Energy in Azerbaijan

[Vrej1915]

Re: Energy in Azerbaijan

The Road Map of an Anti-Crisis Strategy in Azerbaijan
Written by Dr. Vugar Bayramov


The Road Map of an Anti-Crisis Strategy in Azerbaijan


The current economic policy, ///. According to the University of Pennsylvania Global
Think Tanks Rankings, his centre has been selected as a top think tank in Southern Caucasus
and Central Asia last 5 years.

http://cesd.az/new/wp-content/upload...r_Bayramov.pdf

1- To begin with, the 33 billions do exist only in the propaganda machine of Baku. The money is gone for long.... or is invested as personal belonging of the Aliyev family, like the 100 or more million GBP worth real estate in central London. If there was such a reserve, they won't beg for 4 billion from the IMF.

2- A bakinski man graduated in 2003 who's papers are translated in 25 languages, who is awarded by a islamic classification from obscure Jordan is himself a product of the same machine..., and pretending to ignore the real problem does just value his credentials.

[armnuke]

Re: Energy in Azerbaijan

The Road Map of an Anti-Crisis Strategy in Azerbaijan
Written by Dr. Vugar Bayramov


The Road Map of an Anti-Crisis Strategy in Azerbaijan


The current economic policy, including the monetary policy needs to be compatible with post-oil
or crisis period. Presently there are two major priorities in economic policy of government and the
Central Bank: to constrain inflation and prevent or delay potential variations in the exchange rate
of national currency. These priorities are important, however they are not and should not be, the
key targets in times of economic hardship and crisis. Limiting money base via administrative
measures may serve the short-term purpose of adjustment, but in medium and long-term may have
negative outcomes. Actually, after the first devaluation of national currency, the government
should have reversed its contractionary economic policy by stimulating economic activity. Being
experienced in planning of anti-crisis measures in several countries, I can state that, the current
economic and monetary policies, concentrated on tightening of monetary base and therefore
leading to decreasing activity in the real sector, needs to be reconsidered entirely. Such policy is
not capable of bringing progress in real sector, in contrast, can lead to closure of even more
workplaces. In order to exit the crisis, the economy requires an injection of “hot money”. The
contractionary monetary policy does not allow this money to enter the real sector. As a result, this
may help to maintain the exchange rate of manat via administrative way, but neither meets the
demand for dollar, nor facilitates the creation of new workplaces. The contractionary policy of the
Central Bank has a deleterious impact on employment, and that is why, it is essential to replace
the prevailing policy with anti-crisis and stimulating measures.

The problem is, currently the monetary policy is based on completing the dollarization process and
to commence anti-dollarization. Limiting the supply of manat via administrative way serves this
purpose as well. Nonetheless, the dollarization process should not be founded on shortage of dollar
and forming “black market”. Unless the demand for dollar is met entirely, the process will prolong
and be like ‘pain in the gut’, and the Central Bank will not be able to accomplish its targets. People
queueing to get 300 USD is not consistent with a stable exchange rate policy. So, shifting the
approach is crucial, and a repudiation of old rules should be the decisive element of the current
economic policy. The restriction of dollar sale has created a serious stagnation in the activities of
entrepreneurs engaged in import. Since businessmen cannot meet their demand for foreign
currency, they have experienced difficulties in foreign trade activities.

All anti-crises theories are founded on expansionary policies, rather than contractionary. Presently,
the opposite is the case in our country, the Central Bank restricts monetary base. Consequently,
reduced money in circulation discourages investment and decreases purchasing power ability.
Monetary base should be shaped not by decreasing the supply of manat artificially though
administrative measures, but according to the law on money circulation. Unfortunately, the present
policy of the Central Bank has failed the proportionality between money supply and gross domestic
product. Of course, new emission is not the answer. That is to say, the Central Bank may be
cautious about injecting new manats into circulation, because they tend to be converted to dollars,
and thereby, increasing its intervention costs. But the fact is that, attracting foreign currency into
the country can accelerate the dollarization process, and manats in circulation will no longer “seek
dollar” but create new economic value-added.

The Central Bank should let the exchange rate of manat to be freely determined in market, though
gradually. It is impossible to keep the exchange rate of the national currency stable through
administrative measures in the long-term. The Central Bank, being cautious of sharp devaluation
of manat, does not pursue exchange rate policy. It may be asked from the Central Bank why our
foreign reserves worth 12 billion USD was expended, given the sharp devaluation of the national
currency was inevitable. If the Central Bank were unable to maintain the exchange rate during
2015, then the Bank should have switched to the floating exchange rate regime not on 21
December, but on 21 February. During crisis, economic policy changes promptly, and it needs to
change in our country as well. Foreign reserves equivalent to aforementioned amount had already
been spent, will not return back. We must ensure that, this 12 billion dollar are to be produced by
real sector, in other words, by entrepreneurs. For this purpose, expansionary measures in real
sector, capable of creating new value, need to be implemented. These measures require the
injection of new currency into circulation, and provision of the long-term loans at a very low
interest rates for entrepreneurs in sectors of comparative advantage. An entrepreneur should be
provided with an opportunity to get a loan transparently at a maximum of 3% for 7 years in order
to produce export-oriented goods.

The assets of the State Oil Fund are continuously viewed as “insurance cushion”. When the
“cushion” is needed? During an economic hardship and crisis period, that is to say, now. It is
interesting why we do not use this cushion? The Norway Pension (Oil) Fund sells its real estate in
foreign countries, but the State Oil Fund of the Republic of Azerbaijan invests in the economy of
Italy though real estate purchases when our country so desperately needs foreign exchange.
However, under present circumstances, foreign currency should be directed into the economy,
rather than channelling it abroad. None of crisis theories cannot answer this question: Why should
foreign currency be taken away from the country and invested to the economy of other country,
provided that there is a demand for it in the economy?

The anti-crisis models unambiguously suggest that, the assets of the State Oil Fund, at the initial
stage 4 billion USD, should be brought to the country, and therefore provided for entrepreneurs
transparently and without a barrier by banks. In order to ensure transparency in the provision of
funds, a commission consisting of civil society representatives, experts, as well as, foreign
managers, can be formed. This will facilitate on the one hand an increased flow of foreign
exchange and will lower the pressure on manat, on the other hand, will increase foreign exchange
reserves of banks, though which an entrepreneurship can be supported. Thus, bringing funds to the
country will have a positive influence both on banking sector and on the development of
entrepreneurship.

The reserves of the State Oil Fund are amounted to 33 billion USD, and 80% is invested in fixedincome
stocks. Other categories include real estate purchases, investments in gold, and securities
respectively 5%, 5% and 10%. The funds of the State Oil Fund will be brought in foreign currency,
and banks will promote entrepreneurship through provision of these funds. As stated, the Central
Bank refrains from injecting manats into the circulation and decreases monetary base in order to
lower money supply and prevent manat to be depreciated even further against dollar. Nevertheless,
if the assets of the State Oil Fund valued at 4 billion USD is brought to the country, and enters to
the circulation, it will not increase the pressure on manat.

Thus, foreign currency will enter into the circulation, and entrepreneurs will be able to contribute
to the non-oil sector by receiving low-interest loans. It is essential to bring the aforementioned
funds of the State Oil Fund at the moment. There is a need to support entrepreneurship. If the
current difficulties persist, the number of closed workplaces and business entities will reduce.
Therefore, in order to meet current foreign exchange demand and to finance entrepreneurship, the
country ought to either to turn to foreign borrowing, or to bring some part of the assets of the State
Oil Fund and making them available for businessmen through banks. There is a need to make a
decision about this at present time. Economic problems can be aggravated if there is a delay in
bringing the assets of the Fund.

Thus, current contractionary policy needs to be reversed completely. On the one hand, it can be
done using the assets of the state Oil Fund. On the other hand, large-scale reforms (structural and
institutional changes, elimination of monopolies and fight against corruption, supporting
entrepreneurship) need to be implemented in order to increase the volume of non-oil exports.
Unless the aforementioned current and strategic targets are realised, we cannot be insured against
the next sharp devaluation.

Vugar Bayramov is a well-known economist in Azerbaijan. He was a visiting faculty member
at the Washington University (USA) in 2002/2003. Bayramov has a Ph.D. in economics. His
papers/books have been translated into 25 languages. In 2010, Bayramov was named one of
the 500 most influential Muslims in the world by The Royal Islamic Strategic Studies Centre
(RISSC) in Jordan. Vugar Bayramov is the chairman of Centre for Economic and Social
Development (CESD, www.cesd.az). According to the University of Pennsylvania Global
Think Tanks Rankings, his centre has been selected as a top think tank in Southern Caucasus
and Central Asia last 5 years.

http://cesd.az/new/wp-content/upload...r_Bayramov.pdf

That's a good article, non of which will be implemented by Aliyev, luckily

[Eddo211]

Re: Energy in Azerbaijan

Total of 36 banks operate in the country, with two being state owned.

11 banks are being liquidated.

http://en.trend.az/azerbaijan/business/2490870.html

Thats what I thought, no more than two influential state banks......the rest of the banks must follow their lead. In fact money flows from theses banks to the central banks.
Al Capon would be proud.

[Gevz]

Re: Energy in Azerbaijan

LOL

F1 races due to be held in Azerbaijan within five years - minister

http://en.apa.az/xeber_f1_races_due_to_be_held_in_azerbaijan_fo_239025.html

[londontsi]

Re: Energy in Azerbaijan

LOL

F1 races due to be held in Azerbaijan within five years - minister

http://en.apa.az/xeber_f1_races_due_...fo_239025.html

Do they mean they are cancelled this year?

Very convoluted way of saying but not meaning anything.

.

[armnuke]

Re: Energy in Azerbaijan

Rating Action: Moody's downgrades Azerbaijan's Baa3 government bond rating to Ba1, places ratings on review for further downgrade
Global Credit Research - 05 Feb 2016
Frankfurt am Main, February 05, 2016 -- Moody's Investors Service has today downgraded Azerbaijan's government bond and issuer ratings to Ba1 from Baa3 and placed the ratings on review for further downgrade.

The key drivers for the downgrade to Ba1 are:

(1) The impact of the further fall in oil prices, likely sustained for several years, on Azerbaijan's economic strength and rapidly worsening medium term economic growth prospects.

(2) The related and rising pressures on Azerbaijan's financial system and balance of payments position, and the loss of confidence in the currency.

(3) The resulting deterioration of the fiscal position and government debt metrics.

The review for further downgrade will allow Moody's to assess the government's likely response to these pressures, including upcoming budget revisions for 2016 and beyond, and the effectiveness of measures aimed at stemming capital outflows.

Azerbaijan's foreign-currency bond and deposit ceilings were lowered to Ba1/NP and Ba2/NP from Baa3/P-3 and Baa3/P-3, respectively. At the same time, the local-currency bond and deposit country ceilings were lowered to Ba1 from Baa3.

RATINGS RATIONALE

RATIONALE FOR DOWNGRADING THE Baa3 RATING

Azerbaijan is highly dependent on hydrocarbons. Oil and gas account for over 90% of goods exports and roughly one-third of GDP, and provide 60-70% of consolidated government revenues. Azerbaijan maintains large foreign assets in its sovereign wealth fund, the State Oil Funds of the Republic of Azerbaijan (SOFAZ), which cushions the highly concentrated economy and government balance sheet. But the fall in oil prices, which worsened since the turn of the year, is having an increasingly significant impact on economic growth, on government financial strength and on financial sector stability.

FIRST DRIVER: RAPIDLY WORSENING ECONOMIC STRENGTH AMID THE FURTHER DECLINE IN OIL PRICES

The first driver of Moody's decision to downgrade Azerbaijan's Baa3 government bond and issuer ratings to Ba1 captures Azerbaijan's rapidly worsening economic fundamentals, as the recent steeper decline in oil prices further undermines the country's medium-term growth outlook. Growth in 2015 declined to 1.1% from 2.8% in the previous year. For 2016, Moody's projects real GDP to contract by 0.7% compared to a previous forecast expansion of 1.7%. For 2017 the rating agency projects growth of around 1%, rising slowly thereafter. But risks are to tilted to the downside, given the deteriorating position of the financial sector and the adverse effects from devaluation on households' purchasing power, consumption and overall growth.

The deteriorating macroeconomic outlook is informed by Moody's ongoing assessment of energy markets and the sharply reduced oil price assumptions in light of continuing oversupply in the global oil markets. Moody's now expects the Brent oil price to remain at levels below US$50 per barrel through 2019. In the past two months, Moody's has revised its oil price assumptions for Brent to US$33 per barrel from US$53 in 2016 and to US$38 per barrel from US$60 in 2017, rising only slowly thereafter to US$48 by 2019.

SECOND DRIVER: FINANCIAL AND BALANCE OF PAYMENTS PRESSURES AND A LOSS OF CONFIDENCE IN THE LOCAL CURRENCY

As a consequence of the oil price decline and rising pressures on the local currency and the central bank's foreign exchange reserves, the local currency was devalued twice versus the US$ within the last year by an overall magnitude of around 50%. Amid the decline in the oil price and devaluation, inflation has increased significantly, decreasing real per capita incomes and resulting in increased political uncertainty. While SOFAZ retains very sizeable foreign currency assets, the central bank's foreign exchange reserves have declined materially over the past year.

The banking system is under increasing pressure. Moody's changed its outlook on the sector to negative in June 2015 to reflect the impact of the oil crisis and devaluation on asset quality, capital, profitability and funding. The environment has worsened since then, with outright deposit outflows and increasing dollarization illustrating both depositors' loss of confidence in the local currency and the implications for the banking system should either economic or financial dislocation cause depositors to withdraw their funds. As a consequence, capital controls have been introduced, the sector has seen wide regulatory forbearance and the largest bank, the International Bank of Azerbaijan (Ba3 stable), has received extensive financial support from the state since the initial devaluation at the start of 2015. Even though the Azerbaijani banking sector is small relative to GDP, its weak position undermines economic growth prospects and poses an additional threat to the government's balance sheet.

THIRD DRIVER: DETERIORATING FISCAL POSITION AND DEBT METRICS

The third driver of Moody's decision to downgrade Azerbaijan's Baa3 government bond and issuer ratings to Ba1 captures the deterioration in the fiscal position and in government debt metrics as a consequence of the slump in the oil price and its adverse effects on hydrocarbon-related government revenue. Approximately 60-70% of consolidated government revenues are derived from the hydrocarbon production, and the roughly two-thirds fall in the oil price since the end of 2014 caused revenues to fall by around 5 percentage points of GDP over 2015, which the rating agency expects to continue into 2016.

As a consequence, the government ran a fiscal deficit at the consolidated government level (including the state budget, the sovereign wealth funds, the State Social Protection Funds and the Autonomous Republic of Nakhchivan) of more than 5% of GDP in 2015, versus a small deficit in 2014. The fiscal balance has in fact worsened in every year but one since 2008, when it stood at a surplus of nearly 19% of GDP. Taking as a baseline the government's approved 2016 budget plan and Moody's underlying assumptions for the macro economy, the rating agency would expect the deficit to widen further to around 6% in 2016. However, that budget assumed an oil price of US$ 50 per Barrel, and is in the process of being revised to incorporate a more up to date assumption. The risks of an even larger budgetary imbalance this year are therefore very significant.

The combination of a worsening fiscal position, declining nominal GDP and the fall in value of the Manat have caused the government's debt burden to increase very materially (its debt being largely denominated in foreign currency), a trend that is expected to continue. The government-debt-to-GDP ratio rose to above 28% of GDP by the end of 2015 from a low 11% in 2014. Going forward, Moody's projects that it will increase substantially further this year, likely reaching above 40% of GDP by the end of 2016. Again, the risks are distinctly to the upside, given both the sensitivity of the debt burden to weaker growth and to revised budget assumptions, and the growing recapitalization need of the Azerbaijani banking sector.

RATIONALE FOR THE ONGOING REVIEW FOR FURTHER DOWNGRADE

The review for further downgrade will allow Moody's to assess scale of the threat posed by the oil price shock to the government's balance sheet. It will offer further insights into the effectiveness of capital controls and the likely path for the Manat, and the consequent impact on inflation and on the size of the debt burden of the government and of the enterprises close to government. It will allow the rating agency to understand the clarity and credibility of the government's likely response to these pressures, both in 2016 through budget revisions and beyond.

During the review, Moody's will also assess how much positive weight should be placed on the country's strong fiscal buffers (including the Sovereign Wealth Fund), given how they have developed since end September 2015 in light of the persistent pressures on the local currency. At around US$ 35 billion (or roughly 100% of forecast 2016 GDP) at the end of September 2015, SOFAZ's foreign currency assets are large, but potential calls on these funds are growing -- emanating from the possible future need to refinance government debt, support for the banking industry, refinance the debt of State Owned Enterprises (SOEs), and fund future budget deficits.

The review will also allow Moody's to explore in more detail the risks posed by the banking sector to the government's balance sheet, given the increasing dollarization of the economy, diminishing profitability and rising levels of non-performing loans.

WHAT COULD MOVE THE RATING UP/DOWN

Although unlikely in the foreseeable future, upward pressure on Azerbaijan's government bond ratings could follow significant improvements in the country's institutional strength, evidence of sustained economic diversification and/or a decrease in geopolitical risks. A more rapid-than-expected increase in the oil price would be unlikely to bring about a reversal in the rating trajectory unless accompanied by the rebuilding of fiscal buffers and a higher level of economic diversification, given the uncertainty surrounding whether any such rise could be sustained.

Evidence of credit-supportive institutional strength, most likely through the emergence of a clear, credible fiscal and economy policy response which offers the prospect of containing the deterioration of the fiscal balance and fiscal buffers, while returning the economy quickly to growth, could sustain the rating at its current level.

Conversely, signs of an emerging fiscal or balance of payments crisis would exert downward pressure on the rating. Those signs might include a further sustained fall in the price of oil, continued capital outflows and pressure on the exchange rate and foreign currency assets, a marked worsening in the fiscal balance for which there was no clear reversal, or further stress in/support for the banking system. Deterioration in the domestic or regional political environment resulting in disruptions to oil production and/or foreign investments in the economy would also be highly credit negative.

Prompted by the factors described above, the publication of this credit rating action occurs on a date that deviates from the previously scheduled release date in the sovereign release calendar, published on www.moodys.com.

GDP per capita (PPP basis, US$): 17,761 (2014 Actual) (also known as Per Capita Income)

Real GDP growth (% change): 2.8% (2014 Actual) (also known as GDP Growth)

Inflation Rate (CPI, % change Dec/Dec): -0.1% (2014 Actual)

Gen. Gov. Financial Balance/GDP: -0.4% (2014 Actual) (also known as Fiscal Balance)

Current Account Balance/GDP: 13.6% (2014 Actual) (also known as External Balance)

External debt/GDP: 15.5% (2014 Actual)

Level of economic development: Low level of economic resilience

Default history: No default events (on bonds or loans) have been recorded since 1983.

On 04 February 2016, a rating committee was called to discuss the rating of the Azerbaijan, Government of. The main points raised during the discussion were: The issuer's economic fundamentals, including its economic strength, have materially decreased. The issuer's fiscal or financial strength, including its debt profile, has materially decreased.

The principal methodology used in these ratings was Sovereign Bond Ratings published in December 2015. Please see the Ratings Methodologies page on www.moodys.com for a copy of this methodology.

The weighting of all rating factors is described in the methodology used in this credit rating action, if applicable.

[Azad]

Re: Energy in Azerbaijan

"The head of trading at Morgan Stanley just confirmed Wall Street's worst fear

It has been a horrible first quarter in trading.
Sovereign wealth funds have been quiet since the third question, he said, adding that if the crude oil price hangs around the $30 mark for a while, they might start to sell their assets too."

https://www.yahoo.com/finance/news/head-trading-morgan-stanley-just-201736075.html

[HyeSocialist]

Re: Energy in Azerbaijan

"The head of trading at Morgan Stanley just confirmed Wall Street's worst fear

It has been a horrible first quarter in trading.
Sovereign wealth funds have been quiet since the third question, he said, adding that if the crude oil price hangs around the $30 mark for a while, they might start to sell their assets too."

https://www.yahoo.com/finance/news/h...201736075.html

Azeri oil fund SOFAZ sells $200 million on FX market

http://www.brecorder.com/money-a-banking/198/14096/

[Mher]

Re: Energy in Azerbaijan

Another Dynasty Shaken as Oil Crash Tests Azeri Leader's Rule


For Azerbaijan, plunging foreign reserves and two currency devaluations last year provided a stern test for the energy-reliant nation. For its long-time leader, the economic and political challenges are just starting.
President Ilham Aliyev is on unfamiliar ground, facing a crisis that turned the manat into the world’s worst performer last year. He’s now confronted by the worst dissent in more than 10 years as prices surge in the Caspian Sea nation of 9.5 million that his family has ruled for more than four decades. The rumblings in Azerbaijan show the issues facing oil dynasties as currencies from Riyadh to Abu Dhabi come under pressure from crude’s slump to a 12-year low.
“The president has no experience of dealing with a crisis of this kind -- he’s become accustomed to living standards and real wages rising year after year,” said Alex Nice, an Economist Intelligence Unit analyst covering Azerbaijan. “Dependence on oil is similar in scale to Saudi Arabia, but Azerbaijan has smaller sovereign reserves.”

With an economy as reliant on oil as Iraq and Venezuela, the Azeri currency’s first annual loss against the dollar in more than a decade has sheltered government finances while stoking consumer prices and driving up poverty. Inflation may reach 15 percent this year, according to Standard & Poor’s. Costs of imports such as food and drugs have jumped.

Carrot, Stick
The president is using a carrot-and-stick approach to maintain order. In a country where protests are rare and unsanctioned rallies are punishable by heavy fines, riot police have been sent to quell nationwide demonstrations blamed on “religious radicals” and the secular opposition. The unrest is the worst since clashes in 2005 after disputed parliamentary elections.

About a thousand people rallied outside the ruling New Azerbaijan Party’s office in the country’s second largest city of Ganca on Friday, demanding jobs. Police detained several of them, according to video shared on website of Meydan TV, a Berlin-based pro-opposition online television channel.
At the same time, Aliyev signed more than 20 decrees in January alone to raise salaries and pensions. This year’s government spending plan will increase by 2 billion manat ($1.2 billion), Finance Minister Samir Sharifov said Jan. 28. Expenditure will still be down on 2015.
That may not be enough to extend an unprecedented economic expansion. An oil boom helped gross domestic product grow an average 13.5 percent a year in 2003-2012, during which time per capita income soared to $8,000 from $900. GDP will contract 1 percent this year, while the per capita indicator will fall almost half to $4,100, according to S&P, which predicts the budget will remain in deficit through 2018. S&P cut Azerbaijan to junk last month, the nation’s first-ever sovereign downgrade. Moody’s Investors Service followed on Feb. 5.

Oil Era
To counter the economic pain, the Azeri authorities have shuttered one in six banks and met the International Monetary Fund and the World Bank last week over a potential $4 billion loan, according to reports by the Financial Times and the Interfax news service. Aliyev says Azerbaijan doesn’t need financing from the lenders.
“We need to understand that Azerbaijan’s oil era is over,” said Qubad Ibadoglu, a visiting professor of economics from Baku at Duke University who worked for more than 10 years at the Economic Studies Center research group, based in the Azeri capital. “We can’t defend the manat because we couldn’t build a diversified economy in time.”

‘Grim Reality’
The currency’s woes may be only part of the issue, according to Gabriel Sterne, head of global macro research at Oxford Economics Ltd. in London.
“I’m not sure you can blame the protests on the depreciation,” he said. “The root cause is probably the new grim reality of deteriorating finances and poor governance. Depreciation is just a symptom.”
Aliyev, who took over from his late father after a disputed election 13 years ago, described graft as a “malady” in a televised cabinet meeting last month, pledging action to eradicate it. Azerbaijan ranked 119th of 168 nations in Transparency International’s 2015 Corruption Perceptions Index, alongside Russia and Sierra Leone. Property rights and judicial independence were rated 101st of 140 countries in the World Economic Forum’s latest Global Competitiveness Report.

No Untouchables
In October, Aliyev dismissed National Security Minister Eldar Mahmudov before firing top security officials accused by the General Prosecutor’s Office of corruption, abuse of office and meddling in businesses. Mahmudov, who has no lawyer and is unreachable having effectively been placed under house arrest, has never commented on the allegations against him. Aliyev said last month that “no one’s untouchable.”

Economically, Azerbaijan may have the resources to battle on. Besides $4.4 billion of reserves, its sovereign wealth fund contained $33.6 billion on Dec. 1. After the manat’s depreciation, that’s equivalent to about 100 percent of 2015 GDP, according to S&P.
The devaluations have so far been enough to balance out the decline in oil prices, helping shield the oil fund and the budget, according to Krisjanis Krustins, an analyst at Fitch Ratings, which has Azerbaijan at its lowest investment grade.
“The government has the resources to make a determined defense of the currency,” Krustins said.

The bigger challenge may be to maintain the fabric of the political system. Police last Monday stopped a protest by shopkeepers in the nation’s third-biggest city of Sumqayit, with similar demonstrations also held in Baku.
Aliyev faces the “near-impossible task of how to buy off very different groups of discontented citizens,” Thomas de Waal, a senior associate at Carnegie Europe, Belgian-based a research group, said last month.
The president “has never been the dominant monarch his father was, more of the pivot at the center of the elite, the ‘first amongst equals,’ and arbiter of disputes amongst top officials,” according to de Waal. “Cracks are now appearing in this structure.”

http://www.bloomberg.com/news/articles/2016-02-07/another-dynasty-shaken-as-oil-crash-tests-azeri-leader-s-rule

[Joseph]

Re: Energy in Azerbaijan

Still feeling the burn

http://www.wsj.com/articles/azerbaijan-still-fighting-fatal-caspian-oil-rig-fire-after-two-months-1455128322

Azerbaijan Still Fighting Fatal Caspian Oil-Rig Fire After Two Months
Fire killed up to 30 workers
By SELINA WILLIAMS

Feb. 10, 2016 1:18 p.m. ET
LONDON—A fire on a Caspian Sea oil rig that killed as many as 30 workers was still burning on Wednesday, over two months after a storm ruptured a gas line sparking the fire, according to the head of Azerbaijan’s state oil company.