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Democracy in the South Caucasus

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Democracy in the South Caucasus No. 2 15 January 2009 Abkhazia South Ossetia caucasus Adjara analytical digest Nagorno- Karabakh www.jeffersoninst.org www.laender-analysen.de www.res.ethz.ch www.boell.ge Democracy in the South caucaSuS ■ ANALYSIS Oil Wealth, Patrimonialism, and the Failure of Democracy in Azerbaijan 2 By Farid Guliyev, Bremen ■ OPINION PoLLS Trust in Institutions of State and Society in the Countries of the South Caucasus 6 ■ DOCUMENTATION Interest in Politics and Civic Engagement in the Countries of the South Caucasus 7 ■ OPINION Lost in Democratization and Modernization: What Next in Georgia? 9 By David Aprasidze, Tbilisi ■ OPINION PoLLS Attitude of the Georgian Population towards Politics 12 ■ CHRONICLE From 16 December 2008 to 13 January 2009 15 Jefferson Research Centre for East Center for Security HEinRich Böll STifTung DGO European Studies, Bremen Institute Studies, ETH Zurich SouTH CauCaSuS caucasus analytical caucasus analytical digest 02/09 digest analysis Oil Wealth, Patrimonialism, and the Failure of Democracy in Azerbaijan By Farid Guliyev, Bremen Abstract Azerbaijan’s democratization attempts failed, not least because for those in power, control over the political process was essential in order to gain and maintain control over the country’s petroleum riches. Organiza- tion of power along patrimonial lines defines the system that Azerbaijan’s late president Heydar Aliyev cre- ated during his long rule and which his son, Ilham Aliyev, continued. This system distributes rents from oil exports through a patronage network in order to ensure the support of allies and various clientelist groups. The high oil-price environment of 2003–2008 brought an enormous increase in revenues from oil exports. Since about 2005–06, the government did not even care to maintain the façade of democracy as it did dur- ing the 1990s. The drop in oil prices will probably make the government pursue a more careful policy, but political change is unlikely as long as the system remains based on sharing the spoils from oil exports and keeping the public marginalized and powerless. An Authoritarian and Corrupt Regime support and loyalty. More visibly, political clientelism On December 30, 2008, Azerbaijani authorities turned manifests itself in the wide-reaching spread of graft and off BBC, Radio Liberty and Voice of America broadcast- rent-seeking. In fact, Azerbaijan figures today among the ing services, effectively denying their citizens access to most corrupt countries of the world: Transparency Inter- independent sources of information and the few remain- national’s 2008 Corruption Perception Index ranked ing venues of debate on issues of public concern. Only a Azerbaijan 158th among 180 countries. The country few days earlier, on December 26, the majority of Azer- appears in the same group as Burundi, the Republic of baijani parliament members called for a referendum, set Congo, Sierra Leone and Angola. to be held on 18 March 2009, to amend the country’s If in the 1990s the form of government in Azerbai- constitution from 1995. The proposed constitutional jan was duly described as semi-authoritarian, i.e. neither reform would abolish the rule that the same person can- democratic nor outright authoritarian, by the early 2000s not be re-elected as president after serving two terms in the regime moved in the authoritarian direction. In fact, office. If adopted, this amendment would enable incum- democracy never took root in Azerbaijan. Azerbaijan falls bent Ilham Aliyev to run for a third term after his second into a group of countries from the southern belt of the term expires in 2013; and then to remain president for former USSR, which after 1991 did not see a movement an indefinite period of time. Aliyev, now 47, was elected towards democracy and freedom as in the Baltic States, president in 2003 for a five-year term, succeeding his but the rise of repressive regimes and odious dictators (the ailing father Heydar Aliyev. In the controversial Octo- most notorious example being the late president of Turk- ber 2008 election, which the main opposition Azadliq menistan, Saparmurat Niyazov) or the establishment of (Freedom) party bloc boycotted, he won a landslide 89 hybrid regimes which blend democratic and non-demo- percent of the vote, a slight gain compared to his 76.8 cratic features (such as the one in Armenia). percent showing in 2003. It thus comes as little surprise that Azerbaijan does The latest attacks on democracy and free media are not fare well in international rankings on democracy and not surprising; in effect, they mark the culmination of press freedom: The Polity project which provides an inde- nearly 15 years devoted to forming an authoritarian polit- pendent assessment of authority trends in all indepen- ical regime whose entire support mechanism rests on the dent states has kept Azerbaijan’s score at “-7” since 1998 availability of energy resources and the division of spoils (after Heydar Aliyev’s re-election for a second term) on from the export of petroleum. Petroleum revenues pro- a 21-point scale ranging from “-10” (hereditary monar- vide the vital resource to be exchanged through the web chy) to “+10” (consolidated democracy). On the Report- of patron-client relationships spanning the patrimonial ers Without Borders’ annual Press Freedom Index, in system of authority, which is tantamount to a “personal 2008 Azerbaijan ranked 150 out of 173 countries. IR EX, fiefdom” of the ruler. The state works along clientelistic another media audit organization, in its 2008 Media Sus- lines: the governing elite (patron) supplies benefits and tainability Index assigned a score of 1.84 to Azerbaijan favors to its supporters (clients) in exchange for political on a scale from “0” representing unsustainable, anti-free 2 caucasus analytical caucasus analytical digest 02/09 digest press to “4” representing free and sustainable media. The civil society) effect: oil revenues provide an authoritar- ban on foreign broadcasts starting January 2009 com- ian state with resources to prevent independent social pletes the tide of restrictions on free media. groups from forming. Fourth, an overabundance of oil revenues stimulates greater repression as it allows the oil- Oil and Democracy abundant state to spend excessively on the armed forces, There are multiple reasons for the failure to democratize, police and security agencies that can be used to silence but a country’s abundance in natural resources tends to pro-democracy forces. As a result, the state demobilizes hinder the establishment of democracy and freedom. society and deprives it of the ability and means to coun- Political scientists, notably Terry Lynn Karl and Michael terbalance state policy. L. Ross, write widely about the “resource curse,” identi- fying several negative effects of a country’s dependence Towards the Formation of a Petro-State on a single resource, especially petroleum. In countries At the time of Azerbaijan’s independence from the Soviet afflicted with the curse, natural resources are regarded Union, the political leaders knew full-well that the only as the only chance to develop. The state is thus eager to viable option to quickly restore a shattered economy was control the oil and gas industry via a national monop- to revitalize the petroleum industry, which declined olist, such as a state oil company. With the influx of during the late Soviet period. Petroleum shaped much foreign capital into the enlarged public sector of the of the modern history of this country, which was home economy, the state grows and becomes stronger (in its to the world’s first drilled oil well in 1848 near Baku, capacities), whereas private businesses largely depend then part of the Russian Empire. By the early 20th cen- on government contracts, which are usually distributed tury, Azerbaijan produced almost half of the world’s oil. to regime collaborators in return for political support After a short-lived independence in 1918–1920, Azerbai- or loyalty. Crony capitalism, understood as the system jan was incorporated into the Soviet Union to serve as in which members of the government distribute eco- a hydrocarbon supplier for the Soviet economy. In the nomic favors to their personal connections, thus flour- early 1990s the Azerbaijani Popular Front-led national ishes. This system allows the oil-rich government to con- independence movement took an anti-Russian position trol the rest of the economy and to gain autonomy from and sought sovereignty over its resources. Yet, a shortage the public by implementing its decisions without rely- of capital and the lack of modern technologies to extract ing on public taxes. technologically-complicated offshore reserves prevented Since petroleum-rich countries are located mainly in Azerbaijan from developing its resources independently the developing world where weak political institutions and forced Heydar Aliyev’s government to attract for- prevail, they must usually build their political systems eign investments into its oil industry. at the same time as they develop the petroleum industry, The desire to stay in office provided another motive with the industry exerting a negative effect on the institu- for securing foreign investments. Typically, the leaders tions. In conditions with few restraints, high petroleum of oil-abundant states use their mineral riches to prolong income creates an incentive structure for the political their tenure as chief executive. After years of political tur- and economic elites to grab their part of the oil revenue moil and the military defeats against Armenian-backed “pie.” Hence, petroleum revenues foster rent-seeking and Nagorno-Karabakh forces, Azerbaijan’s first president, corruption, and undermine the development of demo- Abulfez Elchibey, resigned under pressure after only one cratic institutions and free market structures. year in office in 1993. Heydar Aliyev won election to Moreover, oil inhibits democratic transition and the president’s office in his place. Aliyev, who ran the helps authoritarian rulers survive through various mech- country for much of the late Soviet time – first as First anisms.
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