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  2003 2002 2001 Ranking(2003)
Millions of US $ 7,124 6,090 5,600 102
GNI per capita
 US $ 810 710 650 146
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Principal ethnic
Azeri 90%
Russian 2.5%
Armenian 2%
Dagestani 3.2%
other 2.3


Azeri Manat

Ilham Aliyev

Ilham Aliyev

Update No: 298- (27/10/05)

Purge at the top; ministers accused of coup plot 
Tension was mounting in the build-up to parliamentary elections on November 6th. The president of Azerbaijan on October 20th arrested two cabinet ministers amid allegations of a coup plot, 17 days ahead of the elections. Ilham Aliyev, who inherited the presidency of the Caspian state from his father after a rigged election in 2003, also ordered the dismissal of five senior officials in the next few days. 
A spokesman for the interior ministry said Farhad Aliyev, the economic development minister, had been dismissed on October 19th and was later arrested, along with his brother, Rafik, the owner of the petrol giant, Azpetrol. The minister, who has long denied accusations he is secretly supporting the opposition, has been charged with plotting a coup attempt with the exiled opposition leader, Rasul Guliev. These two Aliyevs do not belong to the Aliyev clan of the president. The dismissal of Farhad Aliev is linked to his long-standing feud with the powerful customs chief, Kemalatdin Haydarov, analysts said.
On October 20th Ali Insanov, the health minister and one of the founders of President Aliev's ruling party, was also dismissed and reportedly arrested. It was not clear if this was related to the coup allegations, although the timing would suggest that it was. There were also reports that the government chief of staff, Akif Muradverdiyev, the minister for education, Misir Mardanov, and the minister of labour, Ali Nagiev, had been sacked.
Government prosecutors charged that Farhad Aliev had agreed to provide about £1.7m towards a coup attempt during meetings with the former finance minister Fikret Yusifov on Azpetrol premises. Tension in the capital Baku has grown in recent weeks as protests by opposition activists have been brutally dispersed by riot police.
President Aliyev has been under pressure to reform the authoritarian legacy of his father from the US and the EU, who seek more oil from the country. International observers have criticised preparations for the November 6th elections, which they say make it easier to fix the vote.
Eynulla Fatullayev, an analyst, said the cabinet ministers Insanov, Muradverdiyev, Mardanov and Nagiev were among the more conservative elements of the administration, and had been accused of being its most corrupt. "There is a complicated struggle for power between these men and the reformers around the president," he said. "In my opinion he may have arrested these people to try to raise popular support before the elections."
Mr Guliev, a former parliamentary speaker and the head of the Azerbaijan Democratic party, who is facing charges that he embezzled £70m in office, on October 17th attempted to fly to Baku to meet supporters. But police blocked access to the airport and detained hundreds, and his plane was diverted to Ukraine, where he was arrested on an Interpol warrant. On October 20th he was released and said he would return to London where he would lobby the EU and US over the elections. He said there were "absolutely no links" between him and the arrested Aliyev brothers.
"It is a complete crisis, and if the government does not realise how deep it is then it could turn into Kyrgyzstan," he said, referring to how protests drove the Central Asian state's president into exile in March. He warned that the apparent split in the ruling elite could lead to the "break-up of society".

Democracy under test
Azerbaijan is preparing for a November 6th parliamentary election.
In previous elections, the government used an arbitrary registration process to disqualify candidates it feared or disliked. The current parliamentary contest became a free-for-all after strong international criticism forced President Ilham Aliyev, son of his predecessor, Haidar Aliyev, to announce on May 11th what he called important electoral reforms. He eased the registration process and called for his regional representatives to remain neutral.
Many opposition politicians dismiss the changes as cosmetic. Despite its promise of free and fair elections, they note, the government has already used violence to break up political rallies, most recently on September 25th.
But a genuine spirit of competition in the campaign survives. More than 2,000 candidates have registered to vie for 125 seats in parliament, and in some districts, dozens of names are on the ballot. "This is an indication of the trust of the society with respect to free and fair elections," Mr Aliyev said in an interview.
The new openness has exposed rifts in the ruling New Azerbaijan Party. It has put forth a slate but hasn't prevented maverick members such as Mr Ibrahimov, one young party radical, from entering the race, standing in Gunahir.
Some younger members of the ruling party have sensed quiet encouragement from some top officials in Baku to run against established figures. In the interview, Mr Aliyev said there might be changes to the party's roster based on how well different members did in the run-up to the election. "I think the party list which we have already published is composed of the most popular candidates," Mr Aliyev said. "But maybe during the campaign we will have a different picture; then we will adjust ourselves to the situation."
"The struggle between the local power brokers and satraps and the president is the invisible real politics," said S. Frederick Starr, chairman of the Central Asia-Caucasus Institute of the Paul H Nitze School of Advanced International Studies at Johns Hopkins University. But others, he said, "are preoccupied with elections, the relation between the president and the parliament."
Asked about complaints of intimidation and meddling by his regional governors, Mr Aliyev said he had replaced many of them and denied there was a problem. He earlier issued a decree that the governors should remain neutral during the elections.
Others insist the regional governors still exercise almost dictatorial powers. "I am absolutely positive that complaints about Lankaran don't reach Aliyev's ears," Mr Ibrahimov, said. He said mail sent to the central government in Baku was opened in the governor's office and that the governor pressured him to withdraw from the race in Gunahir.
Balogian Mirzoyev, head of a small private television station in Lankaran and another candidate running against Mr Rajabli, Ibrahimov's opponent, is also battling the regional power structure. "If I try to report accurate information, about anything, the administration of Lankaran city will give an order to stop," he said. "They will order companies not to advertise, or they will order the electrical company to stop giving power to the station."
Mr Mirzoyev said he, too, had been personally pressured by local authorities to drop out of the race.
Candidates in other regions described in interviews similar flouting of the presidential directive for neutrality. One entrepreneur, Fatimat Agamireyeva, said she was forced to run in neighbouring districts out of fear of retaliation by local officials against her carpet business. Candidates said they feared for the safety of their campaign workers, that posters were routinely ripped down by local police, and that local authorities threatened their jobs and the jobs of their family and friends. Another candidate, Igrar Jaberov, also from Lankaran, said he was promised a job if he dropped out.
In Kargolan village, near Lankaran, an opposition party member who questioned Mr Rajabli at a meeting about high rates of unemployment in the district said he was physically roughed up and removed from the premises. That member, Sabir Aliev, is now supporting Mr Ibrahimov.
According to Mr Mirzoyev and other Lankaran candidates, Mr Rajabli and his allies in the regional administration are using the new registration process (only 450 signatures are required to get on the ballot) to line up candidates from prominent local clans, Mr Mirzoyev called this a gambit, to be followed by the candidates dropping out of the race in the final days of the campaign and throwing their votes to Mr Rajabli. With 16 candidates competing in a district with about 29,000 voters, the 300 to 400 votes of a single family group can mean victory for a candidate.
In an interview in the parliament building in Baku, Mr Rajabli dismissed complaints from his challengers. He said any pressure on candidates to drop out was natural in political life.
In Gunahir, Mr Ibrahimov assured the villagers he would stay in the race. He suggested they challenge, if necessary, any tampering. He painted the current election as the last chance for Azerbaijan to reform before increased oil revenues brought the possibility of yet more corruption and an even more entrenched elite in Baku.

Parties and blocs to dominate Azerbaijan's parliamentary poll
With more than 2,000 contenders registered for the upcoming parliamentary elections, observers are predicting a heated campaign. Despite an unprecedented number of independent candidates, long-standing political parties are dominating the campaign. It is within the ruling Yeni Azerbaijan Party, that few doubt will win, that the regional satraps, who all belong to it, are so important. 
The others are hoping to put down their own markers for the future, with more countryside politics in mind. This is the first election since the Rose Revolution in Georgia next door, which was the outcome of a disputed presidential election. It is the next presidential election in Azerbaijan that everybody is preparing for as the vital one to determine the country's future.
Cooperation and coordination could prove pivotal in determining the composition of the next parliament. The opposition is relying on election blocs, while many independent candidates have united into loose alliances to boost their competitiveness against the governing party. 
The November 6 parliamentary vote will be the first since the country's 2002 constitutional referendum, which abolished the proportional election system. Candidates will compete instead for single-mandate seats. To date, it is also the first election in Azerbaijan's post-Soviet history in which candidates - including two political exiles -- have been able to register with relative ease. Three political parties and blocs are dominating the campaign: the ruling Yeni Azerbaijan (New Azerbaijan) Party, the opposition Azadlig (Freedom) alliance, comprising the Popular Front Party of Azerbaijan, Musavat Party and Democratic Party of Azerbaijan, and the Yeni Siyaset or YeS (New Policy) bloc. 
As of late September, some 2,037 candidates were registered for the November 6 vote, the newspaper Ekspress quoted the Central Election Commission as saying. Between them, these three parties and blocs are running some 300 candidates. More than 1,500 individuals are running as independents. A host of smaller parties (Alliance for Azerbaijan, Hope Party, Pro-Azerbaijani Forces and others) each with fewer than 60 candidates, makes up the rest. 
An assortment of alliances, often with the words "new" or "reforms" as part of their names, has emerged to promote the interests of these so-called "non-partisan" candidates. Experts believe that these groups are intended to appeal to voters who are disappointed by both the ruling party and the traditional opposition powers, as represented by Azadliq and YeS. 
While Azadliq makes no secret of its desire for a complete change of political leadership, the ruling YAP is campaigning with a message of preservation of Azerbaijan's economic gains since the early 1990s and gradual reform. 
The ruling party's candidate list, the last to be published, has generated considerable controversy. The delay in publishing the list prompted speculation that YAP was concealing an alternative list of candidates who would enjoy the government's actual support. While the party maintains that is interested in reform, its best-known candidates are not names normally associated with progressive change, some analysts say. Perhaps the YAP candidate most likely to attract attention is Mehriban Aliyeva, Azerbaijan's first lady, who enjoys considerable popularity for her charitable work. Well-known hard-line parliamentarians -- including Ahad Abiyev, Musa Musayev and Jalal Aliyev, the uncle of President Ilham Aliyev -- also headline the party list. 
Ironically, in some constituencies in which YAP faces stiff competition from an opposition candidate, the party is running candidates deemed relatively weak or untested by local analysts. Several pro-opposition observers believe that the Aliyev administration is willing to concede a few seats in parliament to the opposition out of a desire to prevent the possibility of election-related unrest. Others argue that the YAP candidate list has been designed primarily to address internal party disputes. "It is clear that the list was designed to subdue internal conflicts in the Yeni Azerbaijan Party," YeS leader Eldar Namazov, a former presidential aide, commented. 
One YAP candidate disagrees with the criticism of the party's roster of candidates. "This list includes former MPs and new names as well as those who have great merits within the party. If the list would include only nationally known personalities, it would prevent regional party members from getting a chance to become better known," commented Aydin Mirzazade, a candidate running from the 47th Mingachevir constituency outside of Baku. "We are the strongest party and the list shows that." 
In a significant number of constituencies, many so-called "independent" candidates are YAP members running without the party's official backing. Truly independent candidates argue that they are having a difficult time competing. Under Azerbaijani election law, parties or alliances must have more than 60 candidates running in the elections to qualify for free access to state-run national television. That rule applies to only four of the parties and alliances running in this November's election: YAP, Azadliq, YeS and the Azerbaijani Liberal Party. 
To maintain a foothold in the campaign, many independent candidates have forged alliances to share resources. The groups range from a bloc for media professionals to an alliance of economists. While individuals can donate no more than US$590 to an independent candidate, and legal entities only US$11,800, independent candidates sponsored by an election alliance or political party can receive up to US$59,000 for campaign expenses from the alliance or US$29,500 from a political party, stated Alasgar Mammadli, an expert on electoral law. 
The advantages to be had from collaborative campaigning are illustrated by Azadliq, the tripartite opposition bloc that has been the most outspoken against YAP. According to Ilgar Mammadov, an independent political analyst and a non-partisan candidate in the elections, the bloc's list of 115 candidates underscores its political unity. The bloc's three participating parties -- Musavat, the Popular Front and Democratic Party of Azerbaijan -- agreed on 33 nominees each, with primaries deciding candidates for the remaining 16 constituencies that Azadliq is contesting. 
According to Mammadov, the bloc's wish to have an equal number of candidates resulted in a sacrifice of quality in some cases. "The best example is the Sabail-Nasimi constituency [in and around Baku's Old City], where Rasim Musabekov, a Musavat member and political analyst with a great chance to win, was opposed by the Azadlig nominee Zamina Dunyamaliyeva, a little-known member of the Democratic Party," he said. Adding to the complications: Musabekov will run as an "independent" candidate rather than as a member of the Azadliq bloc, meaning that he does not qualify for bloc-supplied campaign funds and assistance. 
Popular Front Deputy Chairman Fuad Mustafayev, however, argued that any loss of quality was a small price to pay for uniting Azerbaijan's three largest opposition parties for the November 6 vote. "The long-awaited alliance is designed for long-term purposes. We had to move from an autonomous existence to co-existence," Mustafayev said. 
According to YeS leader Eldar Namazov, an even broader alliance that included YeS would have improved the opposition's chances at the polls. "It would be better if the alliances would come up with single opposition lists," he said. "However, the Azadlig leaders failed to reach a common decision on uniting with other opposition groups." 
The YeS alliance, formed in April 2005, was originally expected to be a "third force" that could attract voters disappointed by the traditional opposition and the government. The bloc has since veered much more strongly toward the opposition. The alliance's platform, titled "From Authoritarianism to Democracy, From Corruption to a Legal State," is highly critical of the Aliyev administration. 
"All our candidates support the ideas described in the document," said Namazov. "They desire political and economic reforms." However, Mammadov argued that the lack of time between YeS's foundation and the elections meant that few of the bloc's 69 candidates, apart from Namazov and Etibar Mammadov, leader of the National Independence Party, are strong candidates. "Most of them are people with a communist nomenklatura past. The quality of the YeS alliance is lagging behind both the YAP and Azadlig lists," Mammadov said. 
Namazov countered that those candidates believed to be holdovers from the Soviet past are professionals with considerable experience in administrative management. "The members of [first Azerbaijani President Ayaz] Mutallibov's [last President Abulfaz] Elchibey's and [late President Heidar] Aliyev's cabinets are among our nominees. It shows that our alliance is based not on enmity, but on reconciliation." 
Former President Ayaz Mutallibov, arguably YeS's best known candidate, now in exile in Russia, is expected to face a difficult race against Lala Shovket Hajiyeva, leader of the Azerbaijan Liberal Party. The Liberals are running 65 candidates, most of them little known. However, experts believe that Hajiyeva's reputation for avoiding negative campaigning could result in considerable gains for the party at the polls.

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AIOC oil production up 83.5% in Jan-Sep 

Azerbaijan International Operating Company (AIOC), the operator for the Azeri-Chirag-Gunashli project in the Caspian Sea, produced 8.71 million tonnes of oil at Azeri and Chirag fields in the first nine months of the year, up 83.5 per cent year-on-year, a company source said, Interfax News Agency reported.
Production at Chirag totalled 5.239 million tonnes and production at Azeri totalled 3.467 million tonnes in January-September 2005, the source said. AIOC produced 563,400 tonnes of oil at Chirag in August and 772,500 tonnes at Azeri. AIOC exports in January-September of the current year totalled 7.512 million tonnes, up 65.75 per cent year-on-year.
It exported 5.157 million tonnes of oil along the Baku-Supsa pipeline, 1.683 million tonnes in the Baku-Novorossiisk pipeline, and 671,500 tonnes by railroad to Batumi Port.

Naku proposes SOCAR, Rafi Oil PSA

Azerbaijan's parliamentary commission on natural resources, energy and ecology on September 19th recommended a production sharing agreement (PSA) for the Surakhany field signed by Azeri state oil company SOCAR and Rafi Oil of the United Arab Emirates for ratification by the parliament, Interfax News Agency reported.
"The contract was signed on August 16th and is the 25th contract for developing oil fields in Azerbaijan.
The property has an area of 13 square kilometers," Asya Manafova, the commission's head, said in parliament. It is anticipated that the parliament will soon ratify the PSA, the report said.
Manafova said SOCAR would have a 25 per cent interest in the project and that Rafi Oil would have 75 per cent. The contract states that oil production at the field should rise 50 per cent in two years. Rafi Oil will finance SOCAR's stake in the project until it doubles the current rate of extraction. Rafi Oil must also pay a bonus of one million Euro and present SOCAR with a working programme on the field's development within 90 days. SOCAR will have the right to sever the contract if Rafi Oil does not start exploration within two years.
This is initially a 25-year PSA with the possibility of a five-year extension. The field, which first went into production in 1904, has 6.8m tonnes of oil left in it, Manafova said.
She said, 2,300 wells had been drilled at Surakhany, which produced 115.6m tonnes of oil between 1904 and the start of this year. At present, 230 wells operate at the field.
Manafova said a flat profit tax rate of 24 per cent would apply for the duration of the PSA. Rafi Oil plans to invest 400m Euro in the field.
This includes 100 million Euro during the initial stage to renovate existing infrastructure new technologies and other areas.
Rafi Oil estimates that Azerbaijan will earn 921m Euro from the contract if oil prices average at 49 Euro a barrel. Rafi Oil intends to increase oil production at the field from 95,100 tonnes in 2004 to 257,000 tonnes in 2014.
The field produced 58,400 tonnes of oil and 10.5m cubic metres of gas in the first half of the year.

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EBRD lends 100 mln Euro for Azeri roads 

The European Bank for Reconstruction and Development will provide a 100 million Euro loan to Azerbaijan to rehabilitate and upgrade a section of the main north-south road that links Russia and Iran with the capital, Baku, New Europe reported.
The loan follows the Bank's first road project with Azerbaijan that was signed in July last year to finance improvements to the main east-west highway across the country, which forms part of the historic east-west Silk Road to Central Asia. Both projects will help restructure the road sector, run by the ministry of transport's road transport services department. "Developing the country's road network is a priority for the government of Azerbaijan, with the long term benefits being enhanced trade and regional development," said Azerbaijan's transport minister, Ziya Mamadov. Azerbaijan asked EBRD and a number of other financiers to participate in financing the north-south road corridor from Astara to Samur (on the border with Russia).

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