoning’ for rewards is the dominant tendency for states – particularly revisionist states that seek to increase, not just preserve, their core values and to improve their position in the international system (Schweller, 1994, p. 87).

The KBE and its connection to globalization

The importance of knowledge in economic performance and human welfare is recognized in economic theory (Dodgson & Gann, 2018, p. 19–21). The concept of a KBE was popularized by Drucker and introduced by Machlup (Rodríguez Andrés et al., 2022, p. 372–373; Machlup, 1962, p. 143). Powell and Snellman (2004, p. 199–201) emphasize the significant dependence of the economy on intellectual abilities in a KBE rather than on physical inputs or natural resources. Other scholars consider a KBE as an economic system where knowledge is a key factor or resource of production and economic prosperity and growth (Becker, 2005, p. 109–110; Dodgson & Gann, 2018, p. 12–32).

Machlup emphasizes the significance of generating knowledge to drive economic expansion through healthy competition, open sharing, and widespread dissemination. A KBE fosters a society centered on learning, which in turn contributes to economic growth and overall prosperity, with the bedrock of economic liberalism supporting it (Machlup, 1962, p. 157–158).

When applying knowledge to the economy, a phenomenon called ‘creative destruction’ occurs, in which old products are replaced by new innovations and technology, thereby increasing competitiveness and creating growth (Grossman & Helpman, 1991, p. 335; Lucas, 1988, p. 37–38; 1993, p. 251–253; Rebelo, 1990, p. 1–2; Romer, 1986, p. 1–3; 1990, p. 1–3). Successful economic growth depends on strategies that involve the sustained use and creation of knowledge (Chen & Dahlman, 2006, p. 1). According to Walsh et al. (2020, p. 1–2), science, technology, and innovation (STI) play a vital role in attaining the UN Sustainable Development Goals (SDGs). Integrating STI into national plans through public policies is deemed essential for their successful implementation.

States that embrace the concept of a KBE demonstrate a commitment to investing in various aspects, such as communication infrastructure, education, favorable science and innovation policy, and collaborative endeavors with other states. This concerted effort aims to foster mutual growth and prosperity, resulting in an intensified search for knowledge, enhanced task coordination, and increased knowledge spillovers between states, creating interdependence. A KBE cannot succeed without cooperation with other states (Feldman, 2000, p. 389; Park, 2001, p. 29, 31).

Neoliberalism and the multiplex world

This kind of cooperation is embodied in neoliberal cooperation. Neoliberalism prioritizes absolute advantage, emphasizing values and international institutions in the global system. This facilitates wealth distribution, fostering growth and prosperity in a globalized world (Selah et al., 2019, p. 114–115; Jervis, 1999, p. 42–63). Economic globalization transforms into a global system, boosting prosperity while reducing state power (Archer et al., 2007). Keohane and Nye (2001) highlight the critical role of interdependence, particularly economic, fostering mutual connections among states and influencing behavior and values (see also Gasiorowski, 1986, p. 24). Non-compliance leaves a state unable to participate effectively globally. Neoliberal foreign policy extends to authoritarian states like China, as seen in their pursuit of economic and institutional cooperation while distancing themselves from liberal values (Boffo et al., 2019, p. 247). This pattern may also apply to autocratic Muslim states.

Acharya (2017, p. 1–8) introduced the concept of ‘post-hegemonic multilateralism,’ which resonates with the emphasis on interdependence in neoliberalism, revealing a nuanced and interconnected evolution in global governance. The dynamics of this approach include complex global and regional interdependence, multi-level governance architecture, and diverse modernities. This perspective captures the ongoing fragmentation of global governance, acknowledging the demand for innovative principles in contrast to the fading international order presented by realism.

Neoliberalism and state cooperation

Globalization has reshaped the autonomy of regions. Acharya argues that regionalism, a cooperative endeavor, is no longer solely controlled by states; it now involves interactions among non-state actors and between states and non-state actors. Regions are not predetermined geographically but are socially constructed entities, continually shaped and reshaped through interactions (Acharya, 2012, p. 10–12).

A state’s selection of a partner to cooperate with is based on its attractiveness to help produce growth and prosperity, as ‘the ability to attract … often leads to acquiescence’ (Nye, 2004, p. 6). Several studies have shown that a state’s adoption of neoliberal policies is a reason for the strengthening of ties between states. These studies agree that shared interests in different fields, such as the economy, may encourage such transformations in foreign relations between states (Hitman & Kertcher, 2018; Kupchan, 2010; Schiff & Kertcher, 2023, p. 1–3).

Long-term conflicts, whether involving military actions or not, are often oversimplified, neglecting the mixed-motive relations between states and the multifaceted nature of their relationships. Blum highlights the collaborative aspects of long-term rivalries, involving both covert and overt cooperation in areas like trade, culture, and energy amid ongoing hostilities (Blum, 2007, p. 32). Additionally, significant policy changes in such conflicts can occur due to shifts in external or internal factors, such as changes in leadership and technology (Schiff & Kertcher, 2023, p. 4–5).

According to Hitman and Kertcher, the strengthening of ties between different Muslim states and Israel can take shape through various forms of short- or long-term political, security, economic, and cultural cooperation. They show that the Muslim-Israeli conflict is undergoing multi-dyadic conflict resolution processes that are not necessarily sequential; rather, it exists on different levels, in different periods, and for different reasons (2018, p. 53–54, 68–69). Many scholars recognize that the South, including Muslim states, does not form a single political entity with a unified adherence to shared social identity, norms, institutions, regulations, and interests (Acharya, 2017, p. 271 − 285; 2022, p. 265 − 270; Adler, 2019, p. 1; Kertcher, 2023, p. 2–5; Kertcher & Turin, 2023; Reus-Smit, 2018).

Muslim states, as proposed by Hitman and Kertcher (2018, p. 56–57), are divided into four categories in relation to Israel: Palestine; Muslim state and non-state actors that wish to preserve the characteristics of the Israeli-Palestinian conflict as being an intractable conflict, such as Syria and Iran; neighboring states that have signed a peace agreement with Israel, such as Jordan (1994) and Egypt (1979); and states that have been strengthening ties with Israel in recent years and traditionally continue to condemn Israel’s treatment of the Palestinians but do not gain anything from the continuation of the conflict and are only harmed by global terrorism, such as Morocco, the UAE, and Azerbaijan.

In summary, while realism focuses on a bipolar and multipolar system led by balancing alliances for survival, the neoliberal theory focuses on multilateral cooperation led by socially constructed regional entities to achieve a mutual goal, such as growth and prosperity. In this multiplex world, the South, including Muslim states, is not one single political entity. Therefore, when assessing Azerbaijan and its cooperation with Israel, it can be seen that, while it supports the Palestinians overtly, it does not have much to gain from the Israeli-Palestinian conflict and has more to gain from cooperation with Israel through neoliberal KBE-based cooperation.

While realist cooperation is governmental and military, often covert and limited in range and volume, neoliberal cooperation is multifaceted, often overt, includes a larger volume and range of actions, and is based on mutual values, such as growth and prosperity. This cooperation also shows the connection between a state’s internal KBE policies and its foreign policy strategy.

The article suggests that Azerbaijan has been moving toward a KBE and, therefore, has adopted a neoliberal foreign policy. In turn, it has sought other states to help it advance its KBE, resulting in the strengthening of ties with Israel since 2011.

Methodology

In order to answer the research questions, this study uses a mixed methodology comprising qualitative and quantitative analysis. The study is guided by three questions: how can we identify the transformation of a state toward a KBE; how can we identify the adoption of a neoliberal foreign policy analysis; and what are the indicators of the strengthening of relations between states?

Since the first question aims to identify if Azerbaijan is moving toward a KBE, the first part examines how the state was transformed to adopt a KBE policy. The study uses a qualitative empirical policy analysis to examine the implementation and impact of existing and new policies (Dunn, 2015, p. 3–7). The research also identifies a qualitative increase in Azerbaijani investment in a KBE from 1992 to 2022. Many methods are used in the literature to identify such increases, so this research uses measurements from the method of Afzal and Lawrey (2012). The five measurements related to KBE parameters (trade, innovation, and education) are as follows: protection of intellectual property rights (the basis of a KBE); scientific R&D expenditure as a percentage of GDP; education expenditure as a percentage of GDP; share of ICT goods as a percentage of total imports; and share of ICT goods as a percentage of total exports.

The years selected for measurement between 1992 and 2022 (taken from the historical background) are as follows: 2020 (the latest available data), 2011 (the year in which the first KBE plan was launched), 2004 (when Ilham Aliyev rose to power), and 1995/6 (nearest available data to the start of the Azerbaijani-Israeli relationship in 1992). The percentage increase or decrease between measurement points (1992 compared to 2020, 1992 compared to 2011, and 2011 compared to 2020) are also presented to show the growth differentiations. The data is collected from various intergovernmental organizations (IGOs): the World Bank, the Economic Freedom Index, and UNCTADstat (see Appendix).

The second question aims to understand if the move to a KBE affected Azerbaijan’s choice of pursuing a dual foreign policy. This part will track the presence of realist and neoliberal KBE strategies in official Azerbaijani foreign policy statements in order to understand if a dual foreign policy was adopted. Using Peterson’s (2006, p. 80) and Kertcher’s (2021, p. 561) arguments on the importance of UN deliberations, this study compares deliberations by Azerbaijani officials at the annual UN General Assembly debates before and after 2011. This analysis is supported by Azerbaijani foreign policy documents.

The third part aims to understand how Azerbaijan’s dual realist and neoliberal foreign policy was reflected in its relations with Israel and influenced the strengthening of ties. This process will be examined by studying official Israeli and Azerbaijani sources and is supported by secondary literature and articles from mainly Israeli news outlets, such as Israel Hayom, Jpost, and Ynet, and reports from the Azerbaijani and Israeli Ministries of Foreign Affairs. Hebrew sources are predominantly used because of the lack of media transparency in Azerbaijan. The research examines the states’ KBE-based cooperation: innovation cooperation (including technology and science) and educational cooperation (including R&D and science). Additionally, the research examines defense cooperation from a realist perspective. This section thus examines four main parameters to identify whether there was a change: a shift from covert to overt cooperation, increased volume, increased scope, and a shift from government-based cooperation to cooperation among businesses and people.

Part 1: Azerbaijan’s plans to adopt a KBE

Since 2011, the Azerbaijani economy has been steered toward a KBE from an oil-based economy. This section presents this transition to a KBE that influenced Azerbaijan’s foreign policy strategy. Between 2011 and 2022, the government of Azerbaijan launched many plans to move the economy toward a KBE. This national strategy was reflected in the adoption of an official national strategy, a series of legislative actions, and the reorganization of ministries and budget allocations. After a review of the policies, this section explains the empirical supportive evidence for the transformation.

In 2011, the government drafted the ‘Azerbaijan 2020 – Outlook into the Future’ plan. This document, published in 2012, details an extensive plan to move Azerbaijan to a KBE in the education, innovation, and economic and global trade sectors (Azerbaijan Government, 2012, p. 6–7). Additional plans were put in place to detail how to achieve a KBE in education, science, technology, and trade: the ‘National Strategy for the Development of Education’ (NEPC, 2021, p. 17), the ‘National Strategy for Information Society Development in Azerbaijan for 2014–2020’ (Azerbaijan Government, 2014a), the ‘State Program for Industrial Development for the Period 2015–2020’ (Azerbaijan Government, 2014b), the ‘Strategic Roadmap for Azerbaijan’s National Economy Perspectives’ (Azerbaijan Government, 2016a, p. 3) and the state program ‘Youth of Azerbaijan in 2017–2021’ (Aslanbayova, 2021, p. 7).

Beyond the national strategic plans, several laws were enacted in order to move to a KBE in the education, innovation, domestic economy, and global economy sectors. The 2016 law on science emphasized the importance of integrating science and education with the economy while also encouraging scientists’ entrepreneurship and innovation to contribute to competitive scientific-technological development in the state (Azerbaijan Government, 2016b). The 2018 law on vocational education and training aimed to increase the effectiveness of vocational training in ensuring a qualified workforce for Azerbaijan’s economy and labor market (Pillay & Zaur,2020 p. 6).

Following these national plans and related legislation, the government restructured many of its offices and organizations to achieve a KBE. Firstly, the responsibility for executing plans was distributed among different government offices. For instance, the ‘State Program on Industrial Development for the Period 2015–2020’ was charged to the Ministry of Economy and Industry, the Ministry of Education, the Ministry of Foreign Affairs, the Azerbaijan National Academy of Sciences, and the Ministry of Communications and High Technologies.

Secondly, some government offices were reorganized. For example, the Ministry of Transport, Communications, and High Technologies was established in 2013 by merging the Ministry of Transport with the Ministry of Communications and High Technologies. The Ministry of Economy was merged with the Ministry of Taxation in 2019 to enhance state policies in entrepreneurship and transparency. In addition, the Innovation Agency was established under the Ministry of Transport, Communications, and High Technologies in 2018. Some offices were opened directly under the president, such as the State Agency for Public Service and Social Innovations and the High Technologies Park. These were established in 2012 and 2016, respectively, to provide coordinated access to various government services and to expand technology production and innovation (Azerbaijan Government, 2014b; Azerbaijan Innovation Agency, 2022; Azerbaijan Ministry of Economy, 2022; Azerbaijan Ministry of Transport & Communications & High Technologies, 2013; Azerbaijan State Agency for Public Service & Social Innovations, 2022; IASP, 2022).

Azerbaijan’s government has evidently been striving to adopt a KBE model to create growth and prosperity since 2011. Various plans, laws, and government office reconstructions were implemented to move the economy toward a KBE.

The restructuring of Azerbaijan’s economy toward a KBE has clearly impacted its economy, as can be seen in three parameters: a KBE analysis from 2011 to 2022, the increase in KBE investment in the national Azerbaijani budget, and the increase in trade with other KBE states.

The first parameter identifies a qualitative increase in the Azerbaijani government’s investment in a KBE (see Appendix). Using the five measurements of a KBE based on Afzal and Lawrey’s method (2012) from 1995/6, 2004, 2011, and 2020, two conclusions can be drawn. First, there is a constant steady increase from 1995 to 2020 in four out of five measurements: protection of intellectual property rights from 3.01 (see appendix) in 1995 to 6.81 in 2020; education expenditure as a percentage of GDP from 3.3 in 1995 to 4.3 in 2020; share of ICT goods as a percentage of total imports from 3.47 in 2004 to 5.86 in 2020; and share of ICT goods as a percentage of total exports from 0.01 in 2004 to 0.14 in 2020. Second, there is a general decrease from 1995 to 2011, but from the move to a KBE in 2011 to 2020, there is an increase in four out of five measurements, including scientific R&D expenditure as a percentage of GDP increasing from -12% to 5%; education expenditure as a percentage of GDP from -27% to 79%; and share of ICT goods as a percentage of total imports from -0.3% to 69%. These findings mean that while there was no major increase, the Azerbaijani government has been investing in a KBE since 2011 with slow but steady growth.

The second parameter is the increase in the national budget, which grew substantially from 2009 to 2020 for offices that are significant for the KBE. For example, the budget for the Ministry of Foreign Affairs grew by 52.2986%, the budget for the Ministry of Economy grew by 1282.67%, and the budget of the Ministry for Transport, Communication, and High Technologies grew by 1104.62%. The most substantial increase was for the Ministry of Education, which rose by 36377.8%, making it the most well-funded ministry in 2020. As such, there was a significant increase in budget allocation for all areas related to the KBE (Decree of the President of the Republic of Azerbaijan, 2010; Accounting Chamber of the Republic of Azerbaijan, 2020, p. 189–194). Furthermore, costs related to the implementation of social policy were the heaviest in the state budget and in terms of their ratio to GDP (in percentage terms) (Accounting Chamber of the Republic of Azerbaijan, 2022, p. 60–61).

The final parameter is the volume and range of trade. There was an increase in trade with KBE-based states in Western Europe in the period examined, which came at the expense of states such as Russia, Turkey, and Iran (WIIS, 2022). Furthermore, when examining the US, the UK, and Germany, there were increases in neoliberal KBE trade cooperation for Azerbaijani imports: an increase of 185.938% in chemical products (such as biotech, medication, and pharmaceutical drugs), 160.407% in instruments, 45.146% in machines, 16.7464% in miscellaneous, and 26.4% in transportation. While the realist arms trade was still high with the US, the UK, and Germany, it decreased by 82.2417% (OEC, 2023b).

In conclusion, an analysis of the qualitative and quantitative data proves that Azerbaijan is investing in a move to a KBE. While the increases are not major, they still point to a steady trend in all KBE sectors.

Part 2: Azerbaijan’s dual foreign policy – realist alliances and neoliberal cooperation

Following the Azerbaijani attempt to move to a KBE, the main question that arises is how this influenced Azerbaijan’s foreign policy strategy. To answer this question, the following section presents the turning point in Azerbaijani foreign policy when it adopted a dual neoliberal and realist foreign policy in 2011 and emphasizes Azerbaijan’s speeches at the annual UN General Assembly debates from 2011 to 2022. The findings reveal a transformation in the official policy.

Azerbaijan’s foreign policy in the previous period, from 1992 to 2010, was mainly a power-balancing realist approach that focused on the Nagorno-Karabakh conflict, national security, and becoming a regional center of power (Avatkov, 2020, p. 116, 126). During the KBE period from 2011 to 2022, Azerbaijan continued its realist balance of power when dealing with Armenia, but it also put considerable emphasis on a second new pillar: neoliberal cooperation.

During this period, economic development and global economic cooperation, such as space cooperation, electrical engineering, and green energy zones, received additional importance and were prioritized as speaking points. While the Azerbaijan-Armenia conflict was previously usually the first subject of discussion, most speeches in this period begin with the importance of economic cooperation. For example, the 2013 speech highlighted the importance of information and communication technology (ICT) for the first time (UNGA, 2013, p. 46), and the 2017 speech highlighted the importance of innovation (UNGA, 2017, p. 9).

This is also the case when examining the Ministry of Foreign Affairs website. The main focus of Azerbaijan’s foreign policy is on bilateral, multilateral, and international cooperation in the fields of education, economic cooperation, trade, innovation, and human rights with states, regions, NGOs, and IGOs (Azerbaijan Ministry of Foreign Affairs, 2022). These topics can be seen in representatives’ speeches in other forums, such as in 2021, when Azerbaijan’s speech at GUAM, a regional IGO, focused on bilateral and multilateral cooperation and on welcoming Israel to the GUAM council (Azerbaijan Ministry of Foreign Affairs, 2021).

Azerbaijan’s representatives also use neoliberal terminology such as human rights, humanitarian aid, women’s and children’s rights, religious freedom, environmental issues, cultural tolerance, and tolerance toward Islam. Furthermore, Azerbaijan focuses on ending conflicts and peaceful resolutions by providing aid to troubled areas such as Syria, the Middle East, and the Palestinians (UNGA, 2011–2021).

In conclusion, this section helps us answer the question of whether the move to a KBE influenced Azerbaijan’s foreign policy strategy. Azerbaijan has been pursuing a dual foreign policy since 2011. On the one hand, it has continued its realist foreign policy with regard primarily to Armenia from the previous period. However, since 2011, it has also adopted a neoliberal foreign policy focusing on multilateral and bilateral cooperation, participation in international organizations, regional cooperation, and Western values to increase growth and prosperity.

Part 3: the correlation between Azerbaijan’s dual foreign policy and the strengthening of ties with Israel

The previous two parts have shown that Azerbaijan has attempted to adopt a KBE, which, in turn, affected its foreign policy, creating a turning point in 2011 and causing it to adopt a dual foreign policy. This section seeks to understand the correlation between this dual foreign policy and the strengthening of Azerbaijan’s ties with Israel by examining four criteria: moving from covert to overt cooperation, increased volume, increased range, and moving from government-based cooperation to cooperation among businesses and people.

The increase in public diplomacy relations

While most diplomatic meetings were covert and secretive during the previous period, public diplomacy relations have moved from covert to overt since 2011. This shift can be seen in interviews with public officials. For instance, the Azerbaijani Foreign Minister, Jeyhun Bayramov, defined the relations between the two states in a 2021 interview as ‘close and mutually beneficial.’ He also mentioned that ‘[t]o boost our cooperation, we have already signed more than ten agreements, while 20 more drafts are under consideration’ (Azerbaijan Ministry of Foreign Affairs, 2021).

Second, the shift can be noticed by increased public diplomatic visits and meetings. The Israeli Minister of Foreign Affairs, Avigdor Lieberman, made several official visits to Baku in April 2012 and April 2014 (Göksel, 2015, p. 659). In April 2013, there was a first high-level visit to Israel from the Minister of Foreign Affairs of Azerbaijan, Elmer Mammadyarov (Lindenstrauss, 2015, p. 62, 66). In September 2014, Moshe Ya’alon was the first Israeli Defense Minister to visit Azerbaijan, and in 2015, Mammadyarov met with Silvan Shalom, Israeli Minister of National Infrastructure, Energy, and Water Resources, to discuss technological cooperation in this area (Azerbaijan Ministry of Foreign Affairs, 2015). In 2016, Israeli Prime Minister Benjamin Netanyahu visited Azerbaijan to discuss security and economic matters (Israeli Ministry of Foreign Affairs, 2016). In 2017, the Azerbaijani Minister of Defence, Zakir Hasanov, visited Israel to discuss technological cooperation (Idan & Shaffer, 2022).

Third, a shift can also be seen in public diplomatic gestures. As mentioned before, in 2021, Azerbaijan welcomed Israel to GUAM, a regional cooperation council for democracy and economic development (Azerbaijan Ministry of Foreign Affairs, 2021). Later, in 2022, Azerbaijan announced it would open an embassy in Tel Aviv (Israeli Ministry of Foreign Affairs, 2022).

Neoliberal cooperation

States that adopt a KBE invest in education, science, innovation, and cooperation with other states (Feldman, 2000, p. 389; Park, 2001, p. 29, 31). This subsection presents the increase in innovation cooperation and educational cooperation between Azerbaijan and Israel since 2011. This neoliberal cooperation evidences an increase in both the volume and range and describes who is involved.

Innovation cooperation

This section deals with the increase in innovation cooperation between Azerbaijan and Israel, which can be seen in public statements, meetings, agreements, and trade volume. The section emphasizes the increase in trade volume, the range of trade, and overt and business-oriented cooperation.

First, trade volume and range increased dramatically. When examining the types of imports from Israel, it can be seen that KBE trade has increased across the board since 2011: there was an increase of 456.146% in chemical products, 205.73% in instruments, 101.867% in machines, and 10.26% in miscellaneous goods (OEC, 2023a).

Second, the range of types of cooperation grew and can be seen in public statements regarding this cooperation, which were rare before 2011. In an interview with Israel Hayom in 2015, the Azerbaijani Deputy Minister of Economy and Industry, Sevinj Hasanova, said, ‘Due to the drop in the world oil prices, Azerbaijan is now interested in increasing cooperation in other channels… This creates an opportunity to open the business sector to other alternatives.’ Hasanova mentioned the medicine, hi-tech, water, and especially agriculture sectors as fields of cooperation with Israel. She added that 39 Israeli companies, including Shikun & Binui and Netafim, are active in the country with contracts amounting to more than 360 million dollars. Furthermore, Hasanova said, ‘Last year [2014], Israel was our fifth-largest trading partner, after Italy, Russia, Malaysia, and Germany. A considerable amount of oil goes to Israel, but it is possible to get more out of the relationship in the future and increase cooperation’ (Frankel, 2015).

Overt cooperation and agreements in different KBE sectors have also developed since 2011. First, in 2013, the Azerbaijan–Israel Chamber of Commerce began operations. This cooperation expanded into the agricultural technology sphere (agro-tech), a sector in which Israel has specialized experience (Cohen & Lev, 2021b, p. 13). In 2013, the two states prepared a draft agreement on further technological agricultural cooperation, and many other economic agreements were signed during Netanyahu’s visit to Baku in 2016 (Cohen & Lev, 2021b, p. 13; Souleimanov et al., 2014, p. 479). In 2021, their agro-tech cooperation was called ‘An ancient tradition and culture in conjunction with technological progress’ (Israeli Ministry of Foreign Affairs 2021). In 2022, an Israeli delegation from the Ministry of Agriculture flew to Baku to establish cooperation with agro-tech companies and the wheat and milk industry (Gorodinsky, 2022).

Finally, in 2018, a joint Azerbaijani and Israeli committee met (the next meeting occurred in 2021), led by the Israeli Minister of Foreign Affairs, Gabi Ashkenazi, and the Azerbaijani Minister of Economy, Mikayil Jabbarov. During this meeting, Azerbaijan decided to open an office in Israel to promote tourism and trade. They also agreed to create a cooperation document in the field of health, establish an inter-ministerial working group in the field of technological agriculture, and create a memorandum of understanding for cooperation in the field of water and desalination technology (Israeli Ministry of Foreign Affairs, 2021).

Educational cooperation

An important element of the KBE is scientific and technological education, and the two states’ cooperation in this field has grown substantially since 2011. During the previous period, there was almost no educational cooperation, but there has since been an overt increase that includes various technological fields with leading academic institutions.

For example, in December 2022, the Azerbaijani Deputy to the Minister of Foreign Affairs, Fariz Rzayev, visited Israel and requested a meeting with leading academic scholars (personal notes, 2022). During this visit, there were additional meetings between MASHAV, an Israeli agency that supplies aid and technology to developing states, and Azerbaijan’s International Development Agency (AIDA) (Azerbaijan Ministry of Foreign Affairs 2022).

In 2022, the Israeli Ministry of Foreign Affairs published a tender for organizations to support local authorities for education initiatives that promote introductions, dialogue, and regional partnerships among children and youth in the region, including Azerbaijan (Israeli Ministry of Foreign Affairs, 2022a). Another tender was published to support local authorities for cultural and sports regional partnerships that promote regional cooperation (Israeli Ministry of Foreign Affairs, 2022b).

Finally, in June 2022, an agreement was established between Azerbaijan’s Ministry of Digital Development and Transportation and Israel’s Technion University, resulting in the establishment of a cyber security center. Technion University personnel impart ICT and cyber security knowledge at the center, which aims to produce more than 1,000 ICT professionals within the next three years. The Azerbaijan-Israel Training Center at the Azerbaijan State Oil and Industry University is an effective example of incorporating foreign expertise to train personnel in IT education and training. Furthermore, the Israeli company AS Holdings has also established a practical cyber education program for executives, technicians, and youth in Azerbaijan, and the formation of dedicated courses and a separate School of IT and Engineering at ADA University plays a crucial role in personnel training. Since 2013, the school has produced numerous ICT specialists with professional expertise (Nagiyev, 2022).

The realist alliance

Cooperation between Azerbaijan and Israel is also reflected in their increasing security and military governmental cooperation that can be attributed to realist foreign policy. This military cooperation has become overt, and the finances involved have also increased dramatically, rising from 28 million dollars in 1992–2010 to 860 million dollars in 2011–2022 (SIPRI, 2021).

During this period, there was a major focus on the purchase of Israeli defense technology. A 2020 report by the Stockholm International Peace Research Institute (SIPRI) found that Baku was the second-largest customer of Israeli weapons systems after India (Aharonheim, 2022). An agreement between the two states was officially ratified in 2012, according to which Israel committed to supply Azerbaijan with various weapons and train the Azerbaijani armed forces. The 1.6 billion dollar arms agreement was the biggest in Azerbaijan’s history (Ismayilov, 2013, p. 72). According to SIPRI, between 2011 and 2020, Israel was Azerbaijan’s second-largest arms supplier and was responsible for 26.6% of its defense technology imports. This included loitering munitions, unmanned aerial vehicles (UAVs) for reconnaissance, guided missiles, and ballistic missiles (SIPRI, 2021).

Azerbaijan and Israel also cooperate in the field of cyber defense and security. This could be observed in the 2020 Nagorno-Karabakh war. During the clashes, Azerbaijan made extensive use of Israeli drones (loitering munitions). Azerbaijan also demonstrated its ability to shorten the intelligence-fire cycle and improve its offensive use of UAVs (Dixon, 2020).

In conclusion, this section has shown that there have been four main changes in the relations between the two states since 2011: first, there has been a move from covert to overt cooperation; second, their cooperation has increased in volume; third, their cooperation has increased in scope; and finally, their cooperation is government and people-oriented.

The analysis has demonstrated Azerbaijan’s inclination toward adopting a KBE neoliberal foreign policy strategy in a multiplex world while retaining a realist foreign policy. The coexistence of this dual foreign policy plays a crucial role in understanding its impact on the strengthening of ties with Israel.

The research suggests that this dual foreign policy is instrumental in fostering stronger ties between the two states. If it were solely a strategy to enhance realist goals, firstly, we would not observe a shift from covert to overt cooperation, which could potentially damage Azerbaijan’s alliances with other states, such as Iran, Turkey, and even Saudi Arabia. Secondly, there would not be an increase in diverse forms of cooperation, such as education and technology, and a transition from government-centric to people-to-people interactions. Thirdly, we would not observe a direct link between the state’s internal and external policies. Finally, we would not observe post-hegemonic multilateral regional cooperation.

Conclusion

This research has illuminated the causes of the strengthening of ties between Azerbaijan and Israel based on the hypothesis that a dual foreign policy, combining a realist and neoliberal approach, was the main motivation, at least from 2011.

While most researchers explain the strengthening of ties with the realist claim alone, this research shows that Azerbaijan has been attempting to move to a KBE to achieve growth and prosperity since 2011. In order to succeed in this move, it adopted neoliberal, knowledge-based cooperation in its foreign policy alongside its realist cooperation, which was its dominant policy from 1992 to 2010.

While realism focuses on a bipolar and multipolar system led by balancing alliances for survival, the neoliberal theory focuses on multilateral cooperation led by socially constructed regional entities to achieve a mutual goal, such as growth and prosperity.

The hypothesis guiding this study posits that Azerbaijan’s adoption of a neoliberal foreign policy strategy played a pivotal role in strengthening relations with Israel in a multiplex world. In its pursuit of a KBE, Azerbaijan has actively sought collaborations with other KBE states that can contribute to this objective, leading to an intensified partnership and interdependence with Israel. This evolution in their relationship involved shifting from covert to overt cooperation, expanding the volume and scope of their collaboration, and transitioning from government-centric interactions to engagement with a broader spectrum of society.

Two significant findings emerge from this study. Firstly, the move toward a KBE encourages the adoption of a neoliberal foreign policy, integral to a KBE’s success. Secondly, there is a correlation between the adoption of the neoliberal foreign policy strategy and the strengthening of ties with other KBE states.

Additional research endeavors ought to concentrate on employing quantitative methodologies to assess the multi-case correlation between dual foreign policies and the fortification of interstate relations, as well as the impact of a KBE on a state’s foreign policy to ascertain its legitimacy. Furthermore, this comprehensive examination of Azerbaijan’s shift to a KBE and its adoption of a neoliberal foreign policy strategy in a multiplex world, resulting in the strengthening of ties with other states, should be extended to analyze Azerbaijan’s interactions with other European and Western nations.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Appendix:

KBE measurement table

As presented in the methodology, the following is the KBE measurement table based on the method of Afzal and Lawrey (2012), which is used in the research to measure a KBE and the percentage increase between the periods.

Table

	Protection of intellectual property rights (1 out of 10)	Scientific R&D expenditure as % of GDP	Education expenditure as % of GDP	Share of ICT goods as % of total imports	Share of ICT goods as % of total exports
1995/1996	3.01 (1995)	0.24 (1996)	3.3 (1995)	N/K	N/K
2004	3.01	0.22	3.4	3.47	0.01
2011	4.93	0.21	2.4	3.46	0
2020	6.81	0.22	4.3	5.86	0.14
	Economic Freedom Index	World Bank	World Bank	Unctadstat	Unctadstat
% increase from 1992 to 2011	64%	−12%	−27%	−0.3%	−100%
% increase from 2011 to 2020	38%	5%	79%	69%	Increase cannot be measured due to 0
% increase from 1992 to 2020	126%	−8%	30%	69%	1300%