Countries at the Crossroads 2006 - Azerbaijan

(Scores are based on a scale of 0 to 7, with 0 representing weakest and 7 representing strongest performance.)

Introduction

Azerbaijan is an energy-rich state of eight million inhabitants located in the politically fragile south Caucasus region. Energy resources and strategic location render the country of serious interest to its immediate neighbors and global powers alike.

Azerbaijan's principal challenge in the near term is to identify a course to enable genuine political reform and to open the country's now tightly controlled institutions to more democratic participation. In this regard, the November 2005 parliamentary elections and the presidential elections in October 2003 are emblematic of the profound institutional challenges that confront the country. These two flawed elections also represent the political bookends of the Ilham Aliyev era to date.

International observers and reformers in Azerbaijan looked to the parliamentary elections of 2005 as a potential turning point in Azeri politics. However, these elections, like the presidential ballot of November 2003, were beset by irregularities and failed to meet international standards. The authorities took some modest, positive steps during the 2005 election cycle, including lifting a ban on election monitoring by local nongovernmental organizations (NGOs) that receive more than 30 percent of their funding from outside sources and creating a public television station. These measures were, however, offset by extensive flaws in the vote tabulation process and intimidation of opposition candidates. The authorities' controlling approach to this election ensured that the opposition would not achieve a competitive threshold.

The poor conduct of the election process is in essence a symptom of far deeper and fundamental challenges confronting the country. The source of the problem rests in an entrenched political culture that retains Soviet-era governance features, among them flawed institutions incapable of achieving sufficient levels of accountability.

The slow progress on implementing democratic reforms has not gone unnoticed by key Western institutions and monitoring organizations. While Azeri government officials cite gradual improvements in the country's governance, domestic critics and outside organizations assert that little meaningful reform has been implemented under Ilham Aliyev's leadership. The Organization for Security and Cooperation in Europe (OSCE) and the Council of Europe (COE), for instance, have repeatedly chided the authorities for the sluggish pace of reform.

The June 2005 final resolution of the Parliamentary Assembly of the Council of Europe (PACE) on "Functioning of Democratic Institutions in Azerbaijan" was particularly scathing in its critique of the country's lack of progress. The report cited an extensive list of deficiencies in what are the building blocks of a democratic system, including open and fair elections, freedom of assembly, and independence of the news media and of the judicial and legislative branches of government.¹ The nongovernmental sector likewise finds itself under great pressure and pushed to the fringes of Azeri society. The marginalization of organizations and forces not aligned with the regime presents a dilemma that confronts many other unreformed post-Soviet regimes: namely, how to include alternative voices in the political process and move away from zero-sum politics.

In the short to mid term, oil revenues and energy-sector driven economic growth should provide a social cushion. The year 2005 saw the official inauguration of the Baku-Tbilisi-Ceyhan pipeline, which has the potential to help bring about a previously unknown degree of prosperity for the citizens of Azerbaijan. Oil is slated to flow through the 1,100 mile-long pipeline in earnest later in 2006. Nevertheless, weak rule of law and the absence of independent institutions capable of holding powerful actors accountable suggest that the system may fall prey to the resource curse, a phenomenon that afflicts many states with substantial natural energy wealth and substandard institutions.

The "frozen" conflict of Nagorno-Karabakh, which created some 800,000 internally displaced persons (IDPs) in Azerbaijan, is another issue that looms large on the Azeri political scene. These IDPs include a generation of children who have been born and are growing up in appalling conditions, and may well be ripe for recruitment into radical Islamic groups in the not-too-distant future. So long as this conflict remains frozen, it will also act as an obstacle to regional cooperation and maintain a dangerous degree of mutual enmity between Armenians and Azerbaijanis.

While the November 2005 elections revealed that the ruling powers remain determined to prevent political opposition from reaching a competitive threshold, the ballot also offered evidence to suggest that the opposition is ill equipped to mount a serious challenge. The suffocating grip on Azerbaijan's politics by the ruling Yeni Azerbaijan Party (YAP) presents a singular challenge for the country's political development. At the same time, a poorly organized opposition has not distinguished itself, leaving an enormous reform vacuum in the country's political life.² Weak political competition and the absence of meaningful checks and balances feed into a system in which the ruling elite can and does operate with impunity.

Accountability and Public Voice – 2.43

Azerbaijan's constitution assures its citizens the right to change their government peacefully. However, in practice this right is effectively denied. Indeed, all of the elections conducted under the stewardship of former president Heidar Aliyev and more recently under his son, Ilham Aliyev, have fallen short of international standards for democratic elections. The parliamentary elections held in November 2005 were no exception.

The obstacles to free and fair elections are manifold. Opposition parties are at a severe disadvantage in terms of resources. The authorities use the full complement of state administrative resources to advance the interests of the ruling YAP, systematically denying the opportunity for political opposition to reach a competitive threshold. The November parliamentary vote represents a case in point.

In the November 2005 elections, the YAP captured 58 seats in the 125-member parliament, while opposition parties won 13; the Azadliq (Freedom) bloc won eight. The majority of the 42 independents with no party affiliation are believed to be beholden to the government.³ The Constitutional Court annulled the results in 10 districts, whose races were to be rerun on May 13, 2006. Apart from technical and administrative obstacles in the election process, the authorities also employ more brutal tactics in managing political competition. In the weeks leading up to the election, the main opposition bloc (Azadliq) faced a state media smear campaign as well as arrests, beatings, and intimidation by the authorities.⁴ International observers criticized the vote, but given the control of content on the airwaves and the authorities' downplaying of the Western monitors' findings, it was unclear in the immediate aftermath of the election whether the Azeri public was aware of the independent observers' critical assessment.⁵

As has been the case in other recent election periods, the most recent election cycle was characterized by highly polemical political rhetoric. The government and principal opposition parties in Azerbaijan tend to speak at or past each other. As a result, little in the way of meaningful policy debate on the major public issues confronting the country takes place. The absence of a serious policy dialogue on Azerbaijan's ballooning oil wealth is of particular concern. Moreover, in the wake of the popular democracy movements in Georgia, Ukraine, and Kyrgyzstan, political discourse in Azerbaijan has in many ways become a zero-sum affair, whereby incumbents assert that political opposition seeks only to upend the existing order. Meanwhile, the regime's invoking of a potential revolution scenario provides a rationale for taking even more restrictive action against the opposition.

Among the most damaging by-products of this distorted political dynamic is that incumbents systematically deny a meaningful level of opposition participation in the policy-making and political process. This denial of even a modicum of political space inflames resentment and frustration within the opposition, all of which perpetuates an environment of recrimination and suspicion.

Given the authorities' track record in previous elections, a host of international monitoring bodies was particularly attuned to the conduct of the 2005 elections. For example, the OSCE's Office for Democratic Institutions and Human Rights conducted a comprehensive needs assessment (NAM) in 2004, which spelled out the areas in which the Azeri authorities should improve electoral practice. The OSCE issued a report five months in advance of the November 2005 election that enumerated key areas requiring reform.

Among the reforms the NAM cited were: the composition of election commissions at all levels should be reconfigured in a manner that ensures they enjoy public confidence, and in particular the confidence of those running for office; election officials who committed fraudulent actions leading to invalidation of results in 694 polling stations in the 2003 presidential elections – as well as persons in charge of Constituency Election Commissions where serious violations occurred – should be prosecuted and should not be involved in administering the November 2005 parliamentary elections; the powers given to the local authorities to restrict political gatherings should be curtailed, and freedom of assembly should be respected during the election period; the authorities should implement previous recommendations to use inking of voters' fingers as a public confidence and transparency measure; and the reconsideration of provisions in the law that prohibit NGOs that receive more than 30 percent of their funding from foreign sources from monitoring elections.⁶

The OSCE NAM report represents a broad critique of the Azeri electoral infrastructure and process. However, Azeri authorities took a distinctly minimalist approach to the OSCE critique, implementing only a handful of measures too late in the election process to make a serious positive impact.

For example, on October 28 – only a week before election day – the authorities lifted the ban on NGOs receiving 30 percent of their funding from foreign sources to send election observers. This modification of the Law on Public Unions and Foundations was encouraged by the Council of Europe and the OSCE/ODIHR, but due to the extremely short interval between its adoption and election day, it had little practical effect on the November 6 election.⁷

During the weeks leading up to the November election there was no shortage of political intrigue. What the regime characterized as a planned coup resulted in the arrest of a number of former cabinet ministers and business leaders. They included minister of economic development Farhad Aliyev, former finance minister Fikrat Yusifov; Fikrat Sadyqov, the former head of Azerbaijan's state-controlled Azerkimya petrochemical company; former health minister Ali Insanov; and former presidential administration official Akif Muradverdiyev. Yusifov was arrested on October 16, shortly in advance of the expected return to Azerbaijan of exiled opposition leader Rasul Quliyev. Azerbaijan's law enforcement agencies say Yusifov's initial confessions made possible all subsequent arrests. Authorities claimed that some 13 former cabinet ministers, government officials, business executives, and police officers were detained on charges that include preparation of a coup, illegal possession of weapons, embezzlement, and corruption.⁸

The net result of the existing political structure is that no credible opportunity arises for the effective rotation of power among a range of different political parties representing competing interests and policy options.

Given the heavy hand of the state in so much of Azeri life, one of the spheres that could help in the larger democratic reform effort is civil society. Here, too, however, the authorities have taken an adversarial posture. Azerbaijani law prohibits nongovernmental groups from taking part in political activity, and, more generally, the civic sector is not able to influence public affairs or policy choices in a significant and consistent manner.

NGOs continue to face serious problems in registering with the Ministry of Justice. A joint assessment report prepared by the International Monetary Fund and the International Development Association, however, recognized progress in the consultative process among a number of communities in discussing poverty reduction. At the same time, the assessment report stressed the need to institutionalize this behavior and to make it a regular and integral part of policy formulation in the country.⁹

A more comprehensive report issued in 2005 by the OSCE was highly critical of the obstacles NGOs confront in the registration process. The OSCE monitors concluded that no serious improvements had been made in the registration process for NGOs since the adoption of the new Law on State Registration and State Register of Legal Entities in late 2003.¹⁰ Moreover, NGOs in Azerbaijan are sustained principally through international donors; a reduction in international support would have a debilitating effect on the already precarious position of indigenous NGOs.

Azerbaijan's media sector also confronts major obstacles. Authorities use a variety of tools to manipulate and intimidate the press. State businesses in Azerbaijan, for example, do not advertise in opposition newspapers. A private business with interests in state contracts in an economy still dominated by the state will usually decide that caution is wiser than advertising in such publications. Publications not aligned with the authorities must obey the rules of state-owned printing facilities. Distribution of opposition publications outside the capital city of Baku is often obstructed. The court system is subordinated to the executive, and therefore journalists, editors, and publishers do not have consequential legal recourse.

Journalists are also subject to physical abuse, risking death. In March 2005, Elmar Huseinov, editor at the opposition magazine Monitor, was gunned down in the stairwell of his apartment building in Baku. Why he was killed and by whom is unclear. The whole story behind the murder of this opposition journalist may never be known, but the case, with its opaque investigation and doubts about the vigor with which it is being pursued, is emblematic of the difficult environment for the press in Azerbaijan.

The scope of the authorities' intimidation and restrictions are laid out in detail in a report issued in July 2005 by the OSCE's rapporteur on freedom of the press, Miklos Haraszti, who paints a troubling picture.¹¹ While there is still some degree of pluralism in Azerbaijan's print media, in television there is virtually none. Azerbaijan has 16 television channels, six of which broadcast to a national audience (AzTV1, ANS, Lider, Space, ATV, Public TV). A number of the channels with national reach have clear or believed links to the regime. For example, Lider TV is run by President Aliyev's cousin, Adalat Aliyev. Space TV is owned by the president's sister. ATV is widely believed to be controlled by the president's powerful chief of staff, Ramiz Mehtiev.

During the 2005 election campaign, in its prime time news and current affairs programs, ATV demonstrated a clear bias. Media monitoring of election campaign content revealed that in the two months leading up to election day ATV devoted 97 percent of its political and election prime time coverage to the activities of President Aliyev, the presidential administration, the government, and the YAP.¹² Private stations Lider, Space, and ATV reflected a pattern of political favoritism similar to that of state-funded broadcasters during the 2005 campaign.¹³ All of this occurred despite President Aliyev's decree in May 2005 that mandated complete media access for all parties, freedom of assembly during the election campaign, and the ability of independent organizations to conduct exit polls without interference.

One noteworthy development on the Azeri media scene was the unveiling of the country's first public-service broadcasting channel, which hit the airwaves in August 2005. Following the flawed 2003 presidential election, the Council of Europe adopted a resolutiondemanding that the government of Azerbaijan immediately implement a series of steps that included the creation of public-service television to allow all political parties to communicate better with the country's citizens.¹⁴ While the Council of Europe for months exhorted the authorities in Baku to establish a genuinely independent and professional public broadcasting channel, the regime dragged its feet. Nevertheless, candidates did have more free airtime than in past election cycles, a welcome step that should be institutionalized going forward.¹⁵ Whether the authorities will ease control of the new public broadcasting channel to permit discussion of serious social and political issues is an open question. Given the relatively limited resources available to public broadcasting and the lopsided composition of the nine-member public broadcasting steering committee that oversees programming content and strategy, the prospects for a truly independent station are rather doubtful.

Recommendations

• The last-minute action to enable NGOs receiving 30 percent or more of their funding from foreign sources to send election observers was too late to have a meaningful impact on the November 2005 parliamentary elections. For future elections, the authorities should enable the NGO community to play a significant watchdog role in the election process.
• The capacity and independence of the new public broadcasting station should be ensured by the authorities. Toward this end, the composition of the public broadcasting steering committee should be balanced with members possessing a range of political affiliations and reflecting a diversity of views. In addition, the fledgling station should receive sufficient resources to fulfill its promise as a genuine, independent information source for Azerbaijan's citizens.
• The authorities should make an affirmative effort to enable the activities of independent NGOs and civic groups.
• Television and radio licensing procedures need to be reformed to make them more transparent and fair.

Civil Liberties – 3.21

Azerbaijani law prohibits torture or other cruel or degrading treatment or punishment. However, in practice the government is believed to commit numerous human rights abuses.

Four deaths occurred in custody over the course of 2004, allegedly due to beatings. Police tortured and beat persons in custody and used excessive force to extract confessions. In most cases, the government took no action to punish abusers. Prison conditions remained harsh, and some prisoners died as a result of these conditions; however, the government did permit independent monitoring of prison conditions by local and international humanitarian groups. Arbitrary arrest and detention and lengthy pretrial detention continued to be problems.¹⁶

Authorities often arbitrarily arrested and detained persons without legal warrants. The law allows police to detain and question individuals for three hours without a warrant. The constitution also states that individuals who are detained, arrested, or accused of a crime should be advised immediately of their rights and the reason for arrest and should be accorded due process of law. The authorities did not respect these provisions in practice, however.¹⁷ In March 2004, President Aliyev pardoned more than 100 persons, whom the Council of Europe had designated as political prisoners.¹⁸

In the months leading up to the November elections, the authorities in a number of instances resorted to the use of force in suppressing public protests. On May 21, 2005, riot police armed with shields and batons intervened to prevent scores of would-be participants from reaching the venue for a planned opposition rally in Baku. Officials rejected the organizers' request for permission to hold the rally, arguing that it was inappropriate to hold such a mass action in advance of the arrival in Baku of foreign heads of state scheduled to attend the official inauguration on May 25 of the Baku-Tbilisi-Ceyhan export pipeline.¹⁹ The Azerbaijani authorities have had a poor record on freedom of association and assembly, sometimes resorting to force to disperse opposition rallies not sanctioned by the authorities. In September, police in Baku violently dispersed a small gathering of demonstrators who had gathered to protest the detention of a member of the youth group Yeni Fikir (New Thinking).²⁰

A month earlier, in August, Ruslan Bashirli, the head of Yeni Fikir, which is the youth wing affiliated with the Azerbaijan Popular Front Party (AHCP), was arrested on charges of receiving funds from the Armenian secret services as part of a coup attempt. According to the Azerbaijani Prosecutor-General's Office, Bashirli traveled in July 2005 to Tbilisi at the behest of his mentor, chairman Ali Kerimli. While in Tbilisi, Bashirli allegedly met with three men, an ethnic Georgian and two Armenians, all of them Armenian intelligence agents, and told them he was working on instructions from a U.S.-based assistance organization to prepare for a revolution in Azerbaijan.²¹

In the aftermath of this affair, questions persisted about the facts behind the events. Whether the Azeri authorities used the episode in Tbilisi to discredit the AHCP and its leader Ali Kerimli in a fashion similar to the arrests of cabinet and other senior officials in Baku three weeks before the election is a question that may never be fully answered.

Azerbaijan's constitution provides for equality between men and women. Nonetheless, Azerbaijan is a traditional, male-dominated society, where women hold few formal high positions of power. While there is some NGO activity to promote the rights of the disabled, the authorities have not made meaningful efforts to advance such rights.

Azerbaijan is classified as a "Tier 2 – Watchlist" country by the U.S. State Department's Office to Monitor and Combat Trafficking in Persons. This indicates that the government of Azerbaijan does not fully comply with the minimum standards for the elimination of trafficking; however, it is making significant efforts to do so. In June 2005, the parliament (Milli Majlis) passed a Law on Fighting Human Trafficking. Azerbaijan is primarily a country of origin and transit for women and children trafficked for the purpose of sexual exploitation. Azerbaijani, Russian, Ukrainian, and Central Asian women and girls were trafficked from or through the country to the United Arab Emirates (U.A.E.), Turkey, Pakistan, and India. Internal trafficking of women and girls appeared to be an increasing problem.²²

On April 2, 2004, a three-judge panel convicted Ilgar Ibrahimoglu, the imam of the independent Juma mosque, of inciting and committing violence in connection with a postelection demonstration in October 2003 that turned violent. He was given a five-year suspended sentence and released immediately, having served four months in pretrial detention. On July 30, 2004, authorities detained the imam again, together with 25 members of the Juma mosque, in connection with activities of the mosque but released him the same day.²³

While independent unions tend to be weak and generally are kept in check by the government, workers at the McDermott oil services company, a U.S. concern, were the exception to the rule. On November 22, 2005, some 1,500 workers at the company's construction yards walked off the job in what was the first mass strike action since Azerbaijan achieved independence in 1991. The strike lasted only one day, but workers signaled their intention to halt work again if their demands were not met. McDermott officials, together with representatives from the Azerbaijani state oil company SOCAR, made an offer, which the strikers rejected. On November 28, workers halted their activity. On November 29, McDermott officials agreed to give their Azerbaijani workers a 20 percent pay increase, effective December 1, and then a further 12 percent raise January 1, 2006.²⁴

Recommendations

• The Azerbaijani authorities must take most aggressive steps to ensure that torture is no longer a feature in the criminal system.
• The Azerbaijani authorities must respect freedom of assembly and ensure that peaceful public protest is permitted.
• The government of Azerbaijan should implement a victim referral and protection system, provide adequate anti-trafficking training for police, and properly vet officers on the anti-trafficking unit.
• The authorities should release all remaining persons designated as political prisoners by the Council of Europe.
• The Azerbaijani government should be encouraged to work in tandem with the independent trade union representing oil-sector workers to minimize discrimination by foreign companies against Azerbaijani employees.

Rule of Law – 2.29

Azerbaijan's judiciary is corrupt, inefficient, and politicized. It suffers from a number of critical deficiencies, including heavy influence on its work from the executive branch. These realities have the practical effect of denying average citizens access to justice. Due to the pivotal role of the judiciary in ensuring that the rule of law prevails in day-to-day life, its weakness and lack of independence also has a spillover impact on other key sectors of Azeri society. Judicial corruption and poor administration, for example, have aroused the concern of Azerbaijan's business community, which increasingly see these deficiencies as serious impediments to business development.²⁵

Criminal matters remain under the influence of Soviet-era practice whereby investigations are conducted as much to obtain confessions as to gather and analyze evidence. Recognizing the weaknesses of the country's legal profession, several international organizations have sought to work with the authorities to advance legal reform. In an assessment of the legal profession in Azerbaijan issued in March 2005, the OSCE and ABA/CEELI deemed the situation for lawyers in Azerbaijan to be "critical."²⁶

Azerbaijan's Law About Advocates and Advocates' Activities, which mandated the creation of a new bar association, was adopted in 1999. No new members were admitted to the Collegium of Advocates, an association of attorneys over which the authorities have maintained de facto control, between 1999 and 2004.²⁷ In August 2004, President Aliyev signed amendments to this law, which came into effect in 2005. The spirit and intent of the law is to expand the number of advocates available to defend individuals in criminal matters. Indeed, one of the principal limitations on the right to choose legal representation freely in criminal cases has been the small number of lawyers entitled to represent clients in Azerbaijan. With one lawyer for every 22,887 people, the ratio of lawyer to citizen is among the lowest in the Newly Independent States.²⁸

The new law was to have opened up the initial membership of the new Collegium to more than 200 licensed lawyers. This would almost double the number of advocates in the country. However, the Ministry of Justice and the Organizational Committee for the new Collegium of Advocates interpreted the law's provision on licensed lawyers in a very narrow and restrictive manner, effectively limiting to 36 the number of qualified lawyers.²⁹

Generally speaking, lawyers' work is not highly valued, and typical fees are egregiously low. For example, by one estimate an hour of a state barrister's time is valued at 2,250 manats (approximately US 46¢). The average fee of a barrister per case is 300,000 to 600,000 manats (US$ 61-122).³⁰

Amendments to the law governing the selection of judges, which included a more rigorous exam procedure, came into effect in 2005. International observers have assessed the new selection process to be an improvement, demonstrating greater transparency and fairness.

Defendants' access to legal counsel is uneven, and there have been cases in which detained individuals were not allowed to communicate with an attorney or were held in detention longer than permitted by law. This was a particular issue in the case of the arrests in connection with the alleged coup attempt that the authorities claimed was orchestrated by Rasul Guliyev and a number of prominent government ministers and officials, including economic development minister Farhad Aliyev, his brother and Azpetrol chairman Rafig Aliyev, and health minister Ali Insanov.

Given the overall capriciousness of the Azerbaijani legal system, it is not entirely surprising that the system does not afford consistent protection of property rights. In lucrative strategic sectors, individuals closely aligned with the regime have significant advantages in acquiring control of assets.³¹

Civil control of police, security services, and the military is recognized in legislation and in the constitution. However, given the concentration of power in the executive and limited checks on it, as a practical matter security forces and the military are considered to be under civilian control to the extent they obey the president. The only potential check on the president in this context is the Constitutional Court, which, at least in theory, can challenge the president. However, presidential appointment of the Constitutional Court's judges limits such accountability in practice.

In a story that captured national headlines in March 2005, officials from the Ministry of the Interior were found to be involved in a kidnapping ring. As part of this drama, the Ministry of National Security launched an operation on March 10 that secured the release of Zamira Hajieva, wife of the president of the International Bank of Azerbaijan, who had been abducted a month earlier by a group that demanded several million dollars in return for her safe release. Hajieva was found in a concrete bunker belonging to a senior police official who was apprehended together with some 20 other people, seven of them interior ministry officials. On March 23, Minister Usubov dismissed his first deputy, Zakhid Dunyamaliyev, Criminal Investigations Department head Zakir Nasirov, and two of Nasirov's deputies. The National Security Ministry and the Prosecutor-General's Office released a joint statement the same day on additional crimes allegedly committed in recent years by a criminal gang headed by former interior ministry official Haji Mamedov.³²

Article 25 of the constitution asserts the principle of equality of all persons before the law and courts. However, in practice those with close ties to the regime and ruling party have significant advantages. Moreover, the regulatory and administrative capriciousness that is a day-to-day reality vitiates the right to property enshrined in the constitution. Protections are frequently not upheld within the legal system.

Recommendations

• The authorities should redouble efforts and make judicial reform a first-order priority. Building on the positive steps achieved in the judicial examination process should be a part of this effort.
• Within the context of the larger legal reform effort, the Azerbaijani authorities should take priority action to ensure private property rights are ensured.
• The authorities must make more effective efforts to ensure that the new Collegium of Advocates has a sufficient quantity and quality of lawyers to meet society's needs. To this end, the Ministry of Justice and the organizational committee for the new Collegium should interpret the new law's provision on licensed lawyers in an expansive manner to promote a significant increase in the number of qualified lawyers.
• Azerbaijan's leadership must take steps to ensure that power institutions, such as the interior ministry, are subject to greater accountability and transparency.

Anticorruption and Transparency – 1.27

High levels of corruption plague all sectors of the Azeri system. Corruption therefore represents one of the country's biggest obstacles to political, economic, and social development. The absence of political competition is a fundamental contributing factor to the persistently corrupt environment. Azerbaijan ranks 101 out of 177 in the United Nations Human Development Index, below its resource-poor neighbors in Georgia and Armenia. The country was ranked 137 out of 159 countries surveyed in the 2005 Transparency International Corruption Perceptions Index.

Like those of many of its post-Soviet neighbors, the bureaucracy in Azerbaijan has a life of its own, creating an environment in which average citizens are at the mercy of unaccountable and often capricious bureaucratic behavior. The ruling YAP tends to integrate the personal interests of officials with the public offices they hold. In Azerbaijan, corrupt clans treat large state corporations as private fiefdoms and maintain monopolies in consumer goods, trade, and other non-oil sectors, strangling the creation of other businesses. Although Azerbaijan has enjoyed solid economic growth in the last two years, much of the country suffers from poverty, especially in rural areas.³³

A web of regulations and bureaucratic requirements provides fertile terrain for corruption on both petty and grand scales. Of course, this reality is reinforced by the weakness of critical institutions, such as the judiciary and news media, which could exert a positive impact against the pervasive corruption that afflicts Azeri society.

Grand corruption manifests itself in a number of ways, including excessive state involvement in the economy, with many officials believed to be enjoying significant stakes in strategic industries. While there is a critical absence of meaningful political competition among a range of different political parties representing varying interests and policy options, intraparty competition within the YAP can be fierce, especially when it comes to controlling interests in strategic industries.

Opaque, oligarchic competition plays out in a number of ways. For example, as part of a preelection action undertaken by President Aliyev in October 2005, Economic Development Minister Farhad Aliyev was fired from his post. Law enforcement agency sources suggested that both Farhad Aliyev and his brother, Rafik, president of the Azpetrol oil company, were arrested on suspicion of preparing a coup against the government. Farhad Aliyev reportedly came into conflict with senior officials, including Kamaladdin Heydarov, head of the State Customs Committee. In late 2004, Farhad Aliyev had launched an anti-monopoly campaign, naming customs impediments for imports as a main tool relied on by monopolies to preserve their business domains. The campaign appeared to divide members of parliament from the ruling YAP into two camps. Rafik Aliyev, Farhad Aliyev's brother, as president of Azpetrol Oil Company, controlled 90 percent of Azerbaijan's gas stations. Farhad Aliyev is believed to control companies dealing with cement and aluminum production, electricity distribution, and telecommunications. Meanwhile, as part of this intra-elite competition, Heydarov is alleged to control banks, part of the construction sector, fisheries, and part of the mobile communications market.³⁴

The authorities created a number of anticorruption bodies in 2004 and 2005. President Aliyev issued decrees in March and September 2004 endorsing, respectively, a law on combating corruption and Azerbaijan's State Program on Fighting Corruption. In August 2005 President Aliyev issued a decree on financial disclosure by public officials. Under the decree, the president, the speaker of the parliament, the head of the presidential executive staff, the prime minister, deputy ministers, Supreme Court judges, and ambassadors abroad must submit information on their incomes to an anticorruption commission, which was formed under the State Service Management Council. The powerful chief of the presidential administration, Ramiz Mehtiyev, supervises both the anticorruption commission and the State Service Management Council.

Formal anticorruption structures have therefore been put in place. However, given the organization of the political system and these anticorruption bodies' lack of independence in their current form, it is more likely in practice that these entities will follow a pattern of being used for factional score-settling than for fair and systematic addressing of the country's pervasive corruption.³⁵

The education sector also falls prey to corruption. Bribes are commonplace for admission to university, receiving good grades, and graduation. In June 2005, a protest against corruption in the education system was organized by a group calling itself "No to corruption in the education system" and the electoral bloc Yeni Adlar (New Names) but was dispersed immediately by the police.³⁶

In September 2005, the government instituted a significant pay raise for traffic police, who in Azerbaijan and much of the former Soviet world have an almost legendary capacity for fleecing average citizens. Under the new salary structure, some 1,400 traffic police earn US$350 per month. Officers earn between US$500 and US$700, as much as seven times more than their previous salaries. Whether this measure makes an enduring impact may depend on the extent to which it can affect the larger pyramid system of bribery in which payoffs are demanded by superiors throughout the chain of command.³⁷

While the opposition media write on allegations of corruption within the government, the accusatory and often inflammatory tone of this reporting renders it ineffectual. Moreover, the profound weakness of independent media makes reporting on corruption issues more difficult. This is especially true of national broadcast media, from which most average citizens obtain their news, and which is largely controlled by the ruling elite and therefore rarely offers fair or vigorous scrutiny of official corruption.

With more than $2 billion in infrastructure projects expected largely to be financed through oil revenues in 2006,³⁸ safeguards on public spending will become even more important. Bureaucratic regulations and a general lack of transparency contribute to an environment where corruption can flourish on the awarding of public contracts.

Sufficient public access to official information is a serious problem, contributing to a legal and regulatory environment that is nontransparent. As part of the country's larger challenge of improving transparency, information on governmental budget making is not accessible to the general public, nor is the extent of the legislative branch's access to and scrutiny of executive branch budget matters known. A comprehensive access to information law was adopted and is to come into effect in December 2005. The authorities have one year to implement the provisions of the new law, which would among other things require public access to legislation and laws, and post key information to the World Wide Web.

Recommendations

• The authorities must establish an anticorruption body that is genuinely independent and capable of exercising influence on and making a dent in the country's considerable corruption problem.
• A vigorous public discussion of Azerbaijan's corruption is essential. Toward this end, the authorities must do more to enable national broadcast media to report on allegations of official corruption.
• The authorities should take a cooperative posture toward civil society organizations and leverage the nongovernment sector's capacity and expertise in the effort to solve Azerbaijan's massive corruption problem.
• The authorities should fully implement the important law on access to information, which would enable sorely needed transparency across the official bureaucracy.

Author

Christopher Walker is Director of Studies at Freedom House.

Notes

1 Andreas Gross and Andrea Herkel, "Functioning of Democratic Institutions in Azerbaijan (Doc. 10569, Report of the Committee on the Honoring of Obligations and Commitments by Member States of the Council of Europe [Monitoring Committee])" (Strasbourg: Parliamentary Assembly of the Council of Europe, Resolution 1456, 22 June 2005).

2 Guy Chazan, "Protest Over Azerbaijan Elections Fails to Draw Huge Crowds – Azerbaijan's Unpopular Revolt, Opposition Fails to Muster Support Seen in Other Democracy Drives," Wall Street Journal, 10 November 2005, A15.

3 Margarita Akhvlediani and Shahin Rzayev, "Azerbaijan: A Question of Change" (London: Institute for War and Peace Reporting [IWPR], Caucasus Reporting Service, No. 315, 23 November 2005).

4 "A Rocky Past and Hazy Future for Azerbaijan's Opposition," Agence France-Presse (AFP), 30 October 2005.

5 C.J. Chivers, "Observers Criticize Azeri Vote: Findings Lend Support to Fraud Accusations," New York Times, 8 November 2005, 3.

6 "Needs Assessment Report Ahead of Parliamentary Elections in Azerbaijan, November 2005" (Warsaw: Organization for Security and Co-operation in Europe [OSCE]/Office for Democratic Institutions and Human Rights [ODIHR], 17 June 2005).

7 "Statement of Preliminary Findings and Conclusions, International Election Observation Mission, Parliamentary Election, Republic of Azerbaijan, 6 November 2005" (OSCE/ODIHR), 11.

8 Jean-Christophe Peuch, "Alleged Plotters Confess on State Television" (Prague and Washington, D.C.: Radio Free Europe/Radio Liberty [RFE/RL], 30 November 2005). See also Rovshan Ismayilov, "Arrests of Entrepreneurs in Azerbaijan Likely Linked to Political Re-shuffle," EurasiaNet.org, 19 December 2005.

9 "Poverty Reduction Strategy Paper Progress Report: Joint Staff Assessment, Azerbaijan Republic" (Washington, D.C.: International Monetary Fund [IMF] and International Development Association [IDA], 12 August 2004), 3.

10 Anar Kazimov and Hafiz Hasanov, "Report on the Registration Procedure of Non-Governmental Organizations" (Baku: OSCE, 6 May 2005).

11 Miklós Haraszti, "Assessment Visit to Azerbaijan, Observations and Recommendations" (OSCE, The Representative on Freedom of the Media, 14 July 2005).

12 "Statement of Preliminary Findings and Conclusions" (OSCE/ODIHR), 8.

13 Ibid., 9.

14 Council of Europe Resolution 1358 (2004).

15 Elizabeth Fuller, "Candidates Benefit from More Media Access," RFE/RL, 30 November 2005.

16 Country Report (U.S. Department of State, 2005).

17 Ibid.

18 "Azerbaijani President Pardons Rebel Ex-Colonel, Other Political Prisoners," Newsline, Volume 8, Number 52, RFE/RL, 18 March 2004.

19 Fuller, "Azerbaijani Police Quash Rally in Capital," RFE/RL, 22 May 2005.

20 "Azerbaijan Police Crack Down on Protest over Activist," AFP, 23 September 2005.

21 Fuller, "Spy Scandal Continues to Raise More Questions than Answers," RFE/RL, 10 August 2005.

22 "Trafficking in Persons Report" (Washington, D.C.: U.S. Department of State, Office to Monitor and Combat Trafficking in Persons, 3 June 2005).

23 Country Report (U.S. Department of State, 2005).

24 Rufat Abbasov, "Azerbaijan:Famous Victory for Striking Oil Workers" (IWPR, Caucasus Reporting Service, No. 317, 6 December 2005).

25 "Entrepreneurs Confederation Chair Welcomes Judiciary Reforms," Financial Times Information, Asia Africa Intelligence Wire, BBC Monitoring, 5 July 2005; "Azeri Businessmen Welcome Dismissal of Top Judges," Financial Times Information, Asia Africa Intelligence Wire, BBC Monitoring, 21 April 2005.

26 "Report on the Situation of Lawyers in Azerbaijan" (Baku: OSCE and American Bar Association Central European and Eurasian Law Initiative [ABA/CEELI], March 2005), 1.

27 "Report from the Trial Monitoring Project in Azerbaijan 2003-2004" (Baku: OSCE/ODIHR), 14.

28 "Report on the Situation of Lawyers in Azerbaijan" (Baku: OSCE and ABA/CEELI, March 2005), 2.

29 Ibid.

30 Samira Ahmedbeyly, "Azerbaijan Lawyers Up in Arms" (IWPR, Caucasus Reporting Service, No. 264, 1 December 2004).

31 2006 Index of Economic Freedom, Azerbaijan report, Heritage Foundation, 2006.

32 "Large Scandal due to Participation of High-Ranking Officials of the Ministry of Interior in Kidnapping has Started in Azerbaijan," Turan Information Agency (Baku), 10 March 2005.

33 Henry Meyer, "Azerbaijan Revels in Oil Boom but Graft Keeps Much of the Country Poor," Associated Press, 31 October 2005.

34 Rovshan Ismayilov, "Azerbaijani Minister Fired, Allegedly Arrested for Coup Attempt," EurasiaNet.org, 19 November 2005, http://www.eurasianet.org/departments/insight/articles/eav101905a.shtml.

35 "TV Doubts Azeri Anti-Corruption Body to be Effective," ANS TV (Baku), BBC Monitoring, 25 April 2005.

36 "Azeri Police Foil Protest Against Corruption in the Education System," ANS TV, BBC Monitoring, 28 June 2005.

37 Rufat Abbasov and Gulnaz Gulieva, "Azerbaijan: Traffic Cops' Pay Raise Unlikely to Curb Graft" (IWPR, Caucasus Reporting Service, No. 306, 30 September 2005).

38 "Public Finance: Transparency and Efficiency,"No. 6, p. 36. Public Finance Monitoring Center, Local Government and Public Service Reform Initiative, Baku, 2005.