Azerbaijan’s economy has grown spectacularly over the last 15 years, due to an abundance of fossil fuels in the Caspian Sea. Elections on November 1st appeared to show continuity but the future is uncertain due to strained relations with the EU, a fall in the price of oil and the ‘frozen conflict’ in Nagorno-Karabakh.
Novembers parliamentary elections were, by Azerbaijan’s standards, a quiet affair. The result was never in doubt, the ruling New Azerbaijan Party claiming a sizable majority in the National Assembly with little real opposition, most of which boycotted the poll.
Azerbaijan boasts impressive growth record
While the country presents an outward stability and growing affluence, look beyond the natural resources and new sports stadia in Baku; however, and the country faces uncertainty. After spending much of post-Soviet years moving slowly towards the EU, Azerbaijan may now be attempting to follow in Belarus’ footsteps in balancing East against West.
Azerbaijan is in several ways, well placed. The country is oil and gas-rich, the proceeds of which have driven spectacular growth, averaging 11% annually between 2001 and 2015.
It is a secular state in the Islamic world with ties to the EU, including its ‘Eastern Partnership’ programme, as well as NATO’s Partnership for Peace initiative dating back 20 years. These links have been cultivated in part because of the country’s geopolitical importance, wedged between Russia, the EU, Turkey and Iran.
It has invested in human capital and the population is well educated at some of the oldest universities in the region. Azerbaijan has recently turned to showcasing its development by hosting events such as this year’s inaugural ‘European Games’ and will stage a Formula One Grand Prix in 2016.
In the 1990s a number of oil companies signed the ‘Contract of the Century’ with the Azerbaijani government and utilizing this energy is a pet project of the European Commission. There is a major oil pipeline running from the country to the EU, the Baku-Tbilisi-Ceyhan pipeline, while the South Caucasus gas pipeline is intended to link the Shah Deniz field with the Mediterranean.
Elections highlight internal problems
This weekend’s elections, however, are indicative of wider issues in the country. Outwardly they showed continuity and a consolidation of the ruling party, led by President Ilham Aliyev (himself the son of the previous President Heydar Aliyev).
Most of the main opposition parties, however, declined to field candidates in the knowledge they would not be competing on a level playing field. For the first time, OSCE monitors – who have not declared any election since 1993 in the country free and fair – did not observe the polls, citing government restrictions.
Dissenting voices, including many civil society activists, have been jailed as part of a draconian crackdown in the last two years and the country has many more political prisoners than any former Soviet-state.
The treatment of political prisoners brings into question the country’s commitment to the rule of law. The scale of events has shocked the outside world and the country receives constant criticism from human rights groups. Moreover, the Azerbaijan has been ruled against on several occasions by the European Court of Human Rights concerning electoral fraud and freedom of expression.
Baku faces international reproach
This is part of wider discord in European institutions caused by Azerbaijan’s actions. It was admitted into the continent’s human rights and democracy-promoting body, the Council of Europe in 2001, but has been accused of ‘Caviar Diplomacy’, essentially bribing politicians.
There have been calls for sanctions to match the treatment handed out to other Eastern Partnership countries Moldova and Belarus. The European Parliament recently denounced the Aliyev regime, but unlike many other authoritarian regimes; however, Azerbaijan appears to be very easily offended by criticism, with Baku, stating in September that it might review relations with the EU.
According to Transparency International its Corruption Perceptions Index score leaves it 126th out of 175 countries while the World Bank places it 63rd in its Ease of Doing Business rankings.
Oil glut clouds economic outlook
Although the government has stated its aim to diversify the economy, it may struggle to attract investment without greater stability, rule of law and transparency.
Frozen conflicts legacy of Cold War
This all feeds into Azerbaijan’s most intractable, and divisive issue, the dispute with Armenia over the territory of Nagorno-Karabakh. The region is internationally recognized as being part of Azerbaijan but the 1991-1994 war left it under de facto Armenian control.This is one of the ‘frozen conflicts’ that dog the post-Soviet space and, as in the other examples, Russia’s influence looms large.
Russia backs Armenia but tacitly supports both sides. A renewal of hostilities is a possibility as the region becomes increasingly militarized, encouraged by Russia. As a result, a resolution to the Nagorno-Karabakh dispute, and broader stability in the Caucasus, currently seems unlikely.
The future direction of Azerbaijan will be balanced between a more open and liberal turn towards Europe, or a retreat back towards Russian clientelism. This will depend on how it reacts to enticements from each side, and criticism from the EU. Most likely, the Aliyev regime – similarly to Lukashenko in Belarus – will try some kind of balancing act, playing one side off against the other in an attempt to gain something from each.
