All but invisible to the wider world, a crisis is developing within
Azerbaijan…

The St. Petersburg Times (Russia)
27 September 2005
Issue 74

All but invisible to the wider world, a crisis is developing within
Azerbaijan that could threaten regional stability and the future
development of Caspian basin oil and gas.

Though largely self-created, by a combination of endemic corruption
and institutional underdevelopment, the emerging calamity is being
greatly aided by opportunistic measures by others, including Russia,
the United States and especially Iran.

In many ways, this is developing into a 21st-century version of the
Great Game Î that epochal struggle between the British and Russian
empires, which dominated the lives of all sorts of tiny Eurasian
countries throughout the 19th century and well into the 20th century.

But Azerbaijan is not Afghanistan, which has had the misfortune of
historically always having been someone elseÊs buffer state or
strategic beachhead.

Azerbaijan is a prize in its own right. It can claim one-fifth of the
oil and gas of the Caspian Basin, one of the worldÊs last great pools
of hydrocarbon wealth. Led by BP, the Baku-Tblisi-Ceyhan pipeline has
just opened, creating a new gateway to world markets for Azeri
oil. With gross national product growth increasing at about 11 percent
annually, this should be the most economically successful of the
former Soviet states. Should be, and in some ways is Î but not in
nearly enough ways to make Azerbaijan the happy and stable place it
ought to be.

Instead, it is a place that is starting to come unglued. Run until
recently by an authoritarian, but politically astute, former KGB
general named Heidar Aliyev, Azerbaijan is now run by a fractious
group of his ministers, ruling in the name of HeidarÊs son, Ilham.

Ilham Aliyev is an intelligent, quite well-educated man of 44 whose
instincts do not appear to run to strong-arm tactics or
dictatorship. But he is surrounded by ministers and minders for whom
there is much to lose in the event of a regime change. Billions of
dollars, in fact.

This is because Azerbaijan, under the elder Aliyev, functioned as a
giant franchising operation, with nearly all aspects of Azeri national
life hived off as vertically integrated businesses. If you want to
pass a university exam, you pay the instructor $50, a large part of
which he pays to his supervisor, who then pays part to his superior,
and so on all the way to the top. To be named police chief in a
medium-sized town costs about $10,000, most of which winds up with
whoeverÊs signature is required for such an appointment.

This was a relatively stable and predictable situation under Heidar
Aliyev, because he was imaginative enough to control its excesses and
tough enough to be able to do so.

There is room to doubt that Ilham Aliyev has that kind of
authority. He has in fact replaced few of his fatherÊs lieutenants and
has remarkably few allies of his own in government from his own
generation or cohort. Increasingly, he appears to be more dependent on
his fatherÊs aging cronies than they are on him.

Apart from the personalities at the top, the world around them has
changed utterly. Part of the change occurred in the streets of
Tbilisi, in neighboring Georgia, where just a month before Heidar
AliyevÊs death in 2003, the Rose Revolution replaced another former
KGB chieftainÊs regime.

Understandably, a lot of people have been sticking colored pins in
their wall maps of the former Soviet Union ever since, trying to guess
in which state the next so-called color revolution might happen:
Tbilisi, Kiev, Bishkek Î and now Baku? With parliamentary elections
set for Nov. 6, the Azeri opposition parties are playing up that trend
for all it is worth. But many of the opposition leaders in Azerbaijan
are every bit as corrupt and as much a part of the old guard as the
men they wish to replace. Many were involved in an ill-fated 1992-93
government, almost universally condemned for chaos, corruption and
incompetence.

But the color revolutions have had an important influence, if not
domestically then externally.

For one thing, they have made it more difficult for Russia, still the
leading power in the region, and the United States, the remaining
world superpower, to collaborate, even when it is practical to do so.

The United States now faces a dilemma in dealing with the former
Soviet states with which it is friendly, including Azerbaijan. For
commercial and geopolitical reasons, Washington would obviously prefer
stability over chaos. But it can also no longer afford to be seen to
be propping up an unreformable kleptocracy.

Meanwhile, Moscow also would prefer stability instead of another
revolution in its own backyard.

For both, there are other complications. Iran, along the southern
Azeri border, is chief among them. There are 20 million to 25 million
ethnic Azeris in Iran, and the dominant religion in both nations is
Shiite Islam. Fundamentalism has started to surface in AzerbaijanÊs
border areas, and there are reports that some theological schools
across the country are leaning toward Iranian-style militancy. In an
otherwise secular state, these are disturbing developments.

This must be disturbing Washington too. Rumors abound that it is
looking to redeploy military contingents from Uzbekistan, which has
asked the U.S. Army to vacate a military base there, to Azerbaijan,
including to one site close to the Iranian border.

Rumors also abound that Russia is redeploying troops formerly based in
Georgia to regions of Armenia that border Azerbaijan. Apart from the
historic enmity between Armenia and Azerbaijan over the disputed
territory of Nagorno-Karabakh, such movements could redraw the
military map of the entire region.

But is a U.S.-Russian rivalry in the area inevitable? The truth is
that Moscow and Washington have more interests in common than they
have in conflict, particularly with respect to Iran, which is a source
of even bigger worry to Russia than to the United States.

Intriguingly, in recent weeks, some members of the Russian media have
been playing up the disruptive influences in Azerbaijan of Wahhabi
militants. But Wahhabism is used as a catch-all term for all forms of
radical Islam, whether Sunni or Shiite.

There may well be some Wahhabi activists in Azerbaijan, especially in
the north, where Chechen and Dagestani refugees have settled. But the
real fundamentalist threat is overwhelmingly from the south, from
Iran. The Kremlin certainly knows this, but, for complex and
remarkably narrow commercial reasons Î the sale of nuclear reactor
technology Î it cannot bring itself to say so publicly.

And that, almost literally, is what is keeping Russia and the United
States from collaborating in Azerbaijan. In nearly all other matters
of consequence, their interests in Azerbaijan coincide: stability,
moderate reform, and even curbing corruption Î since even Russian
companies like LUKoil must be finding the spiraling cost of graft hard
to manage.

There does not need to be a color revolution in Azerbaijan. There does
need to be fundamental change, bringing new young modernizers into
power and giving the rising middle class its say in the countryÊs
future.

But with Moscow eyeing the Americans with suspicion, and Washington
unable to rely on the Russians while facing Iran, Azerbaijan appears
headed unstoppably toward a less-than-promising future.

Ednan Agayev, an Azeri-born former senior Russian diplomat and
executive vice president of the Russian-American Business Council,
contributed this comment to The St. Petersburg Times.