CAUCASUS BLOG: Azerbaijan’s future leaders cut from same cloth

CAUCASUS BLOG: Azerbaijan’s future leaders cut from same cloth
By bne IntelliNews December 1, 2015

Power is a family business in Azerbaijan, where wealthy but ageing oligarchs have held the reins of politics and business since the country achieved independence in 1991. A traditional patriarchal society, Azerbaijan over the last two decades has seen the formation of clusters of power that monopolise politics and entire sectors of the economy, in a system that US diplomats in leaked embassy cables have likened to feudalism in the Middle Ages.

Built around family lines, these clusters are centred around a ‘godfather’ figure, and include offspring, the spouse and the spouse's family. As the heads of these families enter their late 50s and 60s, a new generation is moving to replace them. But are the sons and daughters of the wealthy independent and experienced enough to take over the country? And, more importantly, will their presence bring any changes to this authoritarian and corrupt oil-rich country?

The Aliyev siblings

President Ilham Aliyev and first lady Mehriban Aliyeva have three children together: Leyla (30 years old), Arzu (28), and Heydar Jr (18). Ever since their father became president in 2003, the three presidential offspring have immersed themselves in business and public life, amassing so much valuable property it beggars belief that it is all the fruits of their own hard work. 

Leyla, the fetching and fashionable eldest daughter, is very much following in her mother's footsteps, in that she is the most public of all the siblings, is engaged in numerous private businesses and public activities, but maintains a distinguished and polished public presence.

Amassing an impressive portfolio of civil society activities funded with public money through the Heydar Aliyev Foundation, 30-year-old Leyla has managed to maintain her fashion icon image while having three children, starting and ending a marriage with singer Emin Alagarov, and dabbling in business, charity, environmentalism, diplomacy and international promotional activities. It’s an array of activities so vast it puts many a 30-year-old to shame.

Vice president of the Heydar Aliyev Foundation (her mother is president), the organisation that reportedly builds more schools in Azerbaijan than the education ministry and organises more cultural events than the culture ministry, Leyla is a woman with numerous interests. She pursued a master's degree at the Moscow State Institute of International Relations, but then moved to become the editor-in-chief of fashion magazine Baku, while supporting the disenfranchised in Azerbaijan through charitable work in schools and kindergartens, cultural events for struggling artists, support activities for persons with physical impairments, and, more recently, environmental awareness campaigns. The soft-spoken Leyla might not be heard speaking English in public frequently – though she is fluent in Russian – but her environmental activism earned her space in the Huffington Post

In addition to her charitable work, Leyla is also a hectic businesswoman. A series of Radio Free Europe/Radio Liberty (RFE/RL) investigations found Leyla and her sister Arzu are co-owners of numerous offshore companies, registered in places such as Panama and the British Virgin Islands that, in turn, co-own companies like Silkway Holding, which controls airport ground services in Azerbaijan; the Azerbaijan International Mineral Resources Operating Company (AIMROC), which controls a 70% stake in a gold mine worth $2.5bn; as well as Nar Mobile/Azerfon, the third largest telecommunications operator in Azerbaijan, which was reportedly granted preferential treatment by the administration over incumbent Azercell.

Her sister Arzu keeps a lower public profile, but her name appears more often in the registration documents for the offshore companies that own these businesses than Leyla's. Also a fashion icon, the younger presidential daughter has taken part in some activities that promote Azerbaijan abroad, such as this 2008 national branding campaign.

Meanwhile, teenager Heydar has had an appetite for expensive acquisitions ever since he was 11 years old, an age when most boys still play with toy cars. How he was able to afford purchasing $44mn worth of real estate in Dubai at the age of 11 remains a subject of much speculation.

While the Azeri government has refrained from commenting on the RFE/RL, Foreign Policy and Washington Post investigations into the wealth of the first family, Khadija Ismayilova, the journalist that carried out many of these investigations, was sentenced to seven and a half years in jail in September for libel, tax evasion, illegal business activities and abuse of power.

Anar Mammadov

For all of their foibles and dubious sources of wealth, the Aliyev siblings have always behaved themselves immaculately in public. The same can’t be said for Anar Mammadov, son of Transport Minister Ziya Mammadov and head of one of the largest conglomerates in Azerbaijan, Garant Holding.

Anar, who holds an MBA from the American Intercontinental University in London, claims to have launched Zqan Holding, Garant Holding's precursor, in 2000 when he was only 19 years old. Today, Garant and its partners virtually monopolise the transport sector in Azerbaijan, and receive large government contracts for bus and taxi services, construction and cargo transport. In addition to transport, Anar's business operations span international trade, gas production, banking, telecoms and hospitality in Azerbaijan, Turkey and the UK.

The young businessman is also active in lobbying for Azerbaijan abroad. Since founding the Azerbaijani American Alliance (AAA), Anar has managed to attract prominent American politicians to his group, such as Dan Burton, a former congressman from Indiana, who served as the alliance's chairman. AAA has also managed to gather a group of 60 US legislators to form an Azerbaijan Caucus within the House of Representatives, and paid for some of them to visit Azerbaijan in 2013.

Closer to home, Anar is better known as a fun-loving young man with extravagant tastes. One account that has circulated in Azerbaijan, which Anar denies, is that he paid a restaurant in the northern town of Gabala $1.2mn to slaughter an attraction bear and grill it for him and his friends. In another incident in 2010, Anar and his friends were reportedly so rowdy over dinner at the top-floor restaurant in Dubai’s Burj Khalifa skyscraper that they managed to get themselves deported, and the United Arab Emirates instituted a one-month-long ban on Azerbaijani men entering the country.

Tale Heydarov

Another 30-year-old son of a minister, Tale Heydarov is as enthusiastic about lobbying as Anar. The offspring of Kamaladdin Heydarov, the country's long-serving minister of emergency situations and former head of customs, Tale is the best educated among the children of Azerbaijan's elite. He graduated from the London School of Economics and, while there, founded The European Azerbaijan Society (TEAS), possibly the largest lobbying group for Azerbaijan abroad, which has chapters in London, Brussels, Paris, Berlin and Istanbul.

Unlike the children of other Azerbaijani oligarchs, the biracial Tale, whose mother is Korean, lives in London, but is still involved in his father's business operations, which include Gilan Holding, Qabala, Jala and United Enterprises International. In particular, Tale co-owns the latter together with his brother Nijat, and oversees business lines as disparate as caviar exports, which is a big business in Azerbaijan, and the Gabala Football Club, a multinational team assembled from countries in Africa, Latin America and Europe.

The northern town of Gabala (also spelled Qabala in Azerbaijani) where Heydarov Sr hails from is a hub for the family's business interests. Most large companies in the town, including a juice and canning factory, a piano factory, a theme park and several hotels that are part of the Qafqaz chain, which belongs to Gilan Holding, are owned by the Heydarovs.

But Tale's ultimate passion seems to be more in the realm of politics and foreign policy, as TEAS' agenda has closely followed Baku's foreign policy priorities, which include lobbying European institutions for support for the restitution of Azerbaijani territories currently under Armenian occupation.

According to Oliver Bullough, a London-based expert on the Caucasus, Tale is “urbane and educated, hangs out with Prince Harry, and puts a lot of money into trying to improve Azerbaijan’s image. He wants to promote it as a reliable energy partner, a country to do business with”.

Tale's schmoozing of European institutions and politicians reportedly helped the country climb its way to the chairmanship of the Council of Europe's Committee of Ministers in 2014 – a body that reportedly protects human rights in Europe, and that has been suspiciously mum about Azerbaijan's transgressions in the last two years. 

Eldar Abbasov

The son of former communications minister Ali Abbasov, Eldar's interests unsurprisingly mirror those of his father: technology and telecoms.

Like his father, who was well respected in Azerbaijan but became mired in the octopus of corruption in the Azerbaijani state apparatus and lost his job a few weeks ago, Eldar maintains a low public profile.

Eldar's company, venture capital firm Infipro, has been investing in technology start-ups since 2011. In addition, Eldar helped found the first e-payment service provider in Azerbaijan, Golden Pay/ in 2007, when he was only a university student.

Unlike many of his peers, Eldar's access to cash is not apparently limitless. For several years Golden Pay, which he has since sold, struggled to organise an IPO to raise what is pocket money by Azerbaijani oligarch standards, $1mn, and expand the services that offers its clients. Recently, the IPO, which would be a first in Azerbaijan, was again postponed.

That is not to say Eldar does not treat himself, or his wife of two years, to expensive gifts. A friend of the couple told this reporter that Eldar had to buy his new wife a Porsche when they were married in late 2013, because she refused to get in his previous car, a Volkswagen.

Rashad Abdullayev

The son of Rovnag Abdullayev, long-serving president of the national oil company Socar, 22-year old Rashad has recently come to public attention through his charitable activities aimed at supporting Azerbaijani students in Turkey.

Rashad was himself such a student, having arrived in Istanbul aged 17 to study chemical engineering at Koc University. An investigation by the Organised Crime and Corruption Reporting Project reveals that young Rashad owns several businesses in Turkey that are aligned with Socar, including a real estate company and a business consulting company. Furthermore, Rashad himself told an interviewer that he had held an unspecified position at Petkim, a giant petrochemical plant in Turkey in which Socar holds a 51% stake.

The same investigation revealed that Rashad's magnanimity towards Azerbaijani students in Turkey was actually funded by Socar, a public company, and that Rashad simply took credit for the stipends he generously handed out to his peers.

While the above are just a few of the most prominent offspring of Azerbaijan's oligarchs, their experience is by and large indicative of the direction that the country's other rich youth have adopted, which has been to follow in their parents' footsteps. While they have the power to change the country, these young businesspeople, entrepreneurs and lobbyists are more likely to perpetrate the same nepotistic system that they inherited from their parents, once the latter step down.