How Hungary’s big opening to Azerbaijan flops

The Hungarian government’s efforts to diversify its economic strategy led to its “opening to the east” campaign, aiming to create partnerships in Asia and the Caucasus, which are mostly authoritarian countries. It is already clear that attempts to get on the right side of the leadership in Azerbaijan’s capital Baku have not yielded any results, only some spare change for a handful of the usual oligarchs.

Hungary’s government decided a few years ago that it needed to find new trade partners, given the economic problems in Europe and the failure to jointly maintain competetiveness against the United States, Hungary wanted move beyond its traditional relationships within the European Union. The new goal was to boost relations with emerging markets where potential for growth was greater, but where the leadership tended to authoritarian, countries like Singapore, Turkey, China and Azerbaijan.

Atlatszo.hu’s sources say the reasons behind the opening to Azerbaijan are deeply rooted in history, the two nations have some ethnic links and it is a widely held belief that there are still descendant of Hungarian tribes living in the Caucasus region. However, the opening culminated in a scandalous and highly embarrassing diplomatic incident.

In 2012, the public was shocked when Ramil Safarov was extradited from Budapest. Safarov was serving a prison sentence for the murder of an Armenian soldier. Both were attending a NATO training exercise in Budapest, and Safarov took it upon himself to act on the long-running hostility between the two countries and used an axe as his weapon. The investigation found that he planned to kill another Armenian participant of the exercise but he was apprehended before that could happen.

As soon as he arrived in Baku, not only was Safarov held to serve out the rest of his sentence, he was exonerated of all charges reinstated in the army and generally received a hero’s welcome. It was widely believed that Hungary made the gesture and fell into this humiliating position hoping that Azerbaijan would be interested in buying Hungarian government bonds and also take a favorable approach to supplying Hungary natural gas through one of the pipelines that were planned from the Caucasus region to eastern Europe. Neither of these things happened.

In fact, Azerbaijan is ranked in a lowly 69th position in terms of Hungary’s trading partners, and despite claims that bilateral trade is taking off, the $75 million annual volume traded last year is well below the peak $85 million value registered in 2008. Records show there are only five Hungarian companies that are operating fully legally with an interest in Azerbaijan.

One of the few winners of the eastern opening has been oligarch Lajos Simicska, who managed to clinch several construction deals during bilateral talks between Prime Minister Viktor Orbán and President Ilham Alijev last year.  

Original article in Hungarian