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Catch-907 in the Caucasus

Catch-907 in the Caucasus

Mini Teaser: Baku, they say, is booming.

by Author(s): Thomas Goltz

Baku, they say, is booming. Everywhere you look there are new stores, new filling stations, new bars, new restaurants, new cars, new buildings. My old Russian teacher, Elfrieda, who a mere three years
ago used to complain bitterly about her $10 per month salary and the quality of the meat in the slaughter-in-the-street markets around town, now shops only in the newly opened, spick and span, paper-clips to caviar RamStore, where the hamburger (and chops and steaks and sirloin) is now listed by grade and neatly wrapped in cellophane--and handed over with a thank you very much.

Up and down "Neftjilar Prospekti", or Oilmen's Boulevard, shops, cafés, and Western-style bars are springing up like so many hydrocarbon-fed mushrooms. Most, like the Ragin' Cajun bistro (run by an American), and the Sine Klub (owned by two Turkish entrepreneurs), cater to foreigners and locals associated with the country's infant Caspian oil industry and the growing diplomatic community. The only thing lacking, it seems--and there are millions of dollars to be made for the first person who picks up the idea--is a series of dry cleaning shops to deal with the piles of new dirty laundry. Oil can do that.

The growing list of international companies (seemingly everyone from Brown & Root to Penzoil now have offices in town) and embassies--there are now seventeen of the latter, including those of Israel and Iran--employ hundreds if not thousands of Azeris, all of whom directly contribute to a "trickle-down" of wealth into the economy as a whole. This is a long way from the Azerbaijan I knew in 1991. It seemed then that I was the only foreigner who was interested in the country. "You are living in Azer-what?" was the usual response from friends and family back in Montana. The response from locals Azeris to my presence was a little different: Because I was the first foreigner (or at least American) that many of my new Baku friends had ever met, my apartment was regarded as the quasi-American embassy in town. I personified the American Presence, an honor I not only did not deserve, but actively resisted.

Today, the situation is much different. The estimated number of registered resident Americans has jumped to six hundred, and the total number of foreigners might top three thousand. Elfrieda now sits on the board of the new Azerbaijan International Women's Society, along with the wives of the American and British ambassadors. The American presence is now institutionalized by a large, well appointed embassy, replete with consular office and
library and dozens of uniformed staff. The other Americans in town range from the hundreds of oil men and their hangers-on to high school student exchange administrators, wandering researchers and Ph.D. candidates (all of whom are learning Azeri and not Russian), and God knows how many representatives of various and sundry non-governmental organizations.

Yes, Baku is booming, and, for "old-timers" like myself, remembering it from the immediate post-Soviet period, it is almost unrecognizable after a mere five years. It is, to start, something of a surprise that there is still an Azerbaijan at all. Since achieving independence in the wake of the August 1991 abortive coup in Moscow, the country has "enjoyed" three presidents, multiple acting presidents, two successful putsches, a handful of attempted coups detat, and generally more instability than most Middle Eastern, Caribbean, or chronically putsch-prone Central and South American countries could pack into a full decade. The reason for this is that Azerbaijan lies smack-dab on the ancient triple fault line where (Orthodox) Christianity abuts on not one but both major forms of
Islam (Shi'i and Sunni), and the modern fault line of cultural/economic/political influence between Russia, Turkey, Iran, and now the energy-hungry West. It is not a nice neighborhood in which to raise a healthy, independently-minded civil society, and it seemed very possible a few years ago that the mixture of rapacity and corruption in the oil sector, defeat at the hands of the Armenians in the eight-year war over Karabakh, and the continued Russian effort to regain control of the country and its resources would conspire to put a quick end to Azerbaijan as an independent state.

But that did not happen, and although all these forces are still at play, more than ever before Azerbaijan actually feels like a real country. And while it may be painful for many to admit it, much of the credit has to go to the current president, former KGB general, Azerbaijan Communist Party boss, and Politburo member under Yuri
Andropov, Heydar Aliyev.

The Improbable Nationalist

When Heydar Aliyev came to power in Baku in 1993--de facto in July, de jure in October--under highly convoluted circumstances, his career credentials suggested the hand of Moscow behind him, with the Russian
arm and the rest of its body soon to follow. What a change from Abulfez Elchibey, a pro-Turkish and pro-Western Azeri nationalist whose main political guidepost appeared to be "anybody but Russia." But to the surprise of most observers inside and outside the country, Aliyev has linked his fate to that of the new, independent, post-Soviet state. He has become a nationalist.

He has not yet become a democrat, however. Foreign diplomats and observers are right to criticize Azerbaijan's snail-slow pace of political reform. At the same time, there is no doubt that Aliyev reigns over a country in the throes of profound and mainly positive material change. In a sense, Aliyev is taking the Chinese approach to
things--economic stabilization and progress before a roll of the political dice--and given the relative histories of Chinese and Soviet reform trajectories in the 1980s, who can blame him? Whatever else is said about him, President Aliyev has managed to bring his country the first taste of the potential wealth promised by Caspian
oil, even though that oil has yet to flow. When it does, however, it will be the proverbial gusher. Azerbaijan is sitting on $100 to $200 billion worth of black gold. To get to and export it, Western oil consortiums have committed themselves to pumping tens of billions into Azerbaijan over the next decade. Collateral investment may bring that figure to as much as $75 billion. That, as even Senator Dirksen would have agreed, is real money.

The question is whether Azeri society can tolerate that infusion of wealth and make use of its resources to become a "second Norway", or whether it is condemned to become a "second Nigeria", with all that implies. The question arises because oil is truly a dirty business. A professor of mine at Princeton, Charles Issawi, once referred to it
as less a blessing than a curse because of its propensity to make small but oil-rich nations lazy, corrupt, and coveted by their neighbors. With a few exceptions, too, it has not conduced to helping sustain democracy where it did exist, and oil has by no means shown a capacity to transform non-democratic political cultures into democratic ones. This has certainly been true in the case of post-Soviet Azerbaijan, which clearly falls into the latter category.

So while it is fashionable among some circles in Baku, and abroad as well, to blame the lack of (or at least the attenuated state of) democracy in Azerbaijan on President Aliyev, the reality is more complex. The rationale for Aliyev's authoritarianism, it is said, is that he wants all the wealth for himself and his family. But while it
is true that Aliyev and his Nakhichevan clan are taking advantage of the inchoate oil boom in Baku, so has everyone else who has sat in the roller-coaster driver's seat in the Azerbaijani capital--namely, Aliyev's two predecessors as president, the neo-communist Ayaz Mutalibov (September 1991-March 1992), and the pan-Turkic nationalist, Abulfez Elchibey (June 1992-June 1993), both of whom were removed from office in the course of elaborate plots involving various mixtures of defeat in war, swarms of internal refugees, and corruption born of oil greed.

Of the three, Aliyev may be in the most delicate position of all due to the rapidly rising expectations of a population that now believes it actually lives in a "wealthy" country. Azerbaijan may no longer be engaged in a hot war with Armenia, but it is still in for a long, rough ride before any substantial amounts of oil get to market and
before any real revenue starts accruing for the benefit of the country as a whole. A senior British diplomat anticipates a "ten year trough of social discontent" as a result, and adds: "If Aliyev, or his successor, can get over that hump, this could be a very prosperous country indeed. If not, the potential for chaos and even
disintegration is very real." You do not have to be a Nobel Prize-winning sociologist to understand that potential "chaos" and "disintegration" are not conducive to the development of civil society, let alone a functioning democracy. Nor, for that matter, in a region like the Caucasus (where Mr. Nobel himself made much of his
fortune), is civil society necessarily fueled by an oil-based economy. A little history is perhaps appropriate here to bring us properly to the present moment.

Essay Types: Essay