An Unlikely Partnership in Trouble: Serbia and Azerbaijan

Last month, the chargé d'affaires of the Serbian embassy in Azerbaijan was summoned to the Azerbaijani Foreign Ministry for talks with Deputy Foreign Minister Khalaf Khalafov. The Azerbaijani side filed its complaint over the fact that Serbian mortars and ammunition of various calibres were being used by the Armenian military. The ammunition was uncovered during the three days of fighting between Azerbaijani and Armenian forces that started on 12 July and which claimed the lives of 16 people. This episode might spell trouble for the peculiar partnership that has existed between Serbia and Azerbaijan for the past 12 years.

Partners in Adversity

How can one explain the partnership between two countries that appear so different? There are two reasons. Both countries are engaged in unresolved territorial disputes – Serbia with Kosovo and Azerbaijan in a conflict with Armenia over Nagorno-Karabakh. The second explanation relates to Belgrade’s desire to find alternative economic partnerships, a tendency which was particularly pronounced in the first year after the global financial crisis of 2008.

As Kosovo declared its independence in February 2008, counter-secession became the essential element of Serbian foreign policy. Under that policy, Serbia reached out to countries troubled by their territorial disputes both to avoid any precedent impacting its Kosovo policy and to secure diplomatic support in international forums from these countries. Azerbaijan found itself among these countries, leading to a weird diplomatic constellation.

There is a potential synergy between Serbia and Armenia, as both countries are Orthodox Christian nations with an ageing population and under potential pressure from their demographically more dynamic and younger Muslim neighbours. However, the principle of the sanctity of state territory brought Belgrade and Baku together. The two sides are voting in favour of each other at the UN on Kosovo and Nagorno-Karabakh.

Azerbaijan had a good reason to have open contact with Serbia as there has always been a strange overlap between territorial and ethnic conflicts in the Balkans and the Caucasus, particularly when it comes to Russia’s involvement. Thus, in 1995, when the Dayton Peace Accords were signed bringing to a halt the violence in Bosnia and Herzegovina, Russia played a minor role in the process, since it was bogged down in the disastrous First Chechen War between 1994 and 1996. The wars in the former Yugoslavia, however, also helped Russia in other instances. In 1999, NATO’s military intervention in Kosovo played a part in the decision of then Russian President Boris Yeltsin and his successor Vladimir Putin to escalate military operations during the Second Chechen War between 1999 and 2009. Kosovo’s unilateral declaration of independence from Serbia occurred shortly before the Russo-Georgian war in August 2008 in which Russia imposed independence on Abkhazia and South Ossetia by invoking the Kosovo precedent. In short, Serbia and Azerbaijan indirectly either restricted or eased Moscow’s actions, and both are aware of this dynamic.

Flourishing Links

Either way, diplomatic relations between Belgrade and Baku quickly developed. Azerbaijan opened its embassy in Belgrade in 2010, while Serbia opened its embassy in Baku in 2011. Azerbaijan also established the Azerbaijan Culture Centre in Belgrade in 2010. Between 2010 and 2018, there have been five presidential inter-state visits, one by the Serbian prime minister, ten mutual visits by foreign ministers, and numerous other meetings by other government officials and members of the parliament. In May 2018, Azerbaijani President Ilham Aliyev hosted his Serbian counterpart Aleksandar Vučić in Baku where the two signed the Joint Agreement on Strategic Partnership and several trade agreements, including one on a direct flight between Belgrade and Baku.

Economics also played its part. Serbia was hit hard by the financial crisis of 2008 and languished on the European periphery because of the slow pace of its EU accession, so it needed credit lines. Azerbaijan jumped in. In 2016, the Ljig-Preljina section of the motorway Corridor XI intended to connect Italy, Montenegro, Serbia and Romania was completed by an Azerbaijani contractor, AzVirt. The project was financed through a €300-million loan based on the credit agreement that the two governments signed in 2012. In November 2019, a contract was signed between the Serbian government and AzVirt for the construction of the Ruma-Šabac highway and the Šabac-Loznica expressway.

In 2011, Baku financed the restoration of Belgrade’s Bajrakli mosque, the Saint Petka church in Novi Sad, as well as the restoration of Belgrade’s Tašmajdan Park. In Novi Pazar, a Muslim-populated city in southwestern Serbia, Azerbaijan financed the reconstruction of the city’s cultural centre.

On the humanitarian front, the partnership with Baku also paid dividends for Belgrade. During the devastating flood that hit Serbia in 2014, Azerbaijan donated more than €400,000 worth of aid. For combating coronavirus, Azerbaijan gave medical equipment to Serbia in May 2020 with AzVirt assisting needy families in Belgrade. Serbian Prime Minister Ana Brnabić greeted the plane carrying aid, and she thanked both the Azerbaijani president and the ambassador for the assistance.

Azerbaijan also scored points in its partnership with Serbia, by gaining political influence in an EU membership candidate country while under EU criticism for human rights violations. It was also useful for Azerbaijan to keep Serbia close in 2015 when Serbia chaired the Organization for Security and Co-operation in Europe, under whose auspices the Minsk Group, the conflict resolution mechanism for Nagorno-Karabakh, operates.

Azerbaijan also had the opportunity to do some public diplomacy and promote itself and its leadership in Serbia. Tašmajdan Park in Belgrade, renovated by Azerbaijan, includes a monument to the late Azerbaijani president Heydar Aliyev and the father of current president Ilham Aliyev. In 2011, an ‘Azerbaijani room’ was opened in the building of the Serbian foreign ministry. The room was renovated from the Azerbaijani donation, decorated with Azerbaijani motives and to this very day, it is one of the rooms used for high-level inter-state visits.

And Then, the Snag

This partnership has been shaken by the fact that Serbian mortars and ammunition were found with Armenian forces. The conflict with Armenia is the dominant theme of Azerbaijani foreign policy and non-negotiable element in Azerbaijan’s partnerships. What makes this situation so troublesome for Belgrade? It is happening at the moment when the frozen conflict between Armenia and Azerbaijan has not only turned into a hot war, but has widened, as the latest round of fighting did not happen in Nagorno-Karabakh, but in the strategically located Tovuz district of Azerbaijan. Serbia has also found itself involved in a local diplomatic problem in the Caucasus, as Azerbaijan is claiming that Serbian ordnance reached Armenia through neighbouring Georgia. Georgian Prime Minister Giorgi Gakharia is denying these allegations.

To make things even more complicated, the man allegedly behind the arms delivery to Armenia was identified by the Serbian press as Slobodan Tešić. Tešić is one of the biggest Serbian arms dealers, and a man close to the Serbian President Aleksandar Vučić and the ruling Serbian Progressive Party, explaining why the Serbian government has been shy about providing names. Back in 2009, US diplomatic cables subsequently made public claimed that Tešić was involved in illicit arms sales to Armenia. For 10 years, Tešić was under a UN travel ban for violating arms exports to Liberia. In December 2019, nine individuals and three entities affiliated with Tešić were placed under sanctions by the US Treasury Department.

Tešić and his companies were also at the centre of one of the biggest scandals involving the Serbian government last year. Namely, it was uncovered that several companies owned by Tešić were buying ammunition at a discounted price from the Serbian munitions manufacturer Krušik. In these transactions, the father of the Serbian Minister of Interior, Nebojša Stefanović, also participated. The mortar shells were sold to buyers in Saudi Arabia and ended up in the hands of Islamist militants in Yemen.

In December 2019, a member of parliament from the Serbian opposition claimed that Tešić made donations to the Serbian community in Kosovo, while the government provided Tešić with the licence for arms exports to Armenia in return. Indeed, the Tešić-owned company Vektura Trans has been supplying ammunition manufactured by Krušik to Armenia. This is a result of the agreement Tešić reached with Armenia in 2018, the same year Vučić visited Azerbaijan. The proximity of Tešić to the ruling circles in Belgrade certainly has not escaped Baku’s attention, and it will have to be addressed. So far, the Serbian government has defended itself by claiming that it is a transaction by a private company unrelated to the state, although several state institutions have to approve arms exports. The government also claimed that Serbia sold ammunition to both Azerbaijan and Armenia, and that sales of ammunition to Armenia started during the time of former Serbian President Boris Tadić, who denied these allegations.

Implications

In case the partnership with Baku is damaged, Belgrade will suffer more as it would lose the economic and political capital created by that partnership over the past 12 years.

However, the biggest danger for Belgrade is the number of major geopolitical players that can be potentially upset. Serbia’s special partnership with Russia is becoming tenuous and the Kosovo dispute seems to be the only issue which unites them. While Moscow is the main backer of Armenia, it sells weapons to both Azerbaijan and Armenia to boost its influence in the conflict. Erdoğan’s Turkey, another partner of Vučić’s Serbia, is the main backer of Azerbaijan in the conflict with Armenia. Israel, with whom Serbia pursued closer ties by deciding to open a state office in Jerusalem, is supplying drones that Azerbaijan uses against the Armenians. The US also has its eye on Tešić.

Belgrade and Baku started to resolve the bilateral issue surrounding the ammunition scandal. Vučić called Aliyev expressing regret for the deaths of Azerbaijani citizens, while promising to send a high-level delegation to Azerbaijan to investigate the matter and inviting his colleague from Baku to visit Serbia. However, for Serbia, a small impoverished country burdened with Kosovo and the legacy of the 1990s, being caught in the middle of a Caucasus conflict is the last thing it needs. For the past 12 years, Serbia has avoided entanglement in global conflicts and disputes in order to avoid angering regional and global powers. However, the presence of Serbian weaponry in conflict zones brings Belgrade the risk of the diplomatic ire of bigger players or even US sanctions. Belgrade should step back before the Caucasus get too hot.

Vuk Vuksanovic is a PhD researcher in International Relations at LSE and an associate of LSE IDEAS, LSE’s foreign policy think tank.

The views expressed in this Commentary are the author's, and do not represent those of RUSI or any other institution.