Catch-907 in the Caucasus

Catch-907 in the Caucasus

Mini Teaser: Baku, they say, is booming.

by Author(s): Thomas Goltz

About six years ago, the representative offices of such giants as Amoco and Penzoil were single rooms in the old Intourist Hotel. From there, they tried to make contact and talk about oil with the bureaucratic machine of the old Azerbaijan Soviet Socialist Republic. Negotiations were less tough than chaotic. It seemed that the late-Soviet leadership of Azerbaijan really did not understand the extent of the energy resources they controlled. Or, possibly, they understood only too well that allowing foreigners to exploit the oil would lead to the regulation of the industry, thus putting an end to their own myopic rapacity. As an oil man involved in the early negotiations described it, "No new oil contracts for production or exploration were going to be signed until the existing infrastructure broke down to the point that there was nothing left to steal."

The only deal that almost got signed during the Mutalibov period of Azerbaijan's earliest independence was with the notorious U.S. mega Oil Company. Under this scheme, oil contracts were to be exchanged for Praetorian Guard-style security services--that is, money for muscle to protect the Mutalibov regime from the opposition Popular Front. Nor was oil helpful in establishing the democratic bona fides of Elchibey's Popular Front government when it came to power in June 1992. Individuals who had earlier been selfless patriots soon learned
the joys of the greasy gravy train, and kept negotiations going until the last moment in order to bring every last corrupt dollar within their grasp.

Oil was then largely responsible for Elchibey's fall from power. The June 1993 putsch against him by the Moscow-backed warlord Surat Husseinov was timed to occur just before Elchibey was to fly to London to sign the so-called Deal of the Century--the huge international oil consortium composed of British Petroleum, amoco,
unocal, Penzoil, and several other oil giants. Nor was it surprising that Husseinov's so-called second coup attempt, this time against Aliyev in October 1994--so-called because it has never been completely clear if there was a coup attempt, or if Aliyev alleged an attempt in order to move against Husseinov--occurred just as the
Azeri Parliament was to ratify the same Deal of the Century contract that Aliyev had initialed a month before. The same goes for the so-called (so-called for the same reason) Ravshan Javadov coup attempt of March 1995: In a truly bizarre scenario that is only possible in an environment of extreme greed, the Turks (or some Turks) decided that they were getting cut out of the action, and that the best way to get dealt back into the Caspian oil sweepstakes was to unseat Aliyev and force yet another renegotiation of the contract.

Aliyev quashed both revolts. But in so doing, he realized that he needed protection--in particular, he needed someone with a vested interest in his government. Because Russia had backed Husseinov and the Turks had backed Javadov, that "someone" became the Western oil men and their governments, particularly those of the United States and Great Britain.

Since the spring of 1995 the security guarantee of the "oil interests" has been cast wider still. Cutting in ever greater numbers of oil companies, the various deals in Azerbaijan now include representatives from Russia, France, Italy, Saudi Arabia, Japan, the United States, the United Kingdom, Norway, and Turkey--and more
contracts engaging still other national and multinational oil companies seem to be signed every other week. Oil men like to refer to this as the "internationalization" of the Azeri oil patch. But as a representative of the Japanese company Itochi suggested with a smile, it may be more accurate to think of it as "international insurance. . . . Our question at this point is whether Azerbaijan--and, for that matter, Georgia and Armenia--will continue
to exist as independent states in 20 years", he explained. "Multiple foreign interest in the oil sector seems to be the est means of insuring that the investments we make today will not evaporate tomorrow."

If tomorrow is a problem, today is a surprise. In a way, it is improbable that anything passing for civil society exists in Azerbaijan. Few in the West would be very surprised or deeply distressed (except in a knee-jerk sort of way) if Aliyev were to ban all opposition parties and institutions and declare and enforce a state of emergency that would effectively turn Azerbaijan into an Uzbekistan-style police state. But he has not done so. During a
recent visit, I was as surprised by the level of political discussion as I was at the pre-oil-boom economic activity. Despite much moaning about Aliyev's authoritarian ways, which have included locking up opponents (e.g., former Foreign Minister Tofig Gasimov) in psychiatric hospitals, show trials (for former military commander Arif Pashaev), and rigged elections (international observers judged the November 1995 parliamentary elections "neither free nor fair"), life seemed pretty normal. A leading member of the Popular Front told me that Aliyev has come to understand that he cannot disregard the opposition's organization, and is quietly trying to work with them in a common effort to keep Russia out of Azerbaijan for good. Leading editors, while noting that censorship has been an issue, pointed out that journalists are finding creative ways to work around the censor's plodding red pen, a favorite technique being to replace cut copy with pithy cartoons--a tractor rolling over an extended tongue,
for example, or a man holding a giant fountain pen that has just leaked all over his pants. And while it was assumed that the Azerbaijani MTT (their equivalent of the KGB) was monitoring phone calls and bugging offices, no one seemed overly concerned about the intrusion; it certainly did not hinder discussion of even the most critical and sensitive of subjects. So while Baku is not Bern, Switzerland, neither is it Tashkent, Uzbekistan.

Even more surprising was the effervescence of non-governmental organizations (NGO) active in all sectors in the country, but particularly in connection with what would be best described as opposition organizations. In addition to the usual international suspects associated with refugee relief and humanitarian aid (the unhcr, Médecins sans Frontières, Save the Children, Oxfam, and the like), there was a plethora of locally staffed foreign NGOs and just plain local NGOs active in such fields as democracy building, constitution writing, free speech-promoting/censorship-busting, and even training in grant-proposal writing, this thanks to the recent arrival of the ubiquitous Soros Foundation.

Indeed, throughout the post-Soviet world there is hardly a country that is not afflicted by that peculiar post-communist malady: NGO-itis. The affliction usually manifests itself through a series of symptoms that can be summed up as an idealistic--or naive--over-reliance on outside funding to promote internal political
and social change. NGO-itis is also manifest in the behavior and attitude of many of the physicians administering to the patients--that is, the foreign representatives of the various NGOs. They display an overzealous approach to social change in societies they know very little about. Thus does naivete meet energetic ignorance, the result being usually a large, if well meaning, muddle.


The difference between Azerbaijan and the other post-Soviet states (and East European ones, too) is that thanks to the Congress of the United States, Azerbaijan does not receive one drop of institutionalized, government-to-government U.S. aid. Rather than promoting institutional change in Azerbaijan by convincing diverse parts of the government to pass this or that law on subjects ranging from privatization to freedom of the press, the Congress has, in effect, dedicated itself to the business of changing the government in Baku. That is to say, we are engaged in promoting revolution, and perpetual revolution at that.

This may come as a shock to many of the good lawmakers in Washington, but it is nonetheless true. Thanks to the little known Article 907 rider to the 1992 Freedom Support Act--the legislative vehicle for the pumping of billions of dollars worth of U.S. aid to the post-communist world to support everything from de-nuking Kazakhstan
to supporting pig farmers in Ukraine--the U.S. government cannot earmark aid to any institution or individual with any connection to the government of Azerbaijan. And, indeed, thanks to Article 907, not one dime of American money has been invested in the process of reforming governmental institutions in Azerbaijan--even when the government was eagerly open to such influence, as it was under Aliyev's predecessor, Elchibey.

Because of 907, too, any persons or organizations in Azerbaijan receiving U.S. assistance are perforce regarded not simply as non-governmental organizations but as opposition organizations interested less in building civil society than in changing the government and replacing it with themselves. The ultimate irony is that were any of the U.S.-sponsored or funded opposition groups to take power and actually be able to effect the sort of societal and
institutional reforms they learned at the knee of their American mentors, at that very moment they, as the government, would be subject to the same restrictions on U.S. aid as their predecessors--that is, they would become U.S. aid pariahs. To pile irony on top of irony, the deposed authoritarian government, now in
opposition (or hiding), would suddenly become eligible for travel grants to attend seminars on human rights, judicial reform, and the beauties of constitutional checks and balances, all as promoted by the founders of the basic law in the United States or their more recent descendants. This is Catch-907.

Essay Types: Essay