This is an interview with President's Aliyev during his visit of the US.

The President of Azerbaijan, Ilham Aliyev, had a lot to discuss with President Bush. Not only does the small Muslim nation occupy a strategic location between Russia and Iran at a time when tension between the United States and Iran is high, but it is also on the verge of a huge oil boom.
This summer, a 1,000-mile pipeline originating in Azerbaijan will begin pumping oil across three countries to a Turkish port on the Mediterranean Sea. Aliyev spoke with us about these developments and about how he hopes Washington will help resolve the country's decade-long conflict with Armenia.

Question: How will the completion of the Baku-Tbilisi-Ceyhan pipeline affect world oil and gas markets?

Answer: This pipeline means we will be able to produce more oil and deliver it to world markets. When we started building it five or six years ago, oil prices were not as high as they are today. Now, it becomes more and more important for the world's energy security.
It is a new route that will deliver oil from the Caspian to the Mediterranean, which has never existed before.

Question: Is it possible to quantify the effect on the markets?

Answer: The pipeline will transport at least 1 mm barrels of oil a day in 2008. In the future, the pipeline's capacity can be expanded; it will depend on the level of production. It has huge potential.

Question: How do you avoid what some people call the "oil curse"?

Answer: We are very determined to use oil wealth to develop a strong economy, and not to depend on oil and oil prices in the future. To achieve that, we need to have a high degree of transparency in accumulating and spending oil wealth.
Azerbaijan is a leading country in the Extractive Industries Transparency Initiative, which has a main goal of having transparent accounting.

Question: How does Azerbaijan see itself developing as a secular democracy? As a secular state with a predominantly Shiite population, can it be a model for Iran?

Answer: What we do and what we plan is not aimed at being used as an example. It is just for the sake of the people of Azerbaijan, for the development of our country.
We are secular not only by constitution but by our lifestyle. It is a very good example of how representatives of various nations and allegiances can live together in peace and autonomy. We have a predominantly Muslim population, but at the same time we have substantial Christian and Jewish communities.

Question: What other democratic reforms are coming up?

Answer: Azerbaijan over the last five years has adjusted most of its legislation to the standards of European countries. All of the basic political freedoms are available; political institutions are becoming stronger.
At the same time, they should be accompanied by strong economic reform. When people are poor, they think not about democratic development but about day-to-day needs. Last year we had a GDP growth of 26 %, the highest in the world.

Question: Was the GDP growth mostly in the oil sector?

Answer: It was 12 % in the non-oil sector, 14 % in the oil sector. We are trying now to diversify the economy.
Oil will come to an end sooner or later, so the country's long-term development should not depend on oil.

Question: You have said that the United States' standoff with Iran should be resolved diplomatically. But if the United States decides to react militarily to Iran, what will Azerbaijan's reaction be?

Answer: We still hope that it will be resolved in a diplomatic way. The other option may lead to catastrophe in the region and may damage all the positive trends and prospects for cooperation and development.
Azerbaijan, for more than a decade, has had part of its territory under Armenian occupation. And all of the advice in the West is to resolve it peacefully, despite the fact that 10 years of negotiations led to no results. Therefore, we also think that in this case a peaceful solution, patience, diplomatic efforts should be tried until the very possible end.

Question: Do you have high hopes for the resolution of the Nagorno Karabakh conflict?

Answer: On the one hand, we've been in a cease-fire regime for 12 years. Despite various periods of negotiation, no result. That does not add optimism. But on the other hand, the latest activity of mediators, including the US and Russia, creates hopes.
But to resolve it, both sides need to stick to international law and principles: Occupied territories of Azerbaijan should be returned without any preconditions. And the millions of Azerbaijanis who suffered from the policy of ethnic cleansing by the Armenian government have the right to return to their homeland.

Question: How will Azerbaijan's role in the war on terrorism change because of the US loss of the K2 air base in Uzbekistan last year?

Answer: We joined the anti-terror operation as soon as the United States invited allies to join. We are still committed to the partnership. We have our soldiers serving alongside US soldiers in Kosovo, Iraq, and Afghanistan. This policy has not changed at all.
The role of Azerbaijan as the United States' ally in the region is significant, and the significance of this role may change due to circumstances that develop, but our policy is not changed based on it.