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The Irish Times
October 12, 2007 Friday
God's gift to a strict post-Soviet regime
AZERBAIJAN: Oil and gas have given Azerbaijan the fastest-growing GDP
in the world, writes Arthur Beesley in Baku
President Ilham Aliyev has lofty plans for Azerbaijan, a post-Soviet
state on the cusp of great wealth thanks to its abundant reserves of
oil and gas.
Squeezed between Russia and Iran on the eastern shores of the Caspian
sea, Aliyev's secular Muslim country of 7.9 million people is in the
midst of a vigorous boom that has hugely increased its strategic
importance. Aliyev commands a deeply authoritarian regime that
suppresses dissent at home but has many friends in the West because
its provision of energy helps reduce Russia's leverage in
international markets.
The opening in 2005 of a 1,768km (1,100-mile) oil pipeline linking
the Azeri capital, Baku, with Ceyhan on Turkey's Mediterranean coast
- via Tblisi in Georgia - provided the first opportunity for Caspian
producers to bypass Russia when exporting to Europe and further
afield.
With multinational groups such as BP arriving en masse in Baku to
trade with the state oil company, Aliyev's low profile on the global
stage is at odds with his increasingly powerful position in the
international energy market.
Describing oil as a gift from God, he said Azerbaijan has the
potential to produce nine billion barrels of the stuff - current
production is almost 800,000 barrels per day - and enough gas to
maintain supplies for 150 years at current extraction rates.
That's a glittering prize in energy terms, although rampant
corruption in Azerbaijan and an ambivalent attitude to democracy are
a big cause of concern to the international community.
A further concern is Aliyev's belligerent rhetoric about Armenia's
occupation of Azerbaijan's territories in Nagorno Karabakh, over
which the countries went to war between 1989 and 1994. With peace
talks inconclusive since then, Aliyev has relentlessly ramped up his
annual military budget to the tune of $1 billion (EUR 702 million).
"Next year it will be much higher . . . We must be ready for any
outcome," he said in a group interview for European journalists.
Aliyev inherited power in a disputed 2003 election from his late
father, Heydar, a Soviet grandee and former chief of the local KGB
who dominated Azeri politics for more than 30 years. It was the first
such transfer of power in the former Soviet empire.
Even today, his father's image hangs prominently on posters
throughout the dusty streets of Baku in the mode of dear leaders
elsewhere. On those same streets, the presence of sleek Mercedes
beside fruit-laden Ladas is evidence of a chasm between the wealth of
the country's elite and those left behind by the boom.
Aliyev will stand for a second and final term in a presidential
election next year, a contest he is widely expected to win. On the
sixth floor of the enormous presidential palace overlooking Baku, his
remarks do not augur well for the democratic cause. "Frankly
speaking, I don't believe that international observers will say that
these elections were in full accordance with international
standards," he said.
While observers of the 2003 poll for the Organisation for Security
and Co-operation in Europe (OSCE) witnessed ballot-box stuffing and
tampering with result protocols, Aliyev claims such statements were
"politically motivated" and far from reality.
Igbal Agazadeh disagrees. An opposition MP who was severely beaten
during the 17 months he spent in prison after disputing the outcome
of the 2003 poll, he plans to contest next year's election. Agazadeh
speaks in confident terms about his prospects, but readily highlights
a litany of shortcomings in political and budgetary accountability in
the Aliyev regime. "It's an imitation form of democracy," he said.
For all that, Aliyev insists he is moving his country decisively
towards greater transparency and openness and said he wants to go
much further.
Lauding the EU for providing the "best experience in the world" in
terms of economic development, political freedom, living standards
and security, he said Baku was keen to develop ever closer ties with
the union.
So does Aliyev want Azerbaijan to join the EU? "In principle yes
sure, but we must be realists," he said. "If the EU is ready, or when
it's ready, we will of course be happy to be part of this structure."
The reality is that Azerbaijan itself is far from ready for the EU.
Aliyev recites impressive figures about Azerbaijan's rapid economic
advance - a 35 per cent rise in gross domestic product last year, the
fastest in the world - but it remains unclear as to whether his
government will successfully manage the growth.
Public spending next year will rise to the equivalent of $12 billion,
up from $1.4 billion as recently as 2003. While such an expansion
would challenge even the most advanced administration, Aliyev said
the construction of new schools, roads, hospitals and power stations
was all for the benefit of the Azeri people.
Aliyev's government maintains it is fighting a noble fight against
corruption, but his critics charge that such a rapid uplift in
expenditure provides ample scope for the illicit siphoning off of
public money for private gain.
"The spending area is totally corrupt. Money is stolen - not in the
oil well - in government spending. It is becoming uncontrollable,"
said political analyst Ilgar Mammador, a member of the Azerbaijan
Euro-Integration National Committee.
The committee cannot provide concrete examples of corruption,
although its concerns are shared by the EU and other international
organisations. In Baku, the boom continues. The city has more cranes
over its skyline than Dublin ever had in the heyday of the Celtic
Tiger.
October 12, 2007 Friday
God's gift to a strict post-Soviet regime
AZERBAIJAN: Oil and gas have given Azerbaijan the fastest-growing GDP
in the world, writes Arthur Beesley in Baku
President Ilham Aliyev has lofty plans for Azerbaijan, a post-Soviet
state on the cusp of great wealth thanks to its abundant reserves of
oil and gas.
Squeezed between Russia and Iran on the eastern shores of the Caspian
sea, Aliyev's secular Muslim country of 7.9 million people is in the
midst of a vigorous boom that has hugely increased its strategic
importance. Aliyev commands a deeply authoritarian regime that
suppresses dissent at home but has many friends in the West because
its provision of energy helps reduce Russia's leverage in
international markets.
The opening in 2005 of a 1,768km (1,100-mile) oil pipeline linking
the Azeri capital, Baku, with Ceyhan on Turkey's Mediterranean coast
- via Tblisi in Georgia - provided the first opportunity for Caspian
producers to bypass Russia when exporting to Europe and further
afield.
With multinational groups such as BP arriving en masse in Baku to
trade with the state oil company, Aliyev's low profile on the global
stage is at odds with his increasingly powerful position in the
international energy market.
Describing oil as a gift from God, he said Azerbaijan has the
potential to produce nine billion barrels of the stuff - current
production is almost 800,000 barrels per day - and enough gas to
maintain supplies for 150 years at current extraction rates.
That's a glittering prize in energy terms, although rampant
corruption in Azerbaijan and an ambivalent attitude to democracy are
a big cause of concern to the international community.
A further concern is Aliyev's belligerent rhetoric about Armenia's
occupation of Azerbaijan's territories in Nagorno Karabakh, over
which the countries went to war between 1989 and 1994. With peace
talks inconclusive since then, Aliyev has relentlessly ramped up his
annual military budget to the tune of $1 billion (EUR 702 million).
"Next year it will be much higher . . . We must be ready for any
outcome," he said in a group interview for European journalists.
Aliyev inherited power in a disputed 2003 election from his late
father, Heydar, a Soviet grandee and former chief of the local KGB
who dominated Azeri politics for more than 30 years. It was the first
such transfer of power in the former Soviet empire.
Even today, his father's image hangs prominently on posters
throughout the dusty streets of Baku in the mode of dear leaders
elsewhere. On those same streets, the presence of sleek Mercedes
beside fruit-laden Ladas is evidence of a chasm between the wealth of
the country's elite and those left behind by the boom.
Aliyev will stand for a second and final term in a presidential
election next year, a contest he is widely expected to win. On the
sixth floor of the enormous presidential palace overlooking Baku, his
remarks do not augur well for the democratic cause. "Frankly
speaking, I don't believe that international observers will say that
these elections were in full accordance with international
standards," he said.
While observers of the 2003 poll for the Organisation for Security
and Co-operation in Europe (OSCE) witnessed ballot-box stuffing and
tampering with result protocols, Aliyev claims such statements were
"politically motivated" and far from reality.
Igbal Agazadeh disagrees. An opposition MP who was severely beaten
during the 17 months he spent in prison after disputing the outcome
of the 2003 poll, he plans to contest next year's election. Agazadeh
speaks in confident terms about his prospects, but readily highlights
a litany of shortcomings in political and budgetary accountability in
the Aliyev regime. "It's an imitation form of democracy," he said.
For all that, Aliyev insists he is moving his country decisively
towards greater transparency and openness and said he wants to go
much further.
Lauding the EU for providing the "best experience in the world" in
terms of economic development, political freedom, living standards
and security, he said Baku was keen to develop ever closer ties with
the union.
So does Aliyev want Azerbaijan to join the EU? "In principle yes
sure, but we must be realists," he said. "If the EU is ready, or when
it's ready, we will of course be happy to be part of this structure."
The reality is that Azerbaijan itself is far from ready for the EU.
Aliyev recites impressive figures about Azerbaijan's rapid economic
advance - a 35 per cent rise in gross domestic product last year, the
fastest in the world - but it remains unclear as to whether his
government will successfully manage the growth.
Public spending next year will rise to the equivalent of $12 billion,
up from $1.4 billion as recently as 2003. While such an expansion
would challenge even the most advanced administration, Aliyev said
the construction of new schools, roads, hospitals and power stations
was all for the benefit of the Azeri people.
Aliyev's government maintains it is fighting a noble fight against
corruption, but his critics charge that such a rapid uplift in
expenditure provides ample scope for the illicit siphoning off of
public money for private gain.
"The spending area is totally corrupt. Money is stolen - not in the
oil well - in government spending. It is becoming uncontrollable,"
said political analyst Ilgar Mammador, a member of the Azerbaijan
Euro-Integration National Committee.
The committee cannot provide concrete examples of corruption,
although its concerns are shared by the EU and other international
organisations. In Baku, the boom continues. The city has more cranes
over its skyline than Dublin ever had in the heyday of the Celtic
Tiger.