CANADA MISSES AZERBAIJAN BUSINESS BOAT
By Scott Taylor – Business Edge
Business Edge, Canada
Aug. 17, 2006
But opportunities still abound for entrepreneurs, adventurers
Since its independence was granted from the former Soviet Union in
1991, Azerbaijan has set its sights on increasing connections with
the West and divesting itself of the country’s former communist
infrastructure.
The development of lucrative new oil resources in the Caspian Sea
in conjunction with British Petroleum has helped fund that process,
but a tentative war with Armenia, domestic political instability and
rampant corruption have proven to be major speed bumps on the road
to cultural transition.
However, Azerbaijan is now enjoying an oil-fuelled economic boom
and is looking to do more business with the West, but is failing to
attract interest from Canada.
"It is regrettable that we have achieved the lowest of co-operation
from Canada among all of the world’s developed nations," says Novruz
Mammadov, special adviser to President Ilham Aliyev. "It is frustrating
for us when we see so little interest (on the part of the Canadian
government) in something which holds so much potential."
Photo by Scott Taylor, for Business Edge Baku is the scene of a massive
construction boom Canada is alone among the G-8 nations to have no
diplomatic representation in Baku, and the nearest consular-visa
functions are conducted either in Ankara, Turkey, or Moscow.
"In the 15 years since independence, Canada has sent just two official
delegations to visit our country," says Mammadov. "One from your
foreign ministry in 2005 and some members of Parliament back in 2003."
The Azeris, on the other hand, maintain a full embassy in Ottawa and
are keen to encourage Canadian trade. After years of Soviet communism
and post-collapse instability, the Azerbaijan infrastructure is in
need of just about every commodity conceivable. Add to this the vast
oil revenue and continuing development in the region and the Azeri
government is in a cash-rich position to acquire its needs.
"You have to remember that we are starting from absolute zero –
we need just about everything," says Mammadov. "There are still
tremendous opportunities for international companies in the energy
field, telecommunications, diamonds, agricultures, electronics –
the list is endless. And we have the revenue to pay for it."
Rodney Moore, a spokesman for Foreign Affairs and International
Trade Canada, says: "Since Azerbaijan gained its independence from
the Soviet Union in 1991, Canada did not recognize the necessity
of opening an embassy there, given the level of relations between
the two countries and the amount of available resources within the
ministry of Foreign Affairs."
Kirk Purdy, president of Sword Energy Ltd., a private oil and gas
company located in Calgary, says: "Canada’s lack of participation
in the development of Azerbaijan’s energy industry will be costly,
both in opportunity and gross national product. We are a world
leader in energy-related extraction and processing technologies
and it’s unfortunate that we don’t have the support of our Canadian
government to share these skills with Azerbaijan’s industrial and
political community."
Others, meanwhile, are taking advantage of business opportunities
in Azerbaijan.
"It’s getting too bloody soft around here for my liking," says Terry,
a 46-year-old ex-British paratrooper who now runs a bar in Baku, and
who did not want to give his last name. "It used to be the case that
the sight of a foreigner in Azerbaijan was so rare that the locals
would stop and gawk at you when you walked down the street."
Missing a front tooth and sporting a shaved head, the barrel-chested
combat veteran with a gap-toothed smile and tattooed muscular arms
would likely still create a stir in most civil societies. However,
over the past decade the renewed oil boom has brought an entire cast of
such characters into this previously isolated former Soviet Republic.
In 1994 the newly independent Azerbaijani government signed what was
termed the "deal of the century" with a number of Western companies to
develop and export the vast untapped offshore oil and gas reserves in
the Caspian Sea. British Petroleum is the key player in this region,
having already had established pipelines through Kazakhstan.
Photo by Scott Taylor, for Business Edge The wearing of the traditional
hijab The experience gained in its North Sea oil projects has given BP
a tremendous advantage in the international race to develop the Caspian
Sea reserves. As a result, Azerbaijan has kept well ahead of the
other four nations that share a border on this newly discovered wealth.
"The Russians, Iranians, Kazakhs and Turkmen have no idea how much oil
we are already pumping through (BP’s) oil rigs," explained Terry, who
spent 10 years in the region as a BP employee before opening his pub,
The Garage, which caters strictly to foreign oil workers. "Our gap
on the competition in terms of technology would need to be measured
in light years."
The outer-space analogy is an apt one, as a patron in The Garage
describes the ex-pat bars in Baku as being similar to the intergalactic
nightclubs depicted in the Star Wars movies, "only instead of strange
individuals from foreign planets, they are bizarre representations
from across the globe."
The original bars and clubs were deliberately rough around the edges
to appeal to the mostly ex-military types who blazed the trail through
this heretofore non-westernized territory.
However, as the boom in the Azerbaijan economy – 25-per-cent growth
last year in GDP alone – spreads into sectors outside the oil industry,
the hospitality business has begun to cater to a much greater variety
of foreign tastes.
"First it was McDonalds, then a whole bunch of fancy restaurants,
and now we’ve even got expensive wine bars," bemoaned The Garage owner.
"Baku will never be the same."
This recent wave of change will not be the first time that outside
forces have left an indelible imprint on Azeri society and culture.
As descendants of central Asian Turkic tribes, the Azeris are
essentially Muslim Turkmen.
However, in 1920, the Russian Bolsheviks occupied the oil-rich
territory of the present Republic of Azerbaijan. The subsequent seven
decades of communism and Russian influence drastically diminished
the religious Islamic influence in this region.
Throughout my weeklong visit, I spotted just one Azeri woman wearing a
traditional hijab, while the vast majority dressed in Western-style,
MTV-inspired fashions. Although minarets and mosques still dot the
cityscape, unlike non-secular Islamic nations, the call to prayers
is not broadcast via loudspeakers five times a day.
In terms of architecture, the capital Baku is a bipolar hybrid of
Turkish ornate and Soviet bland, while on the extreme ends of the
spectrum there remains the presence of the ancient walled city and
an ever increasing number of modern glass and steel skyscrapers.
Culturally, the long period of Soviet control has left a continuing
legacy of authoritarianism ingrained in the public mindset.
Journalists are still escorted about the city by official handlers
wearing dark suits and driving old black Volga automobiles – once
considered a "Mercedes equivalent" in the Soviet Union.
On the plus side, many of the hosted luncheons were capped off by
the Russian tradition of exchanging elaborate toasts with over-proof
vodka. Certainly not something one would expect from a member nation
of the Organization of the Islamic Conference.
On the other hand, the Azeris align themselves closely with their
‘brothers’ in Turkey. Not only do they share a similar (albeit
distinct) dialect with the Turks, they also share an affinity to
recognize a ‘father figure’ for their newly founded nation.
Whereas the Turks have enshrined Mustafa Kemal Ataturk as the founder
of modern Turkey, in Azerbaijan it is Heydar Aliyev (the first
president at the time of independence) who carries this torch. Since
his death in 2003 Aliyev has been commemorated extensively throughout
the country.
>>From the time one arrives at Heydar Aliyev International Airport
his image can be seen on billboards and statues all across the country.
In government offices, one is more likely to see a portrait of Heydar
Aliyev than of his son Ilham who is the current president.
The impact of the sudden economic boom in Azerbaijan is clearly
illustrated by the fact that two separate currencies are in
circulation. The worn-out dirty old Manats are valued at 4,800 to
a single U.S. dollar, while the crisp new (Yeni) Manat trade in at
about $1.20 US each.
One of the initial drawbacks to foreign investment and trade
partnerships is that in the immediate post-Soviet climate, corruption
was rife. Every level of government – right down to the policeman on
the street – wanted a piece of the estimated $150-billion US windfall
that was projected in the "deal of the century."
A display ad in a Baku English-language daily newspaper calls upon
the foreign corporations to form an investor forum to collectively
combat the corruption. "It’s not easy doing business in Azerbaijan,"
reads the headline. "Corruption? Unfair practices? Vague regulations?
Unjust courts? Monopolies? Unseen traps for investors? Together let’s
try to change things!" Another sign that the flow of new money is
having an impact is that the police are no longer as aggressive in
their encounters with foreign nationals.
"One night the local police stopped a BP employee on his way home
from the bar. When he refused to pay them the usual ‘We’ll let you
go this time’ bribe, they locked him in jail," said Hermann Lehmann,
a six-year veteran on the Azerbaijan oil scene.
"The next day, when he informed his bosses at BP, they immediately
demanded justice and heads rolled at the police station. Believe me,
money talks in Baku."
(Scott Taylor is the publisher/editor-in-chief of Esprit de Corps
magazine and can be reached at [email protected])
http://www.businessedge .ca/article.cfm/newsID/13240.cfm
From: Emil Lazarian | Ararat NewsPress
