-
General Antranik (1865-1927): “I am not a nationalist. I recognize only one nation, the nation of the oppressed.” -
Re: Azerbaijan - Internal Political Affairs
Friday, January 15, 2016
Azerbaijan
Arrests As Azerbaijani Police Use Water Cannons, Tear Gas Against Protesters
Security Forces Move Against Protesters in Azerbaijan
WATCH: Azerbaijan deployed security forces in the northeastern district of Quba on January 15, amid national unrest over worsening economic conditions. Camera-phone video shows security forces moving against the protesters. (RFE/RL's Azerbaijani Service/UGC video)
Related Articles
Scores Detained In Azerbaijan Amid Countrywide Protests
Scores of people, including opposition activists, were detained in Azerbaijan on January 13 amid countrywide protests over worsening economic conditions in the oil-rich Caucasus state.
Azerbaijan Closes Independent Currency Exchange Booths
Azerbaijani Opposition Activist Gets Seven Days In Prison
By RFE/RL's Azerbaijani Service
Last updated (GMT/UTC): 15.01.2016 15:31
QUBA, Azerbaijan -- Security forces have dispersed a protest in Azerbaijan's northeastern Quba district, using water cannon and tear gas and detaining several people amid a national outbreak this week of unrest over worsening economic conditions.
Some 1,000 people had gathered for the January 15 demonstration in the district capital to protest unemployment, and demanded that overdue social allowances be paid off and bank loans recalculated.
The local currency, the manat, has seen a drastic depreciation brought on by a drop in world oil prices.
Quba district chief Yashar Mammadov met with protesters at a location called the Old Bus Station and said he was ready for talks to address their problems.
But an RFE/RL correspondent on the scene said demonstrators dismissed Mammadov's promises and continued the protest, prompting the security forces to use water cannon and tear gas.
Security forces made several arrests before protesters dispersed, the correspondent reported.
The city is now under the authorities' full control. It was not immediately clear whether more protests were planned for January 16.
There was no immediate official reaction to the protest in Quba, the RFE/RL correspondent said.
Earlier in the day, demonstrators attempted to block access roads leading toward the capital, Baku. The RFE/RL correspondent said police subsequently established checkpoints on all major roads in the Quba district.
Quba was the scene of violent protests in 2012 that resulted in a number of convictions after windows were broken at government buildings and a home belonging to the local governor was set alight.
In the latest unrest, authorities on January 15 deployed a large number of security forces -- police officers and Interior Ministry special forces -- to Quba, saying they had information that a bomb had been placed in a mosque in the city center. But officials later said no explosive had been found at the site.
Security forces have also established checkpoints on highways leading to Quba and on other major roads in the province.
Scores of protesters and several opposition activists have been detained this week since protests broke out, sparked mainly by price hikes on staples such as flour and bread.
Moving rapidly to stifle protests and prevent further discontent, authorities have cut the price of flour and imposed controls over the price of bread.
The Economy Ministry said it was waiving value-added taxes on the import of wheat and the production and sale of flour and bread as of January 15. The ministry said the decision should reduce the wholesale price for flour, and listed the prices at which bread should now be sold.
"Anyone who sells flour and bread at higher prices will be held to account in the most serious way," the statement said.
Energy makes up the vast majority of Azerbaijan's exports, and plummeting global oil prices have drastically reduced state revenues. Last month, the situation led authorities to float the national currency, the manat, after using up a large part of its currency reserves to prop it up.
Since it was floated, the manat has depreciated by one-third against the U.S. dollar, prompting the Central Bank on January 14 to ban independent currency-exchange outlets from operating.
The government said the latest measures intended to regulate the price of bread were meant to protect citizens from the economic fallout of the oil and currency crisis.
"This decision has been made on the instructions of President Ilham Aliyev to strengthen the social protection the population, in particular poor families, from the change in the rate of the manat," the statement said.
The rising price of flour has been a lightning-rod issue during the protests that have taken place this week in several districts -- Fizuli, Aqsu, Aqcabardi, Siyazan, and Lankaran. Scores of people were arrested on January 13 after taking part in the protests, which authorities labeled "illegal" and which they accused the opposition Popular Front (AXCP) and Musavat parties of staging.
Three opposition activists were arrested during the protests. Two of them -- local AXCP and Musavat leaders Nazim Hasanli and Iman Aliyev, respectively -- were detained in Lankaran, while AXCP youth activist Turan Ibrahim was arrested in the capital, Baku.
Hasanli and Aliyev were each sentenced to one month in jail for taking part in an unsanctioned protest. Both pleaded innocent, saying they had nothing to do with the rallies. Ibrahim was found guilty of using vulgar words in public, resisting police, and disrupting public order, and was sentenced to seven days in prison on January 14.
Aliyev's government has faced increased criticism about rights abuses. Several journalists and rights activists have been jailed over the past year on charges such as hooliganism, tax evasion, and illegal business activities.
Rights groups say the charges are often trumped up and leveled in retaliation for opposition activities and criticism of senior government officials. Azerbaijani officials have denied the allegations.General Antranik (1865-1927): “I am not a nationalist. I recognize only one nation, the nation of the oppressed.”Comment
-
Re: Azerbaijan - Internal Political Affairs
Azerbaijan forced to cut bread taxes after widespread protests
Security forces arrest dozens during demonstrations against steep price hikes as falling oil prices devastate economy. RFE/RL reports
RFE/RL Azerbaijan's service, part of the New East network
Friday 15 January 2016 08.12 EST
Azerbaijan has been forced to cut taxes on essential foods after widespread protests over deteriorating economic conditions that have seen the prices of essentials such as flour and bread rise steeply in recent months.
Troops were called in to disperse demonstrations in several cities this week, with security forces using tear gas against stone-throwing protesters and arresting dozens of people including opposition activists.
The unrest follows a steep drop in the value of the national currency, the manat, against the US dollar, with residents hard-hit by rising inflation and unemployment. Falling oil revenues, which make up the vast majority of Azerbaijan’s exports, have also damaged the economy.
Earlier this month, a 63-year-old man set himself alight, reportedly after complaining to colleagues of bank loans he could not repay.
Authorities declared Tuesday and Wednesday’s protests illegal, saying security forces had been forced to arrest demonstrators “to protect citizens’ constitutional rights and ensure public safety”.
But the finance ministry responded by announcing a cut in the price of flour on Thursday, saying it was waiving value added tax on the import of wheat and the production and sale of flour and bread from today.
A statement listed the prices at which bread should now be sold, adding that “anyone who sells flour and bread at higher prices will be held to account in the most serious way”.
The government blamed the opposition Popular Front (AXCP) and Musavat parties for organising the demonstrations. In Lankaran, local AXCP chief Nazim Hasanli was detained together with the chairman of the local branch of the opposition Musavat party, Iman Aliyev.
Hasanli and Aliyev were each sentenced to one month in jail for taking part in an unsanctioned protest. Both pleaded innocent, saying they had nothing to do with the rallies.
AXCP youth activist Turan Ibrahim was arrested near his home in Baku on 13 January, according to his brother, Togrul Ibrahim, who said at least seven police officers took his brother away as he was returning from work.
Turan Ibrahim was charged with resisting arrest, his brother said. The boys’ father, Mammad Ibrahim, is an adviser to the AXCP chairman who has been in custody since late September on hooliganism charges. The elder Ibrahim rejects the charges as politically motivated.
President Ilham Aliyev’s government has faced increasing criticism about rights abuses, with several journalists and rights activists jailed over the past year on charges such as hooliganism, tax evasion, and illegal business activities.
Rights groups say the charges are often trumped up, and leveled in retaliation for opposition activities and criticism of senior government officials. Azerbaijani officials have denied the allegations.
Free fall
In the latest sign of economic trouble, Azerbaijan’s Central Bank banned independent currency-exchange outlets from operating on Thursday. Officials said only banks would be allowed to exchange foreign currency.
In December the Central Bank listed “the continuing devaluation of partner countries’ currencies” among the factors contributing to the ailing economy.
Analysis From political prisoners to media bans: Baku's European Games in numbers
Forget medal tallies and world records, some of the most pertinent facts about inaugural event in Azerbaijan involve activities taking place out of competition
Read more
The manat has tumbled by more than 42% against the dollar on the black market since the Central Bank withdrew support for the currency last month after exhausting more than half its foreign currency reserves in an attempt to prop up the manat against falling oil prices. The currency fell 33% on the official market.
The bank said it had been forced to loosen the currency regime to “preserve hard-currency reserves ... and ensure the national economy’s competitiveness on the international arena.”General Antranik (1865-1927): “I am not a nationalist. I recognize only one nation, the nation of the oppressed.”Comment
-
Re: Azerbaijan - Internal Political Affairs
One has to note the magic trick here. In another article it was reported that the Azeris would increase the transit costs of goods entering into Azerbaijan. Essentially, the blame is going to be shifted to those who transport the goods as opposed to the government directly taxing the products. Sure, drop the tax on bread and increase it on the tax for entry into the country. Smoke and mirrors.Originally posted by Joseph View PostAzerbaijan forced to cut bread taxes after widespread protests
Security forces arrest dozens during demonstrations against steep price hikes as falling oil prices devastate economy. RFE/RL reports
RFE/RL Azerbaijan's service, part of the New East network
Friday 15 January 2016 08.12 EST
Azerbaijan has been forced to cut taxes on essential foods after widespread protests over deteriorating economic conditions that have seen the prices of essentials such as flour and bread rise steeply in recent months.
Troops were called in to disperse demonstrations in several cities this week, with security forces using tear gas against stone-throwing protesters and arresting dozens of people including opposition activists.
The unrest follows a steep drop in the value of the national currency, the manat, against the US dollar, with residents hard-hit by rising inflation and unemployment. Falling oil revenues, which make up the vast majority of Azerbaijan’s exports, have also damaged the economy.
Earlier this month, a 63-year-old man set himself alight, reportedly after complaining to colleagues of bank loans he could not repay.
Authorities declared Tuesday and Wednesday’s protests illegal, saying security forces had been forced to arrest demonstrators “to protect citizens’ constitutional rights and ensure public safety”.
But the finance ministry responded by announcing a cut in the price of flour on Thursday, saying it was waiving value added tax on the import of wheat and the production and sale of flour and bread from today.
A statement listed the prices at which bread should now be sold, adding that “anyone who sells flour and bread at higher prices will be held to account in the most serious way”.
The government blamed the opposition Popular Front (AXCP) and Musavat parties for organising the demonstrations. In Lankaran, local AXCP chief Nazim Hasanli was detained together with the chairman of the local branch of the opposition Musavat party, Iman Aliyev.
Hasanli and Aliyev were each sentenced to one month in jail for taking part in an unsanctioned protest. Both pleaded innocent, saying they had nothing to do with the rallies.
AXCP youth activist Turan Ibrahim was arrested near his home in Baku on 13 January, according to his brother, Togrul Ibrahim, who said at least seven police officers took his brother away as he was returning from work.
Turan Ibrahim was charged with resisting arrest, his brother said. The boys’ father, Mammad Ibrahim, is an adviser to the AXCP chairman who has been in custody since late September on hooliganism charges. The elder Ibrahim rejects the charges as politically motivated.
President Ilham Aliyev’s government has faced increasing criticism about rights abuses, with several journalists and rights activists jailed over the past year on charges such as hooliganism, tax evasion, and illegal business activities.
Rights groups say the charges are often trumped up, and leveled in retaliation for opposition activities and criticism of senior government officials. Azerbaijani officials have denied the allegations.
Free fall
In the latest sign of economic trouble, Azerbaijan’s Central Bank banned independent currency-exchange outlets from operating on Thursday. Officials said only banks would be allowed to exchange foreign currency.
In December the Central Bank listed “the continuing devaluation of partner countries’ currencies” among the factors contributing to the ailing economy.
Analysis From political prisoners to media bans: Baku's European Games in numbers
Forget medal tallies and world records, some of the most pertinent facts about inaugural event in Azerbaijan involve activities taking place out of competition
Read more
The manat has tumbled by more than 42% against the dollar on the black market since the Central Bank withdrew support for the currency last month after exhausting more than half its foreign currency reserves in an attempt to prop up the manat against falling oil prices. The currency fell 33% on the official market.
The bank said it had been forced to loosen the currency regime to “preserve hard-currency reserves ... and ensure the national economy’s competitiveness on the international arena.”Comment
-
Re: Azerbaijan - Internal Political Affairs
Very good point. I wonder if SOCAR start trying to renegotiate oil and gas transit fees with Georgia and even Turkey.Originally posted by HyeSocialist View PostGeneral Antranik (1865-1927): “I am not a nationalist. I recognize only one nation, the nation of the oppressed.”Comment
-
Re: Azerbaijan - Internal Political Affairs
Azeri news outlets are circulating some kind of code word,"Russian needle", when it comes to gas in Georgia. I think the Ruskies are encroaching the Georgian gas networks and the Georgians think with low prices they can negotiate a cheaper deal with the Azeris. They're asking Russia to pay cash instead of in gas for the transit fees of gas into Armenia. Whatever is going on its definitely due to the crash in energy prices.Originally posted by Joseph View PostComment
-
Re: Azerbaijan - Internal Political Affairs
Azerbaijan Blames "Armenian Lobbyists" for Amal Clooney's Support of Jailed Journalist Khadija Ismayilova
January 20, 2016 - 12:11pm,
by Giorgi Lomsadze
Celebrity British human-rights lawyer Amal Clooney has sparked grumblings in Azerbaijan over her offer to defend the ex-Soviet republic’s most famous inmate, investigative journalist Khadija Ismayilova, before the European Court of Human Rights. Azerbaijani media which often do PR hit-jobs for the government claim that Clooney is Armenian and a Turkophobe.
“Clooney targets Turkic states in her path to fame,” screamed a headline in AzerNews, an outlet long busy with whitewashing the Azerbaijani government’s human-rights record. “We would like to note that Amal Clooney is an ethnic Armenian and she represented Armenian interests in the European Court for Human Rights,” echoed the hawkish Haqqin.az news service.
The fact that Clooney is actually of Lebanese extraction matters little for Azerbaijan’s pro-government media, known for its time-honored tradition of blaming various woes on the country’s next-door enemy, Armenia, with which Azerbaijan has a decades-long conflict over the breakaway Nagorno-Karabakh region.
The attacks on Clooney focused on a 2015 Armenian genocide-denial case she led and lost against a Turkish politician in the European Court of Human Rights. That case feeds the accusations that the 37-year-old attorney is on an anti-Turkic binge. Turkey and Azerbaijan share Turkic ties and, as close allies, both oppose Armenia on Karabakh.
“Anti-Turkic activities indeed helped Amal, a Lebanese by origin with close roots to large Armenian community in her motherland, to get distinguished in her lawyer career,” opined journalist Gunal Camal in her piece for AzerNews. The reporter maintained that the said “anti-Turkic” spree is Clooney’s “bid to catch up [with] with her husband [Hollywood star George Clooney]’s fame.”
Azerbaijani officials, bent on promoting their country’s own profile, long have had thin-skinned reactions to international shaming over the 2015 sentencing of journalist Ismayilova to seven and a half years in prison.* Rights groups describe the prison-term as retribution for her exposés of corruption among President Ilham Aliyev’s family and related political circles.
In late November, the Baku Court of Appeals upheld the sentence. Ismayilova’s lawyers have filed a case with Azerbaijan’s Supreme Court, Interfax-Azerbaijan reported on January 18, and expect a hearing “in two to three months.” Under the ECHR rules, Ismayilova has six months from the date of a Supreme-Court verdict to file a suit before the Strasbourg-based court.
In a January 17 interview with NBC’s Meet the Press, Clooney said she would serve as co-counsel on the ECHR case with the Media Legal Defence Initiative, a British charitable organization.
Throwing a twist in the tale, the government-aligned Trend news agency, however, cited Ismayilova’s two Azerbaijani lawyers, Fakhraddin Mehdiyev and Fariz Namazli, as saying they know nothing about Clooney’s involvement in the case. They could not be reached for confirmation of the report.
That said, even an expression of interest by a high-profile lawyer in Ismayilova’s case could be enough to rile Baku; low prices for oil, a key economic engine, already have put the government on the defensive.
*Khadija Ismayilova has worked as a freelance reporter for EurasiaNet.org.General Antranik (1865-1927): “I am not a nationalist. I recognize only one nation, the nation of the oppressed.”Comment
-
Re: Azerbaijan - Internal Political Affairs
Foreign Investors will be thrilled
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email [email protected] to buy additional rights. http://www.ft.com/cms/s/0/691ba696-b...#ixzz3xoktsGR1
Azerbaijan's President Aliyev holds a news conference after meeting NATO Secretary General Rasmussen at the Alliance headquarters in Brussels...Azerbaijan's
Azerbaijan is to impose a 20 per cent tax on transactions to remove cash from the country, as the oil-dependent government tries to contain a currency collapse that has triggered public protests.
Baku’s imposition of capital controls is one of the most extreme measures taken so far by former Soviet countries as the region grapples with a crisis triggered by the plunge in oil prices to 13-year lows.
The manat has tumbled by more than a third since the central bank abandoned its peg to the dollar last month. In the past week, the dramatic deterioration has sparked half a dozen protests in a country unaccustomed to widespread dissent.
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email [email protected] to buy additional rights. http://www.ft.com/cms/s/0/691ba696-b...#ixzz3xol11nrp
The Caspian state has enjoyed an oil-fuelled boom over two decades, reshaping the Baku skyline and inspiring grandiose projects such as the inaugural European Games last year. Oil wealth has also cemented the authoritarian rule of the Aliyev family: first Heydar, president from 1993 to 2003, and now his son and successor, Ilham.
But the fall in oil prices is threatening that model, with the World Bank predicting a sharp slowdown in growth to just 0.8 per cent this year.
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email [email protected] to buy additional rights. http://www.ft.com/cms/s/0/691ba696-b...#ixzz3xol6i6Mj
“President Aliyev is in uncharted territory at the moment,” said Livia Paggi, central Asia and Caucasus analyst at risk consultancy GPW. “The government has been unable to stabilise the situation via conventional means. Now they are trying to restore currency stability by killing foreign exchange transactions.”
The wave of protests is unusual in a country where the government tolerates little opposition. In Siyazan, a small town north of the capital, 55 protesters were arrested last week. Further protests were reported in other towns this week in response to unemployment and rising prices, although the relatively affluent capital Baku has remained calm.
The government has announced measures to ease the impact of the manat’s fall, including a VAT exemption for bread and flour and a rise in pensions by 10 per cent.General Antranik (1865-1927): “I am not a nationalist. I recognize only one nation, the nation of the oppressed.”Comment
-
Re: Azerbaijan - Internal Political Affairs
Azerbaijan: Wielding a Stick While Searching for Carrots
January 19, 2016,
by Durna Safarova and Islam Shikhali Azerbaijan
EurasiaNet's Weekly Digest Civil Society
Authorities in Azerbaijan have managed to contain protests over declining living standards – for now. But with government finances in a precarious state, and the economy rapidly deteriorating, government critics are wondering how long the lid can remain on discontent?
The coastal town of Siyazan, situated roughly 64 miles (103 kilometers) north of the capital, Baku, was the scene of the most intense protests on January 12-13, with 55 arrests being made there.
These days, one can see a police officer standing beneath just about every street light in the center of town, which has roughly 40,000 inhabitants. On the outskirts, a joint military-police post stands barricaded by sandbags, and authorities check every car entering or leaving town.
People congregating near taxi stands or elsewhere in the center tend to disperse at the sight of a policeman. Some town residents are still being arrested. Yet while police can prevent crowds from forming, they are not able to stop people from engaging in impromptu conversations with each other in public spaces about rising prices, joblessness and other sources of economic distress.
Official statistics indicate that Siyazan has an unemployment rate of nearly 74 percent, but many believe that figure under-reports the severity of the situation because not every unemployed person is officially registered. Azerbaijan’s official unemployment and poverty rates stand at about 5 percent.
The government claims that it has poured tens of billions of manats into the regions for development, but many residents in Siyazan, located on a main transportation link to the Russian border, say they have not seen the effects of government spending.
Twenty-five-year-old Siyazan resident Mahir Huseynov claims he has not been able to find a job since finishing high school. “We were there to tell [officials] about our problems,” Huseynov said, referring to the mid-January protests. “But the police detained us immediately. The police threw tear gas into crowds they couldn’t arrest.”
Some protestors were detained in the streets, while others were taken by force from their homes, locals say. “Police check social media and news sites in order to find the protestors they missed seizing in the demonstration [on January 13],” alleged one town resident, who declined to be named or photographed.
“There was a masked guy who asked me what I’m doing there. I told him I can’t earn a living, and now prices are getting higher and higher,” recounted the individual. “I could hardly finish my sentence; they took me into a police car. There were photos of protestors taken from the media hanging on the wall inside the police station. The police said they are going to find them and bring them to prison.”
In a joint statement on January 13, the Interior Ministry and General Prosecutor’s Office alleged that Siyazan protesters had “grossly” violated “public order, disobeyed the legitimate demands of the government’s representatives and committed illegal actions.”
Riot police and Interior Ministry troops used tear gas and rubber bullets to disperse the protesters. “On that day, none of the doctors went home,” commented one local schoolteacher, who spoke on condition of anonymity to avoid losing her job. “Some of them were taken to the police station; some were at the hospital to help people. A lot of people suffered from [tear-] gas poisoning.”
Representatives of the Siyazan municipal government declined to answer questions about the protests. “We can’t talk to the media without permission from the top,” a government employee said.
Officials in Baku have blamed the opposition Popular Front Party of Azerbaijan and Musavat Party for organizing the mid-January demonstrations. Initially, some officials also made vague references to “religious radicals,” but authorities have not elaborated on the supposed radical connection in recent days.
In Siyazan, police detained local Musavat chairperson, Fakhraddin Abbas, and a senior party advisor, Mardan Mekhmu. The two were released after being warned not to leave the country, news agencies report.
While strong-arm tactics can probably succeed in keeping the protest mood in check over the short term, the government’s ability to ensure stability over the longer term will likely come down to the economic responses it can offer.
Officials’ room for maneuver has been greatly restricted by the precipitous decline of energy prices. Azerbaijan has long been dependent on the profits generated by energy exports. But now – with Brent crude, the international benchmark, standing at just under $29 per barrel on January 19, the government is no longer capable of throwing money at social problems to make them go away.
In a sign that President Ilham Aliyev’s administration is concerned about the future, the country’s rubberstamp parliament on January 19 imposed a 20-percent tax on certain foreign-currency outflows, granted a seven-year exemption from customs duties for investors in “priority” sectors and an income-tax exemption for personal savings accounts.
In addition, Aliyev decreed a 10 percent increase in pensions and some state-funded salaries, including for the police, effective February 1. He also called for greater attention to social-welfare issues. Other officials have indicated the 2016 state budget will need revision.
The Central Bank also may allow certain dollar-denominated loans to be paid off at the more favorable, pre-devaluation rate of 1.05 manats per US dollar — a 55 percent difference from the current exchange rate — news agencies reported.
While such moves could buy authorities some time, the question remains whether the government has the money to meet its new commitments.
Aliyev seems sure that the government has sufficient resources. “Azerbaijan can easily cope with the difficulties [of lower oil prices] if the instructions given … are followed,” the president asserted.
The source of much of the government’s revenues, the State Oil Company of the Republic of Azerbaijan, does not appear as optimistic as the president. On January 18, company representatives gave investors eight days to redeem $500 million in corporate Eurobonds set to mature next year.
Opposition leader Ali Kerimli, head of the Popular Front Party of Azerbaijan, contends that the government’s response is inadequate.
“A six dollar [10 manat] increase in pensions, [and] renaming the Ministry of Economy are not reforms,” he wrote on his official Facebook page. (Aliyev on January 16 ordered that the Ministry of Economy and Industry be called the Ministry of Economy). “They are not serous steps.”
In Siyazan, an elderly man waiting in line at an ATM said a pension increase would do little for him. With a wife, two sons, a daughter-in-law and grandson to support, “[t]his pension of 174 manats [$111] is not enough even for five days’ food.”
“What should I pay for with this money? Electricity? Gas? Water? Medicine? Or food? It has become impossible to survive in Siyazan,” the man said.
Editor's note: Durna Safarova and Islam Shikhali are freelance reporters who specialize in writing about developments in Azerbaijan.Comment
-
Re: Azerbaijan - Internal Political Affairs
January 25, 2016 7:53 pm
Azerbaijan leader enters uncharted territory as oil boom ends
By Jack Farchy in Moscow
The oil boom that turned Baku, the Azerbaijan capital, into a kind of Dubai on the Caspian has ended
If any world leader has surfed the wave of the oil boom, it is Ilham Aliyev.
In 2003, just as oil prices began to soar, Mr Aliyev succeeded his father as president of Azerbaijan. Over the next decade he presided over an era of rising prosperity that transformed Baku into a kind of Dubai on the Caspian and imbued the country with the newfound confidence to project itself on the world stage.
But Azerbaijan’s oil boom has come to a juddering halt. After months of denial about the impact of plunging oil prices the central bank abandoned its dollar peg in late December, sending the manat down more than a third. This prompted the bank to restrict foreign exchange transactions and then last week to impose capital controls in the form of a tax on exporting currency.
The rapid change in Azerbaijan’s fortunes poses the greatest challenge Mr Aliyev has yet faced.
Protests over rising prices and unemployment have broken out across the regions — a rare display of public discontent in an autocracy where dissent is rarely tolerated. The government is rattled.
“It’s a new phase for Azerbaijan. They don’t seem to be prepared for what happens next,” says Thomas de Waal, a senior associate at the Carnegie Endowment for International Peace. “That’s partly a phenomenon of a leader for whom life got better and better, living in a bubble surrounded by people who confirmed his narrative.”
In contrast with his father Heydar Aliyev, a former KGB chief whose strongman style was credited with restoring stability to his conflict-wracked nation when he became president in 1993, Mr Aliyev has ruled largely through patronage to appease the various interest groups he depends on for support.
With oil revenues high, Azerbaijan has seen its poverty rate fall from 49 per cent to 5 per cent in little over a decade, but the majority of wealth has accrued to a small but powerful cadre of businessmen and politicians. Observers say the president has maintained stability by balancing the competing interests of this elite.
Azerbaijan stands at a crossroads of civilisations and markets, old and new, and derives its identity from multiple sources.
Describing him as the “keystone in the arch” of Azerbaijani politics, Audrey Altstadt, professor at the University of Massachusetts and author of a history of post-Soviet Azerbaijan, says: “It’s not so much that he is the great genius national leader like his father, but he keeps the balance.”
This cadre includes Kamaladdin Heydarov, minister for emergency situations, who has close ties to the notoriously corrupt customs service and controls a business empire stretching from construction to caviar, and the Pashayevs, the family of Mr Aliyev’s wife, who own the largest private-sector bank in the country and many of its top hotels.But growing unrest in Azerbaijan’s poorer regions may force a change of tack. “Stability is a function of keeping various power groups happy. One of those power groups is now the people of the country,” one banker says. “I think the oligarchs are all worried.”
The past year has seen a shake-up among the Azerbaijani elite that analysts say is unprecedented under Mr Aliyev as tensions rise amid diminishing resources. Last spring, dozens of businessmen were arrested over alleged fraud at the International Bank of Azerbaijan. In October, Eldar Mahmudov, who for a decade headed Azerbaijan’s ministry of national security — successor to the KGB — was dismissed, along with most of his subordinates.
“The money from the crude that flew into the country helped to close a lot of gaps, a lot of deficiencies. All of that is now out there on the surface,” says one Azerbaijani businessman.
Meanwhile, the government has put the elite in its sights as it seeks to make up for a revenue squeeze that has forced it to cut spending by 15 per cent this year.
Businesspeople and their advisers say they have come under pressure to sell assets abroad and to contribute more to Azerbaijan. Mr Aliyev has also announced a push for greater transparency in the customs service and called on his government to “fight monopolistic trends” — a reference to niches of the economy controlled by oligarchs.
One Baku-based banker says that while Azerbaijani companies still have to make hefty payments before they can import what they need, the payments are now in the form of fees that go to the government rather than brown-envelope bribes to corrupt officials. Last week the president also announced a series of measures aimed at appeasing the public, including cutting taxes on bread and flour and raising pensions and salaries for civil servants.
The stakes are high. The country’s crisis will be closely watched by oil-rich neighbours keen to maintain stability amid falling living standards. Any destabilisation of Azerbaijan could also threaten a key source of Europe’s energy supplies and have unpredictable consequences for Baku’s smouldering conflict with Armenia over the Nagorno-Karabakh enclave. However, in the short term few observers expect unrest to spread to relatively prosperous Baku. Mr Aliyev and his government, long paranoid about the possibility of a popular uprising, have largely squashed the formal opposition, and prominent activists and journalists have been jailed.
But if the president’s efforts to boost the economy do not soon bear fruit, Azerbaijanis may lose patience with their government, analysts warn.
Mr Aliyev struck an optimistic note last week at the World Economic Forum in Davos, promising that the manat would not “suffer” any more even if oil prices fell further.
But “if after saying the manat has stabilised, if he’s forced in a month or two to change it, people will not forget that he assured them that all was good,” says Ms Altstadt. “That might really increase the risks to Aliyev and his oligarchs.”General Antranik (1865-1927): “I am not a nationalist. I recognize only one nation, the nation of the oppressed.”Comment
Tweet
Comment