AZERBAIJAN
AT THRESHOLD OF EUROVISION 2012
Myths & Realities
Azerbaijan: Land of Lost Opportunities
Enduring a formidable opposition within the
country and seemingly persistent pressure from the West to democratize, the
Azeri governance system has proved remarkably resilient to change displaying an
ever worsening record of human rights, democratic institutions, and economic
reforms. As the governance system created by the former president, father of
the current one, was somewhat justified in the eyes of the public, it has
regressed to a much deplorable form under the son. Instability following the collapse
of the Soviet Union produced a social inequality, war and refugees, and a
society that could not organize itself into a stable political system. Out of
this was born the situation that made a trade-off between stability and freedoms
possible.
The political system eventually evolved into
the one that is based on one dominant force – control of resources and resource
windfalls. While the post-Soviet legacy can be seen as a common pattern for
most of the Soviet republics, except for Baltic States, Azerbaijan arguably
stands as either the “leader” in anti-democratization, or at a minimum has
suffered the biggest opportunity loss provided its massive per capita oil
revenues.
Classic Case of Resource Curse: Damned by
Corruption
First and most obvious distinct feature of
the country is a highly concentrated and immense source of revenues with
consequences of resources dependant, and even worse - s single resource
dependant – economy. From depressing the growth of the non-oil sector to rent
captivity by the elite group and capturing the entrepreneurial and possibly
progressive talent by the Government, the oil revenues have gradually infiltrated
and corrupted the very fabric of the society, both morally and in economic
interrelations. The country is experiencing a true resource curse, may be
unprecedented in modern history, with no incentive to build strong public
institutions or to pursue self-realization on an individual level. As the elite
thrive on resource rent, the rest of society is kept satisfied by meager
welfare assistance and occasional populist policies. Despite of all oil
revenues, the country still lags behind Russia and Georgia on access to clean
water and sanitation, ranking close to many African countries.
Economic prosperity, on another hand, is only
accessible for those who can get into government service, or close to
government members of elite families. The small private sector offers only
limited opportunities. The company growth is limited to niche areas not covered
by government-related monopolies. Industrial production suffers from
unpredictable duty and tax regimes; cross-border trade by Azerbaijani companies
is second lowest in Europe and Central Asia due to impossible custom
arrangements. Visits by police and a number of other government services choke
the revenue base of smaller companies. The economy is defined by monopolies in
regards to production, imports, and exports – thus solidifying socio-political
distribution of segments of economy to cronies from the immediate circles with
total controls to set up the prices. Hence its economic freedom indexes sit
comfortably in the lower third section of ranked countries – last ranked 143 of
183.
The corruption is universal and pervasive in
the country; it drives the hiring and firing, graduating and licensing,
sickness and recovery, crime and punishment. The system of laws and regulations
has now been purposefully complicated to provide for judgment, ambiguity, and
arbitrage in every relation between economic agents. The extent of corruption
has eroded the very notions of the rule of law and interest of the state.
Corruption is one single most demoralizing irritant for all people and there
seems to be no solution to it, as it perpetuates from the top officials all the
way down. The construction costs per unit of roads and utilities are times and
times more when compared to any compatible market. Ministers are committed
day-light robberies by issuing hundreds million dollar contracts to their
relatives for constructions, repairs, state procurement, etc. The impunity and
blatancy of skimming the people’s wealth is a shocking phenomenon. Corruption
has become an open way or doing business and achieving with the most harmful
damage to the mentality of the upcoming youth.
Second, the country’s resources and
transportation capacity and hence its importance for global and European energy
security, its geopolitical location between Iran and Russia, and ethnic and
cultural closeness to Turkey makes the country an important partner for large
states – USA, Russia, Europe. As many small but rich countries, the legitimacy
of the government is derived not only from its people, but also from the
acceptance of larger players. Azerbaijan enjoys a unique treatment by few
super-powers who have a major stake in the stability of the country, even if at
the expense of lack of shared values, such as democracy. The President can
easily arbitrage between these interests, skillfully avoiding falling under
much influence or pressure from any one. Energy security and geopolitics – or realpolitik - trump most of the ephemeral
cards on modern values. The President is very far from being an international
outcast.
Goodfellas: The Elite
Third factor is the inheritance of the
government by the current president from the former president, his father,
Heydar Aliyev, along with the established elite. The former president built a
government that consisted of absolute loyalist with deep personal and family
ties to ensure unconditional loyalty in support of his political philosophy
based on internal stability. The elite ensured the ‘transfer’ of power to the son,
the current president. As such, the current president simply inherited the
existing system with inability to touch parts of it or re-negotiate the
relations, as it came as one whole, intertwined system. The elite is tied
together in the extreme form of Omertà,
through participating in similar massive corruption schemes, common crime and
joint liability over the systemic failures, cross-dossiers on each other,
cross-favors, appointments of relatives into high ranking positions, and other
relations formed over decades. Anyone stepping outside the ‘bonds’ faces a
threat of immediate reprisal or arrest – in fact, the way out of circle is by
default a prison, with two recently dismissed Ministers in fact serving prison
terms, or an exile.
The establishment divided and conquered the whole segments of economy and has
prospered tremendously. It became ‘filthy
rich’ accumulating billions and billions of dollars of wealth, while more
than 60% of country’s economy is in shadow and under total control of the state
or government related groups.
The extent of the vested interest of the
elite makes it an impenetrable and unshakable administrative force that can
resist and rebuke any attempt of oppositional uprising. The capacity to buy off
the opponents is infinite, protective instinct is acute to prevent gatherings
and demonstrations with a brutal enforcement machine.
The resistance of the elite to any changes to
status quo has been unprecedented! While Kazakhstan had seven prime-ministers
since 1994 and even Uzbekistan has had three since 1991, Azerbaijan has had two
PMs since 1994, the current one appointed back in 1996. The body of ministers
and regional governors stays virtually the same, with occasional rotations.
To Every Action there is an Opposite
Reaction:
Possible ways of bringing on the change in
the country in light of the need to maintain the stability are not many. The
meticulous persecution by the elite has rendered the opposition totally
helpless. Failed attempts at elections have disillusioned people on the
prospects of political democratization in general and ability of the West to
influence any change. In addition, the disillusionment over the democratic
reforms has taken away any possible enthusiasm or energy from the masses for
political activity, nearly impossible to revive. Scattered youth movements or activists have
seen such harsh demolishment that it makes it very unlikely for it to gain any
ground or find and protect promising leaders. The country was recently ranked
162nd out of 179 countries in media freedom by Reporters Without Borders. The
years of failed attempts have effectively diffused the mantra of democracy in
the crowd.
The Arab Springs has introduced a new
threat to harsh-state pundits around the world – possibility of instant and
leaderless revolutions; and a new hope for those who feel endlessly oppressed –
possibility of spontaneous instantaneous comradely with fellow citizen.
If anything, this just shows one thing – inevitability of the end of ‘immortal’
regimes. This proved once more that people will eventually reach the state of
mind when they will require and force change. This was manifested in Guba on 4/1.
The measures of Government to mitigate the
risk of contagion are quiet few. Like in ancient Rome, the Government is lavish
in its spending on entertainment for masses. It puts massive amount of dollars
into never-ending face-lift of the capital, purchases and nationalization of athletes
from wrestlers to ice-skaters, invests legally and corruptly into winning
Eurovision 2012 context, bids for Olympics. Of course, these acts follow double
purpose – entertaining and preventing the masses from too much focus on genuine
individual realization and freedom of being; but also these open the flood
gates for new corruption of the state budget. Each such initiative is a present
to a government insider to tap into unlimited budget expense. And Eurovision
2012 alone allowed swiping a large area in downtown from residents, move them
into outskirts nearly forcefully, and ‘privatize’ the area. Another measure has
been a fake anti-corruption campaign – a calculated and not genuine process.
Even if well-orchestrated, faking the anti-corruption drive will inevitably get
discredited.
Evolution vs. Revolution: Shouldn’t You
Hedge?!
If an evolution (vs. revolution) towards
reforms is of value, there are only two possibilities: (i) convince the current
President to carry through genuine reforms; or (ii) change government through
orderly democratic processes. Due to the lack of a meaningful ongoing social
dialogue In Azerbaijan, like in Arab Spring Countries, the society seems to be
unable to do either one, unless its emotions boil out and it directly and
violently induces change in the streets. Who then can broker such agreements
and who has such convincing power. The universal question is – what is the exit
strategy for such leaders? Is there a room for a social compromise when the
elite can become legitimized to exist without the protection of the government
systems, thus allowing the government to reform? Or would the elite stubbornly
wait for its demise which then would drag down the government, risk long term
stability, and shatter civility of the social architecture?
It is hypocritical for London to issue long
term visas to every corrupt official and saving the UK economy by inviting
corrupt money stolen from the ordinary people, with pretence of liberal and
open economy in the Kingdom. And, in fact, what is the need for pretence if Mr.
Blair is advising Azerbaijan Government and Prince Andrew having business
relations with the Goodfellas. USA
Senator McCain and six other USA Senators attended an opening of an
Azerbaijan-American Association also funded by the corrupt elite. Hillary
Clinton tells Ilham Aliyev that “ties between USA and Azerbaijan are deep,
important, and durable”. The recent Spiegel articles and German TV news clips,
USA CNBC Channel run of “Filthy Rich” on Azerbaijan, continuous Europarliament
statements is like a whisper in the desert of hopelessness into the ears of
people – you are not alone.
The time has to come when the Governments of
super-states have to draw the line in the sand and take a clear siding with the
people. The choice is not between interests
super-powers and their values, if
one is to think of long term interests. If there one lesson from the Arab Spring
– it would be that free-market rule applies, i.e. hedging. At a minimum, how you, the super-powers, are hedging your long term positions with
the people?!
The long term implications of inaction are
devastating. The ‘fastest growing GDP in the World’ is a myth, as the growth is not sustainable and benefits only few;
revenues are consumed and not converted into human wealth
or institutions. The ability to host Eurovision 2012 is not a demonstration of
economic or political might, rather an ability to deploy large cash fast and
make hasty decisions over moving people and city blocks; plus ‘shrewd’ business
skills to make even more money on the event.
What is reality is that the oil
revenues in the country are not as long-lasting as in Arab Gulf. Once the oil
revenues start dropping, so will the Government’s welfare. As the elite takes
out the massive wealth out of the country and invests overseas, the people
would be left broke and with impossibly expensive infrastructure that is being
built now to maintain. This could produce an utterly upset devastated nation,
deceived out of its wealth, in the very fragile corner of the planet.
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