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AZERBAIJAN


  
  

 

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 7,124 6,090 5,600 102
         
GNI per capita
 US $ 810 710 650 146
Ranking is given out of 208 nations - (data from the World Bank)

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Update No: 329 - (01/06/08)

The shrinking treatment a la Russe
The Azeri governing circles are very worried at the moment. War could break out at any time between Georgia and Russia, which is assisting the breakaway regions of Georgia, Abkhazia and South Ossetia, to secede. This could have profound repercussions for their country.

The reason is the role of the Russians, who back the Armenians to the hilt in their running sore with the Azeris. They have just won one Caucasus war in Chechnya. There is nothing the Russian military - and high-ups in the Kremlin - would like better than another scrap in the Caucasus, and in Azerbaijan in particular. They could then encircle Georgia.

The Russian security forces are thick as thieves with the Armenians in their attempt to wrest their enclave, Nagorno-Karabakh, and a corridor through Azeri territory from it to Armenia, away from Azerbaijan. If emboldened by success in diminishing Georgia, they may, Baku fears, dish out the same medicine for Azerbaijan. 

The Azeri regime is using its phenomenal oil and gas wealth to up its military budget in preparation for renewed war. It boasts that it is already larger than the entire Armenian budget. Doubtless this is true, or could soon be so; but what matters is to compare its armed forces and their supplies, not with just those of Armenia, but those of its close ally, the largest producer in the world of oil and gas, Russia. 

The Azeri miracle
With oil prices soaring to $135 per barrel on May 22, Azerbaijan is poised to carry on doing incredibly well economically. Its GDP growth, according to official statistics, is of the order of 25-35% per annum, unheard of in history. 

Not only does it possess vast oil reserves, 31bn barrels at a conservative estimate, and huge gas reserves, it is the natural conduit for the entire oil and gas output of the Caspian Sea and export thereof to the West. But this is precisely what could be imperilled by war to its north, for the route lies through Georgia!

The Russian generals must be smacking their lips at the prospects opening up for them in the Caucasus. Many of them were personally enriched by the two Chechen wars, as the deceased General Lebed, the Russian peacemaker of 1996, inconveniently pointed out. 'Army surplus' has a habit of disappearing fast in wartime, the ideal alibi for missing items.

Azerbaijan's monetary reserves are given out officially as $9bn. They are almost certainly far higher than that - and held in private accounts of the ruling Aliyev clan in Switzerland and havens elsewhere. 

But there is certainly enough left to finance an arms build-up.

The oil curse
There is such a thing as 'the oil curse.' Countries with resplendent oil riches do not necessarily do well by the mass of the population - look at Saudi Arabia. Seventeen of the nineteen 9:11 suicide bombers came from there. Life clearly had less attraction for them than religious martyrdom. 

The Azeri masses are still mired in poverty. Meanwhile the nation’s elite lives it up in the high spots of the West - Corfu, Capri, California. Moreover the rulers have a well deserved reputation for falsifying election results. With effective control of the popular media, the police and the courts, they are unassailable within a civil society. 

This predicament cannot last indefinitely. A pre-revolutionary situation prevails, as Lenin would have put it. The Rose Revolution happened in Georgia next door in 2003. A ricochet of a revolution nearby may be nigh.

The Armenian option
An even more important neighbour for Azerbaijan is Armenia, as we have seen. It is in possession of 20% of Azeri territory, involving one and a half million refugees. A new war to seize back the lost terrain would be eminently popular. Why not use the massive oil wealth to build up an invincible army, wrest the lost lands back and bask in a victorious euphoria? The answer is in one word: Russia.

Armenia is not likely to alter its intransigent stance on Nagorno-Karabakh and related matters. The successor to President Robert Kocharian, hand-picked for the job, Sargasyan, is every bit as much a hawk on the issue as he is. They know that they can rely on Moscow - and its military. 
 
Go for peace and retrenchment
The wisest course for the elite in power in Baku would be to use their huge oil revenues to renovate their country. Should they succeed, Nagorno-Karabakh and its surrounds could fall into their lap in due course as supplicants. 

Economics should be allowed to prevail over lumpen local politics. 

The Kiev card
One way to keep Russia at bay is to cultivate good relations with Ukraine, a natural route for Caspian energy to Northern Europe. President Ilham Aliyev met President Victor Yushchenko of Ukraine in the Dom Gorodetskogo residence in Kiev on May 22. They discussed issues of cooperation in the energy, military and technical and humanitarian fields, just as an energy summit started in Kiev.  

The key issue on the agenda of the Energy Summit on May 22-23 was the initiative of Yushchenko in creating the Baltic-Black Sea-Caspian Energy Transit Commonwealth. Ukraine would benefit doubly, as both in receipt of new energy from the Caucasus and as the key transit country for energy flowing to states on the Baltic. But so thereby would Azerbaijan benefit hugely too, as both the source of Caspian energy itself and the natural route for others' energy to Ukraine and Northern Europe. 

The presidents in bilateral talks before the summit discussed opportunities for the construction of joint high-tech plant in Ukraine to refine Caspian oil, also and more ominously, the strengthening of military and technical cooperation and education of Azerbaijani servicemen in Ukrainian higher military schools.  

Yushchenko said he was hopeful that Azerbaijan would support the UN resolution on the mass famine (“Golodomor”) in Ukraine in 1932-1933. The Ukrainian President awarded his Azerbaijani counterpart with the First-degree Kniaz Yaroslav Mudri Order for his personal contribution to strengthening Ukraine-Azerbaijan relations.  

In his turn, Ilham Aliyev rewarded Yushchenko with the Heydar Aliyev Order for his special contribution to the development of friendly relations and cooperation between the Ukrainian and Azerbaijani peoples.  

Yushchenko stated that Ukraine-Azerbaijan bilateral relations were at a high level. He said the trade turnover between the two countries increased by 43 per cent last year and he expressed confidence that the meeting would give an impetus to new initiatives and ideas.

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