Azerbaijan prides itself in being the first Islamic republic, established in 1918, even earlier than the Republic of Turkey which was established in 1923.  However, just like Turkey, Azerbaijan is far from a perfect democracy — and probably not a democracy at all.  This was illustrated by October’s reelection of Ilham Aliyev whose “stunning victory” was declared before voting had even started.  Besides the clear corruption in Azerbaijan (which ranks 139th out of 174 countries), journalists and reporters who expose corruption within the Azeri elite are “beaten, kidnapped, blackmailed, silenced with bribes.

Azerbaijan is currently the 20th largest producer of oil in the world and consequently the 4th largest in Europe.  Most of this oil travels through the Baku-Tbilisi-Ceyhan pipeline (from Azerbaijan, through Georgia, and then to Turkey).  This pipeline is essential to Western efforts to diversify energy sources in Eastern and Central Europe whose energy markets are currently dominated by Russia.  In order to secure this process, Blackwater (now Academi) contractors were sent to Azerbaijan “to enhance Azerbaijan Naval Sea Commando’s maritime interdiction capability.”  According to CEO Erik Prince, these men were hired to go in and build by the US government.  Azerbaijan’s close proximity to Iran also makes the country favorable to American and allied geostrategic interests, with Israel gaining access to airfields which its planes could land on when returning from a potential attack on Iran.

Image courtesy of World Economic Forum, © 2009, some rights reserved.

Image courtesy of World Economic Forum, © 2009, some rights reserved.

There are multiple negative side effects associated with having large energy reserves.  One of the major ones includes decreased levels of democracy.  While there are some examples of countries with large reserves maintaining high levels of democracy — a prominent one being Norway — there are many which see decreased democratization.  One of these is Azerbaijan and the reasons could be linked back to corruption.  In this scenario, a resource-rich country often sees its reserves being exploited by a few wealthy or powerful people. These people thus have the capital to control and influence political society within the state.  From there, a kleptocracy develops where there exist not only high levels of economic inequality, but also a centralization of political power and influence within the hands of an “oligarchy” (as they are referred to in Russia) which uses its wealth to influence politics within the state.

The history which concerns us here began with Ilham Aliyev’s father, Heydar Aliyev.  During his presidency, Azerbaijan made what was called the “contract of the century” where Western oil firms including BP and Amoco, along with the Azeri state oil company, SOCAR, bought up shares of the 20% of oil profits which did not go to the Azeri government.  There was thus a major interest in what would happen to Azerbaijan once they got rich.  In order to preempt the problems mentioned above, Azerbaijan was one of the first signatories to the Extractive Industries Transparency Initiative (EITI) which was launched by Tony Blair.  This initiative would have all signatories publicize their oil earnings as a sort of check by civil society groups on politicians.  The EITI does not publicize country’s expenditures from oil money, however, and they are still left largely in the dark.  Azerbaijan’s oil earnings were also set up to imitate the Norwegian model, where the oil profits are put in a special fund which politicians are not allowed to touch, but this has not worked in Azerbaijan.

Aliyev has gotten quite wealthy from oil revenues, although he and his family have not publicized their net worth in defiance to Azerbaijani law (popular estimates say it is about $500 million).  Aliyev is keeping up a tradition started by his father of distributing wealth to his family.  His preteen son owns property in Dubai worth about $44 million and when including his daughters, his children all together own about $75 million worth of property.  Since public officials cannot hold businesses in Azerbaijan, Aliyev spreads ownership to his family members.  One of his daughters, for example, has a 29% stake in SOCAR. These are only some of the examples of the wealth snatched up by Aliyev’s family, wealth which could be used to fund public projects.

How much can United States foreign policy be blamed for this?  As mentioned above, the United States and its allies been recruiting Azerbaijan to diversify Europe’s energy supply.  While this was happening, Azerbaijan — and more specifically, Aliyev’s family — got rich, while indicators of democracy plummeted.  According to the former U.S. Ambassador to Azerbaijan and Brookings Insitution fellow, Richard Kauzlarich, “there is little the US can do to influence the process of democracy building through its minimal assistance program.”  He furthermore emphasizes that in order to ensure that Azerbaijan peacefully resolves the Nagorno-Karabakh issue (an issue dating back to the fall of the Soviet Union where the largely Armenian enclave fought a war to separate itself from Azerbaijan, while ethnically cleansing the region of Azeris), the United States “need[s] to cooperate with the regime however distasteful that is.”

Aliyev is furthermore very popular in Azerbaijan, with an approval rating of nearly 80%.  Much of this is due to his ability to use nationalist rhetoric with regards to Nagorno-Karabakh, an issue which many Azeris are still passionate about.  Aliyev furthermore provides a sense of economic stability where there are virtually no other alternatives available.  Indeed, of those polled, about 56% believed that the economic situation in Azerbaijan has improved in the past years. With a political system where the state is dominated by one family, it is hard for Azeris to give credit to anybody else but Aliyev.  While it may be true that October’s election results were fabricated, it is highly unlikely that Aliyev would have lost.

Nevertheless, Azerbaijan does see instances of dissent under Aliyev’s rule.  A notable example is the “donkey bloggers”, where some bloggers made a satirical video displaying that a donkey has more chances for success than an Azeri.  This was done after a report revealed that state funds had been used to import two donkeys each worth $41,000. Two weeks after the video was released, the creators were arrested, each receiving at least two years of jail.  Another prominent example of suppression is the case of Khadija Ismayilova who did investigative reporting for Radio Free Europe.  In order to intimidate her, videos and photos and her having sex with her boyfriend were released on the Internet, along with threatening messages.  The regime has thus made it clear that any expression of political dissent will not go unpunished.

Once the presidential election concluded, the United States State Department issued a statement condemning the state of repression in Azerbaijan: “Democracy is more than one election. The United States urges the Government of Azerbaijan to respect the freedoms of peaceful assembly, association, and speech.”  While it may be right for the United States to condemn Azerbaijan for its slide backwards from democracy, there is little it can actually do.  Indeed, Ambassador Kauzlarich says, “It is easy to look to outsiders to solve the problem of lack of democracy and human rights, but the reality is the regime will do neither and the outsiders are left to criticize bad behavior but have little influence.”