State Department Urges Lifting of Azeri Aid Ban

WASHINGTON (Dow Jones)–The current ban on US assistance to Azerbaijan restricts Washington’s ability to influence events in the Caspian region and should be lifted–a top State Department official said Monday.

"There are still plenty of obstacles to further progress in our goal of ending the war over Nagorno-Karabakh," Deputy Secretary of State Strobe Talbott said in a speech to John Hopkins University. Talbott was referring to a region in Azerbaijan that Armenia believes should belong to Armenia. Fighting in Nagorno-Karabakh has displaced about 800,000 Azeri citizens over the past five years–according to the State Department.

"I am referring to Section 907 of the Freedom Support Act of 1992–which limits our ability to provide assistance to the government of Azerbaijan…It has had the negative impact of limiting our leverage with Baku and complicating our ability to be as effective as we could otherwise be as an honest broker (in the war)," Talbott said.

The US House and Senate foreign aid bills for fiscal year 1998–which passed their respective committees this year–renew Section 907–although the bills make exceptions for Export-Import Bank and Overseas Private Investment Corp. assistance. The full Senate voted on the foreign aid bill last week and the entire House of Representatives is expected to vote this week on the measure.

"It (Section 907) has also made it impossible for us to provide the Azerbaijanis with assistance on elections–economic reform and energy development," Talbott said. "Hence–our opposition to Section 907–and I suspect you’ll be hearing more on the subject when (Azerbaijan) President Ali Aliyev arrives here next week."

The Clinton administration has voiced its opposition before to Section 907–but Monday’s speech marked the first time public opposition came from the State Department’s No. 2 official. Talbott’s remarks appear to be a signal that the administration would like Congress to address the issue of the aid ban before the Azerbaijan president arrives next Wednesday on an official visit to Washington.

Talbott also noted the administration is devoting more assistance to countries in the Central Asian region. Since 1992–the US has obligated more than $2.2 billion in overall assistance to the region–he said. Furthermore–the administration has asked Congress to increase the fiscal ’98 foreign aid budget to the Newly Independent States in by 34% to $900 million.

Such assistance is encouraging these countries to establish ties with international financial and political institutions–he noted.

"We hope to welcome Armenia–Georgia–Krygyzstan and Kazakstan into the World Trade Organization on the commercial terms generally applied to new members before the end of 1998," Talbott said.

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