Two Logics of Strategic Hedging: Comparing Azerbaijan and Uzbekistan
How domestic political economy, elite structure and geopolitics shape foreign policy strategy in Baku and Tashkent
Central Asian states and Azerbaijan in the South Caucasus are often presented as successful practitioners of strategic hedging, or what is locally termed in Central Asia a multi-vector foreign policy. Indeed, they share notable similarities in diversifying their economic and political relations across various regional and global powers. In addition to them, since 2019, and increasingly in recent years, Georgia has adopted a comparable approach to foreign policy diversification under the Georgian Dream government. Armenia, too, has declared a commitment to a diversified foreign policy, more prominently since 2022. Yet, beneath these surface similarities lie crucial divergences in how such multi-vector strategies are pursued.
The reason for this divergence lies in the unique contexts these states navigate. While at the structural level, the adoption of multi-vector foreign policies is shaped by the presence and engagement of multiple interested regional and global powers, at the domestic level, it is the strategic choices of local elites—shaped by internal political economies and historical legacies—that ultimately determine the course of foreign policy. A comprehensive exploration of the nuanced differences across all countries in these two sub-regions exceeds the scope of this piece. However, a focused comparison between Azerbaijan and Uzbekistan offers a useful illustration.
Azerbaijan exemplifies a foreign policy often described domestically as "independent" rather than explicitly "multi-vector." While it balances its economic and political relationships with both regional and major global powers, the core objective remains the preservation of national sovereignty and strategic autonomy. In pursuit of this goal, Azerbaijan adopts a selective and conservative approach to foreign involvement in strategic assets such as critical infrastructure and key economic sectors. Foreign direct investment is welcomed but closely regulated in terms of sectoral access and partnership conditions.
Since its military victory in the Second Karabakh War, Azerbaijan has grown more assertive in its regional diplomacy. This assertiveness is underpinned by a strong sense of self-reliance, often framed by the ruling elite as deriving from the state’s ability to maintain control over its interdependencies. As a result, Baku’s foreign policy is not always conciliatory. While Azerbaijan generally avoids direct confrontation, it engages in assertive balancing—managing tensions and recalibrating ties with Russia, Iran, the EU, and the United States as strategic interests dictate. The recurring cycles of tension and re-engagement with these actors over the past five years reflect a confident and calibrated posture in external relations.
Uzbekistan, by contrast, has pursued a different model of multi-vector foreign policy, especially following the leadership transition in 2016. Under President Mirziyoyev, the country has embarked on a process of economic and diplomatic opening, seeking diversified engagement with a wide range of partners—including Russia, China, the United States, the European Union, Iran, and its Central Asian neighbours. Since the war in Ukraine, Uzbekistan has further expanded its outreach to actors like the Gulf states, the EU, China, and the U.S., while maintaining traditional ties with Russia.
Although Uzbekistan is more open to foreign investment than Azerbaijan, this openness is not indiscriminate. The government demonstrates a calculated willingness to attract foreign capital in sectors vital to its modernisation agenda. Strategic sectors such as energy, transport, and industry have all welcomed foreign participation, not out of complacency, but due to pressing developmental needs and a desire to accelerate reform. This contrasts with Azerbaijan’s more cautious approach to liberalising such sectors.
The divergence between the two strategies is rooted in differences in economic structure and development priorities. While Uzbekistan has a higher overall GDP, its population is more than three times larger than Azerbaijan’s, resulting in a GDP per capita that is roughly one-third of Azerbaijan’s. Azerbaijan’s per capita wealth—largely derived from hydrocarbon exports—has enabled it to accumulate reserves, invest in infrastructure, and maintain tight control over strategic sectors. In contrast, Uzbekistan’s more diversified resource base and urgent development needs, including gaps in basic services and persistent poverty, necessitate a more open posture toward external capital.
These strategic preferences are reinforced by domestic political structures. Azerbaijan is governed through a highly centralised elite network, where decision-making is concentrated at the top and policy continuity is strong. Over more than a decade, this structure has allowed the leadership to pursue a conservative and security-oriented foreign policy. In this system, foreign control or deep involvement in strategic sectors is viewed with suspicion, as it is seen to jeopardise national sovereignty and autonomy.
Uzbekistan’s political elite, by contrast, remains in a transitional phase. While power remains concentrated under President Mirziyoyev, the system still includes a broader set of rent-seeking actors whose influence depends on access to state-controlled resources and foreign partnerships. This internal configuration contributes to a more permissive approach toward foreign involvement. However, the state has become increasingly strategic in how it manages foreign partnerships, reflecting a growing sophistication in its engagement model.
Geopolitically, Azerbaijan’s exposure to volatile neighbours—Russia and Iran—as well as the lingering post-Karabakh conflict, further incentivises a cautious and sovereignty-focused foreign policy. Azerbaijan’s deepening military ties with Türkiye, Israel, and Pakistan underscore a national security doctrine built on reducing vulnerability through hard power and self-reliance. By contrast, Uzbekistan is surrounded by relatively weaker or cooperative neighbours and faces no direct territorial threats. This insulation allows for a more risk-tolerant strategy, where liberalising access to strategic sectors is seen as a tool for development rather than a liability.
These underlying differences give rise to distinct strategic visions. Azerbaijan seeks to enhance autonomy by consolidating its sources of national power—military, financial, and infrastructural—ensuring sovereignty in a contested geopolitical environment. Where strategic, Azerbaijan itself invests abroad, reinforcing its vision of self-reliance and controlled exposure. Uzbekistan, in contrast, follows a strategy of multiplying interdependencies: building overlapping ties across regions and sectors to hedge against overdependence on any single actor. This form of strategic hedging maximises manoeuvrability, with foreign engagement serving as a lever for domestic transformation rather than a risk to national autonomy.