AZERBAIJAN: BUILDING BRIDGES FOR PRESIDENT ALIYEV’S RE-ELECTION?
Mina Muradova and Khazri Bakinsky

EurasiaNet, NY
May 30 2007

An ambitious infrastructure upgrade campaign has taken Azerbaijan
by storm in recent months, but some economists point to the 2008
presidential vote as the prime reason for the state-funded building
boom and question the projects’ transparency.

Infrastructure projects will account for a staggering 87 percent of
this year’s government investment programs, recently revised to total
$2.2 billion (1.9 billion manats), according to Oktai Ahverdiyev,
chief of the Cabinet of Ministers’ finance department.

Under this plan, by the end of 2007, Azerbaijan will have five
new airports – some in the remotest parts of the country. Aside
from existing international airports in the western town of Ganja,
Azerbaijan’s second largest metropolitan area, and the exclave of
Nakhchivan (bordering Armenia and Iran), an international airport
is planned for the southern town of Lenkoran, close to the Iranian
border. Airports in Sheki, a popular tourist destination in northern
Azerbaijan, and Zaqatala, a small nearby town, will handle smaller
planes. The cost for these facilities has not been made public.

Extensive highway and bridge projects are also in the works. In
2007, the government plans to spend $500 million on the construction
and repair of highways – a figure that is 80 percent higher than
2006 expenditures, APA news agency reported, citing the Ministry of
Transportation. Ten new bridges and 18 underpasses are planned for
Baku to lessen the city’s growing traffic congestion. In addition,
repairs will be carried out on 40 bridges between Baku and the Russian
border, and a new highway will be built from the Azerbaijani capital
to the Iranian border.

At an opening ceremony for one of Baku’s new bridges in March,
President Aliyev declared that the bridge building shows Azerbaijan’s
economic muscle. "It means that we are becoming strong," media
outlets reported him as stating. The 200 million manat ($232 million)
allocated for the bridges and underpasses "will not be to make a
profit," he elaborated, stressing that "[a]ll of this is done for
the people’s welfare."

Senior government official Ahverdiyev has stated that "poverty
reduction" will also be included in the campaign. Planned expenditures
will target improvement of "the water supply, sanitation systems,
education [system] and healthcare," Aheverdiyev told Trend news
agency recently.

Some questions, however, surround the details.

"Azerbaijan’s infrastructure needs to improve, but first it should be
seriously studied to define priority highways and bridges [for work],
which of them can really eliminate problems with traffic jams," argued
economist Azer Mehtiyev, deputy chairman of Baku’s non-governmental
Center for Economic Research. Money for these improvements has so
far been allocated without such a hit list, he added.

That leaves particular questions about the viability of the five new
airports, observed Zohrab Ismaylov, head of the non-governmental Center
for Market Economy Assistance in Baku. "I am not sure that airports in
Zaqatala or Lenkoran can give a profit even in the mid-term future,"
Ismaylov said. Zaqatala has a population of around 26,000 people,
according to official statistics. Lenkoran’s population stands at
under 50,000. Both towns are in non-industrial areas with no emphasis
on exports.

Both Mekhtiyev and Ismaylov, however, contend that the large-scale
investment projects have as much to do with the 2008 presidential
elections as they do with infrastructure improvements.

Decisions about the infrastructure projects "come suddenly during
[Aliyev’s] trips to the regions and in meetings with residents,"
observed the Center for Economic Research’s Mehtiyev. "There is no
clear… policy."

Mehtiyev holds that the construction projects will be used to let
Aliyev show that he has met a 2003 presidential campaign promise to
create 600,000 new jobs by 2008. At an April 13 speech to government
ministers, Aliyev reported that 535,000 jobs – the majority allegedly
permanent and outside of Baku – have been set up during his time
in office.

Public tenders for the projects have also not been held, a fact
that has spurred concerns that money for the projects, derived from
Azerbaijan’s sizeable oil income, is being misappropriated. Mehtiyev
charges that companies "close to high-level officials" act as project
contractors; Ismaylov of the Center for Market Economy Assistance
claims that a recent 371 million manat (about $369 million) increase
in state investments was approved by parliamentarians without detailed
information about the funds’ intended use.

"From the point of view of efficiency and of transparency in spending
oil revenues, the construction industry is not the best sphere,"
Ismaylov stressed. Many construction companies are unregistered and
operate wtihout paying taxes, he noted.

One pro-opposition political analyst agreed. "[Information about]
implementation of these projects is closed to the public," charged
Rasim Musabekov. "It is out of public control and gives the government
an opportunity to misappropriate oil revenues."

Government officials could not be reached for commentary.

But for President Aliyev, what matters is that signs of change are
beginning to appear.

"New business have opened, roads are paved, neighborhoods improved
and modernized," the Azerbaijani leader told reporters in April. "The
main goal is to reduce the gap [in living standards] between urban
and rural population centers. And we can achieve this."

Editor’s Note: Mina Muradova and Khazri Bakinsky are freelance
reporters in Baku.