Azerbaijani politics in the time of crisis: same old story

Azerbaijani politics in the time of crisis: same old story
Ilham Aliyev in Russia in 2015. Photo by Kremlin/CC
By bne IntelliNews February 2, 2016

This article is part of a series looking at the impact of the fall in oil prices on the region's biggest oil producers. The other articles in the series are on Russia and Kazakhstan.

Declining living standards amid an economic crisis has led to the toppling of many an authoritarian regime in recent years. But despite suffering from these problems, the oil-rich autocracy of Azerbaijan is still far from revolution. Decades of dictatorship alongside a populist government and a weak opposition should ensure the status quo until oil prices bounce back and, with them, the economy.

During his 12-year rule, President Ilham Aliyev has governed using a combination of populism and control, which worked when the authorities could milk an oil-fuelled bonanza and afford to throw money at the electorate to quell discontent over human rights abuses and corruption. But the steep decline in oil prices over the last 18 months has lifted the curtain on the Aliyev administration's lack of progress on making crucial reforms like economic diversification, rural development, employment and tackling corruption.

With funds dwindling in its coffers and scrambling to find new sources of financing, the authorities are finding it harder to appease people and stifle criticism. But it will continue to monopolise power and ensure that no void emerges that could be used by other groups to undermine it; the only opponents it will face are the established and unpopular parties like the Musavat party and the Popular Front.

As for the economy, instead of developing and implementing a strategic anti-crisis reform programme, Baku will continue to deliver piecemeal, populist changes, experts believe.

Let-down leads to crackdown

Azerbaijani politics has been locked in a downward spiral ever since the late president Heydar Aliyev took power in a 1993 coup d'etat from predecessor Abdulfaz Elchibey, who had failed to steer the new country on the path to peace and prosperity.

The charismatic and popular former Politburo member Aliyev Snr consolidated his power by putting an end to the armed conflict with Armenia over the breakaway region of Nagorno-Karabakh, and by signing independent Azerbaijan's first production sharing agreement (PSA) with the oil major BP.

As his YAP party grew in strength, other political factions active during the first years of the country's independence from the Soviet Union, such as the Popular Front, Musavat and the Democratic Party, were pushed to the margins. Elections became a sham, seats in parliament sold to government-friendly independents, and limitations on democratic freedoms became a disincentive for people to join the opposition ranks. Discussing politics became taboo, and those who criticised the government were promptly accused of trouble-making and partisanship.

Fast-forward 22 years and Azerbaijani politics has arguably changed for the worse. On his death in 2003, Aliyev Snr was replaced by his less charismatic, more Western friendly but also nervier son Ilham. If Aliyev Snr relished his strong grassroots support, visiting villages and shaking hands with people, Aliyev Jnr has closed the circle of power, locked himself and his family in a new palace guarded by heavy security, and has the streets of Baku cleared of traffic every time his long convoy passes through. If Aliyev Snr allowed some criticism because he knew that he ultimately had strong public support, Aliyev Jnr has cracked down on dissent, and discredited, jailed, tortured, and even killed any domestic or foreign institution or individual that criticises him, his family or his government. The roster of his administration's known human rights violations in 2015 alone is shocking.

Ilham Aliyev has tried hard to ingratiate himself with the international community, and to use that support to enhance his credibility at home. He has courted international organisations like Eurovision, Formula One, the EU, the Council of Europe, the Organisation for Islamic Cooperation and the European Olympic Committee. His government has wooed politicians from the US, the UK, members of the Council of Europe and other international organisations with all-expenses-paid, lavish trips to Baku. The Heydar Aliyev Foundation, a charitable organisation headed by his wife, First Lady Mehriban Aliyeva, has made generous donations for cultural restoration and community projects in countries like France, Romania and Pakistan.

But his efforts have largely proved to be in vain, with voices critical of the administration's poor human rights record growing louder by the day. A perfectionist, Aliyev sought across-the-board international approval, failing to distinguish between the foreign media, non-governmental organisations (NGOs) and foreign governments, and failed to understand how it could sign agreements with a government and then be criticised by the media of that same country. An increasingly belligerent Baku took the critical voices to mean that someone was organising a smear campaign against it. Tensions peaked when the administration's greatest – and priciest – PR effort to date, last year’s inaugural European Games, a brainchild of President Aliyev himself intended to showcase the glory of Azerbaijan to the rest of the world, accomplished the exact opposite. European leaders snubbed the opening ceremony in June, their countries sending second-class athletes to participate in some of the most important sports like swimming and athletics, and international media like The Guardian ran daily columns criticising the regime.

If until June 2015 the Aliyev administration had tried to maintain a semblance of democracy for the sake of the country's international image, the European Games let-down put an end to its attempts to impress foreigners. With nothing left to prove, its reputation in tatters and billions of dollars wasted on the event, the government began to fire back at international and domestic criticism. As journalists, NGO workers, opposition politicians and their families were being thrown in jail, the government-friendly media began running daily headlines about a Western conspiracy against Azerbaijan, the Occident's hatred of Azerbaijan because it is a Muslim country, the lack of Western support for Azerbaijan in its ongoing struggle to recover Nagorno-Karabakh, and the double standards the West has employed in its dealings with Azerbaijan versus Ukraine, whose territorial integrity has received more support than Azerbaijan's.

But this belligerent stance is being undermined by Azerbaijan's fragile and oil-dependent economy, in which hydrocarbons account for 90% of exports, a third of GDP and some 70% of the government budget. A double devaluation of the manat in 2015 sent food prices skyrocketing – Azerbaijan is a net importer of food – and the banking sector spiralling into its worst ever crisis, prompting residents of a dozen or so districts to take to the streets to protest against rising unemployment and prices. The year has just begun, yet Baku is already being forced to reach out to international financial institutions (IFIs). 

“The January protests in Azerbaijan were a spontaneous, emotional reaction to the worsening economic situation,” Arastun Orujlu of the Baku-based East West Research Centre tells bne IntelliNews. “With one exception, the protests were not organised by any specific group. But the government, the Prosecutor General's Office, the minister of interior and later President Aliyev himself blamed the Musavat and Popular Front parties for organising them, because the government understands that these parties are not popular in Azerbaijan. Blaming the protests on the opposition instead of the economy distracts the public’s attention from the real cause of the protests.”

New political forces frequently emerge in times of economic crises, Orujlu contends, and Baku understands that, which is why it is working to limit the opposition to those opponents that it and the public are already familiar with, which lack enough support to pose a serious challenge to YAP. Azerbaijanis largely perceive Musavat and the Popular Front as amateurish, visionless and ineffective opponents to YAP.

Case in point, Orujlu relates, is Musavat’s recent decision to put out an anti-crisis programme that called for the cessation of oil production and exports if oil prices continue to fall. “[This] indicates an utter ignorance about how oil production and the economy work,” he says. “The economy was never a priority for the ruling or opposition parties in Azerbaijan, and that is why the country is now experiencing an economic crisis.”

Fragile new opposition groups, like the Movement for Democratic Reform, have made some attempts to devise anti-crisis programmes, but they lack political influence and the government has largely ignored them, as has the general public.

Populist policies

Meanwhile, Baku appears to have scrapped earlier plans for a $5bn reform programme that would have resulted in government job cuts, opting instead for the tried-and-tested twin strategies of repression and targeted social spending and subsidies in reaction to the January protests. “This has worked moderately well in the past, due in part to the state's heavy handedness, but also because despite severe inequality and corruption, many Azerbaijanis’ quality of life has gone up in the past decade or so,” says Michael Cecire of the Foreign Policy Research Institute.

However, he points out that the energy bonanza is long over, “and the state does not have the money to sustain high levels of social spending without significant, game-changing reforms.”

Despite the looming expiration date on its populist policies, the government has yet to devise another way to deal with the economic problems. "I do not think that there is enough political will for reforms, because the government understands that those would be unpopular in the short term and could lead to more social unrest,” Orujlu believes, while stressing that an administration riddled with corruption will never be serious about undertaking true reforms.

The European Games failure was a blow to Aliyev's legitimacy, and the current economic crisis is only adding to that. The best way for the current president to build his credibility to the levels of his father's remains the hardest to accomplish: regaining Azerbaijan's occupied territories from Armenia, say analysts. But that is a far-fetched scenario, despite years of building up its military.

In the short term, declining standards of living will continue to generate social unrest over the next two months, Orujlu predicts, because utilities and food prices are higher during the winter months, and the celebration of the Persian New Year Novruz at the end of March is always a costly endeavour for Azerbaijani families.

Regardless, conditions are still not ripe for an Azerbaijani “colour revolution” like those seen in Georgia and Ukraine, Cecire says. “Without a defined and obvious opposition locus, the situation would have to escalate rapidly and quite specifically for there to be any sort of sustained, much less successful colour revolution-type of scenario," he concludes.