207 Azerbaijan

AZERBAIJAN: VULNERABLE STABILITY Europe Report N°207 – 3 September 2010 TABLE OF CONTENTS EXECUTIVE SUMMARY AND RECOMMENDATIONS ................................................. i I. INTRODUCTION ............................................................................................................. 1 II. POLITICAL PORTRAIT OF THE REGIME ............................................................... 2 A. CONSOLIDATION OF ILHAM ALIYEV’S POWER ............................................................................. 2 1. Formation of a leader ................................................................................................................... 2 2. From clan politics to bureaucratic-oligarchy ............................................................................... 2 3. A one-man show .......................................................................................................................... 4 B. SEARCH FOR AN “AZERBAIJANI MODEL” ..................................................................................... 5 1. Cult of personality ........................................................................................................................ 5 2. Statist authoritarianism ................................................................................................................ 6 III. RELATIONS WITHIN THE RULING ELITE ............................................................. 7 A. POWER BALANCE WITHIN THE SYSTEM ....................................................................................... 7 B. MAJOR PLAYERS AND GROUPINGS ............................................................................................... 8 1. Ramiz Mehdiyev and his “old guard” .......................................................................................... 8 2. The “oligarchs” ............................................................................................................................ 8 3. The “Family” ............................................................................................................................... 9 IV. CONTROL OVER PUBLIC LIFE ................................................................................ 11 A. CORRUPTION AS A PILLAR OF CONTROL ..................................................................................... 11 B. POLITICAL OPPOSITION .............................................................................................................. 12 1. Narrowing margins for political activism .................................................................................. 12 2. A divided force .......................................................................................................................... 13 C. MEDIA ....................................................................................................................................... 14 1. Self-censorship ........................................................................................................................... 14 2. Restricting public outreach ........................................................................................................ 15 D. CIVIL SOCIETY ........................................................................................................................... 17 1. Increasing control over NGOs ................................................................................................... 17 2. Youth groups and online activism ............................................................................................. 18 E. RELIGION ................................................................................................................................... 19 V. ANY CHANCE FOR REFORM? .................................................................................. 20 A. EVOLUTIONARY CHANGE VS. SYSTEMIC FAILURE ...................................................................... 20 B. LACK OF INTERNATIONAL LEVERAGE ........................................................................................ 21 C. GRADUAL LIBERALISATION OF THE SYSTEM .............................................................................. 22 VI. CONCLUSION ................................................................................................................ 23 APPENDICES A. MAP OF AZERBAIJAN ....................................................................................................................... 24 Europe Report N°207 3 September 2010 AZERBAIJAN: VULNERABLE STABILITY EXECUTIVE SUMMARY AND RECOMMENDATIONS Ilham Aliyev’s presidency has been marked by stabilisa- Oil revenues have further entrenched a stagnant political tion of the political life of the country and economic system, making it even more resistant to reforms. But growth driven by oil exports. This stability, however, has the oil revenues are levelling off and are projected to come with the consolidation of authoritarian rule, greater gradually decline within a few years, which could lead to suppression of freedoms and an increased reliance by el- economic problems and growing public frustration. The ites on corruption and patronage networks to dominate closed political system prevents meaningful debate on virtually all aspects of public life. With a marginalised Azerbaijan’s long-term challenges and stimulates a sense and demoralised opposition, little independent media and of apathy and distrust. To protect state stability, a start on rent-seeking elites who have vested interests in the pres- economic and political reform is essential. ervation of his power, Ilham Aliyev has a level of control over society that his father never possessed. The interna- The continuation of “business as usual” runs the risk that tional community has little leverage with which to pres- Azerbaijan could squander an historic opportunity to use sure the regime, but it should do more to persuade the its energy resources to build a more durable state system leadership to see that even its own self-interests lie in and a prosperous nation. The growing over-reliance on gradual but genuine liberalisation. the energy sector, discrepancies in wealth distribution and public disenchantment with both the government The government has developed effective methods for and traditional opposition parties increase the likelihood keeping political forces, non-partisan civil groups, media, of a surge in radicalism and instability in the medium to religious communities and independent business alike long term. It is in the regime’s own interest to open up from becoming self-sustainable challengers. It appears to political space, take steps to rein in corruption and de- have deliberately promoted a sense of impunity so as to monopolise the economy, while it still stands on solid ingrain self-censorship in the public and discourage any financial and political ground. Azerbaijan has already unsanctioned collective action. Due to restrictive readings reached the peak of its oil-driven GDP growth rates, of the existing laws, it denies the right to freedom of which ran as high as 35 per cent in 2006 but are expected assembly. Opposition demonstrations are regularly pre- to slow to about 3 per cent in 2010 and 0.6 per cent in vented and sometimes violently broken up. Civil activists 2011. If the authorities further delay reform, they may often find themselves at the mercy of local authorities and lose the ability to control future developments and meet are occasionally denied the right to hold activities outside growing public expectations. of the capital. The denial of registration for NGOs and religious communities has been used as a tool to restrict President Aliyev could reinforce both his domestic and their activities. Mosques have also been shut down by international credentials by embracing deeper structural the government on questionable grounds, raising the change. Genuine steps towards reform could also engen- spectre of pushing them underground and stoking radical der a more sympathetic attitude from the international tendencies. community towards his most important policy problem, the conflict with Armenia over Nagorno-Karabakh. In the Although President Aliyev exerts firm control over the meantime, continued backsliding on human rights, in- government, he is not all-powerful. He depends on the cluding politically motivated arrests and the persecution elite to preserve his power, and unless a direct challenge of government opponents, casts a shadow over Azerbai- is involved, he is not interested in revising the delicate jan’s relations with important allies. International actors balances within the system by removing powerful subor- need to impress on the leadership that they run counter to dinates, even if he is unsatisfied with performance. As a both the country’s international commitments and the result, domestic politics are shaped less by unequal oppo- government’s own interests. sition-government contests than by internal dynamics and occasional power struggles within the ruling elite. Azerbaijan: Vulnerable Stability Crisis Group Europe Report N°207, 3 September 2010 Page ii RECOMMENDATIONS 8. Establish a sustainable and diversified market-based economy by: To the Government of Azerbaijan: a) limiting the size of transfers from the State Oil Fund to the state budget so as to ensure fiscal sus- 1. Allow citizens true freedom of assembly, including tainability; and the right to stage public demonstrations in city cen- tres

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