Politics and Oil in Azerbaijan

The Magic of Numbers

Billions of dollars from the oil industry is consolidating the power of authoritarian president Ilham Aliyev in Azerbaijan and endangering the cease-fire with Armenia. Tobias Asmuth reports

A protest rally during Azerbajan's most recent elections (photo: AP)
In Azerbaijan oil revenues are controlled solely by Ilham Aliyev's regime, and the regime serves only its own clientele

​​The pride of new Azerbaijan is almost 1,770 kilometers long and was opened in May 2005 – after twelve years of construction: the pipeline that runs from Baku through Georgia to the Turkish Mediterranean port Ceyhan.

The first 10,000 barrels of fuel destined for the economies of Europe and the United States rushed to the tanker "British Hawthorn" on June 4 of this year. A BP-led consortium invested 4 billion dollars in the pipeline in order to ship 50 million tons of oil.

Oil from Baku is supposed to make the West less dependent on the oil-producing countries of OPEC. Neither Azerbaijan nor Kazakhstan are OPEC members. But on the other end of the pipeline money from the West is consolidating President Ilham Aliyev's hold on power.

Experts conjecture that approximately 100 billion barrels of oil lie under the bottom of the Caspian Sea. If a barrel of oil were 45 dollars a barrel (the price is currently fluctuating around 70 dollars), Azerbaijan would earn roughly 160 billion dollars by 2030.

Oil revenues strengthen the President

It is an enormous sum of money for a country in which 40 percent of the nearly eight million inhabitants live on less than 40 dollars a month. 100 billion barrels and 160 billion dollars – these numbers are President Ilham Aliyev's most important political tool. He uses them to beguile friends and threaten his opponents.

The history of modern Azerbaijan is one of the hostage-taking of the country by the Alijew family. Former KGB officer Heydar Aliyev became the First Secretary of the Communist Party of Azerbaijan in 1969, and in 1982 he even rose to become the first Azerbaijani to be a member of the CPSU politburo in Moscow.

When the country declared its independence from Moscow in 1991, a struggle for power raged in Baku, and Alijew lost control of power for a short while. But the people, disappointed by the defeat against Armenia in the war for Nagorny Karabach, helped him stage a comeback in the 1993 elections.

The loyal security apparatus and oil revenues

He generously filled the most important posts in his administration with intimates and built up a strong police force. In May 1994 the new, old strong man of the country entered into a cease-fire with victorious Armenia, and in September of the same year an agreement with a British consortium for exploiting the oil fields in Azerbaijan and constructing the pipeline. The loyal security apparatus and money from the oil are still what props up Aliyev's regime today.

When Heydar Aliyev died in 2003, his son Ilham Aliyev took over the presidential office. Since then he has been fiddling with the myth of a family dynasty. Standing next to advertisements for cameras and televisions all over the country are billboards portraying father and son Alijew seriously discussing the future of Azerbaijan.

Personality cult á la Soviet Union

The message: The founder of the new Azerbaijan passed on the responsibility of his office to his loyal son. The personality cult of the Aliyevs is Soviet propaganda – only the red star is absent.

Even in other ways government authorities resort to old Soviet-style methods: the opposition is wiretapped, intimidated, and arrested. Amnesty International has complained about the curtailing of the judicial system.

In political trials opponents are sentenced to many years of prison based on phantom charges such as treason or espionage.

"Democracy is not an apple that you can buy," President Alijew is fond of stating in public. A democracy must grow, it is a question of generations, a matter of education.

He can count on Europe not asking too many unpleasant questions about his methods of education. Roughly 100 billion barrels is an enticing number. And starting in September gas is supposed to be delivered from the Caspian Sea as well.

The European Union is already planning the construction of a connecting pipeline named Nabucco, which would run through Bulgaria, Rumania, and Hungary to Vienna to reduce Europe's dependence on Russian gas. Ilham Alijew can count on new agreements and even more dollars.

Oil revenues do not benefit the population

Will Azerbaijan soon be a prosperous country? Its prospects do not look good, because oil revenues are controlled solely by Ilham Aliyev's regime, and serve its own clientele.

An indicator of the transparency with which the oil revenues are administered and benefit the country is corruption. According to Transparency International, Azerbaijan in 2004 was number 140 worldwide on the corruption index – out of 145. Just barely ahead of Haiti, Bangladesh, Chad, Myanmar, and Nigeria. Dollars are flowing into many pockets, but hardly any into new factories, schools, or universities.

The army can be pleased, because the government increased the military budget by 30 percent last year. The oil boom has refueled the conflict over Nagorny Karabach. Foreign Minister Elmar Mammadyarov has been openly menacing in his speeches: "In view of our current economic development it would be better for Nagorny Karabach if we were friends." His country is keeping all options open – including a military solution.

For years the so-called OSCE Minsk group under the co-chairmanship of France and Russia and with the participation of the United States has been trying to come up with solutions for the conflict – but so far without much success.

No solution for the conflict over Nagorny Karabach

Armenia wants the mountain province to have its independence. Azerbaijan insists on the territorial integrity of its country. Around 700,000 refugees from Nagorny Karabach still live in tent camps or detached freight cars. There is no doubt that they wish to return to the mountains someday.

Azerbaijan wants to flex its power. The government in Baku is watching the negotiations over the status of Kosovo with growing concern. If the Albanian province actually gains its independence, it could – so they fear – become a model for Nagorny Karabach.

Azerbaijan could then seek a way out by escalating the conflict. The risk thus lies in the particular form of the current cease-fire, which is not being monitored by an international peacekeeping force. Shootings occur repeatedly and the dead are mounting on both sides, but the West hardly notices.

On building walls and billboards all over Baku the fallen heroes are commemorated. Next to the pictures of the dead is always the sentence: "A country is only a country when its people are prepared to die for it."

Tobias Asmuth

© Qantara 2006

Translated from the German by Nancy Joyce

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