1. The Baku skyline at night
  2. Father of a nation
  3. An up-and-coming international destination?
  4. Sangachal
  5. "We agree with you, but please don't make any trouble"
  6. Operating in a difficult environment
  7. Check-up in Sangachal
  8. The future of Azerbaijan's resource autocracy
Photos by Eana Korbezashvili for Bankwatch

Azerbaijan

Land of fire and repression

Azerbaijan
Land of fire and repression

Home to one of the world’s oldest oil and gas industries, Azerbaijan has boomed since the fall of communism from the sale of its natural resources, largely controlled by the Aliyev family that has dominated the country’s political landscape for generations. Ultramodern neon constructions punctuate the evening sky, like the Heydar Aliyev centre – designed by renowned architect Zaha Hadid and awarded the 2014 Design of the Year by London’s Design Museum – and the Crystal Hall, which hosted the 2012 Eurovision song contest.

Larger than life, the memory of Heydar Aliyev lives on, ruler of Soviet Azerbaijan and former head of the KGB who became president for a decade following a coup in 1993. In January 2014, Suma Chakhrabarti, president of the European Bank for Reconstruction and Development and one of the most important investors in Azerbaijan, visited Baku and laid a wreath at the tomb of Heydar. Chakhrabarti is just one of many Western political and business leaders which have made a pilgrimage to Azerbaijan, an indication of the close ties built on coal and gas between the West and the Aliyev family.

Work continues on luxury condominiums in Baku’s White City, a new development that includes plans for an 18,000 person Olympic Village as part of the country’s bid to host the 2020 games. Along with Formula 1 races and the inaugural European Olympic Games in 2015, Azerbaijan is luring high-profile events to promote the country on the international stage. Critics however say that such development projects have led to the forced displacement of residents in Baku, in a country which already has more than one million internally displaced people.

Thirty kilometres southwest of Baku is the natural gas processing plant and oil production facility at Sangachal. The terminal is the start of the 1,700 kilometre Baku-Ceyan oil pipeline that stretches across neighbouring Georgia and exits Turkey on the Black Sea, where tankers wait to transport billion barrels of crude oil to refineries in Europe. Control of the Baku-Ceyan pipeline is the source of power for the Aliyev's and embodies the country's reliance on oil and gas exports to Western consumers. The signing of the ‘contract of the century’ by Aliyev, British Petroleum and ten international oil companies for the establishment of the Baku-Ceyhan pipeline marked its twentieth anniversary in September 2014.

Over tea locals discuss the increasing hostilities against the opposition in Azerbaijan. Because Azerbaijan is an important source of energy exports to Europe and emboldened by the ongoing political crisis in Ukraine, current president Ilham Aliyev has sensed that Europe's dependency on Azeribaijan will increase. As a consequence, Aliyev has ramped up intimidation and crackdowns on human rights defenders and dissidents --a crackdown which is also useful in the run up to a potential escalated conflict with Armenia over Nagorno-Karabakh. In recent weeks, a list of 98 political prisoners was published just days after the report's authors were imprisoned on trumped up charges. At the same time, the EU's ability to persuade any kind of reforms to Aliyev's domestic policies remains largely rhetorical.

Under a watchful portrait of Aliyev sits a city councilor in Sangachal, who during the visit praised the work of both BP and the Azeri government. Critics of the Aliyev regime face harsh repercussions, but some Sangachal residents remain vocal opponents of Aliyev’s pipeline deal, arguing that they bear the social and environmental brunt of the oil industry.

Residents in Sangachal have witnessed an increase in the number of congenital and respiratory diseases, which they attribute to the village’s proximity to oil and gas developments. They believe that BP has not lived up to its commitments to community development projects, like local workshops for women and a park for children to play in.

Near Gandja, the second-largest city in Azerbaijan located near the Georgian and Armenian borders, a man studies a document related to the proposed Trans-Adriatic pipeline. Planned to pass through the area, TAP is designed to bring gas from the Caspian sea via Greece and Albania to Italy and other Western European countries. But locals have already experienced the effects of oil and gas infrastructure – such as destruction of their homes and farmland – because they have been for years had the Baku-Ceyhan pipeline pass close to their houses. Despite opposition by locals, especially in Italy, the pipeline is likely to go ahead and it is one of the in infrastructure projects that the European Union has prioritised for financing in 2014. As one of the projects on the list of the EU's Projects of Common Interest, TAP is likely to benefit from accelerated access to financing from European public banks and via EU financial instruments.

Read more about these issues on the Bankwatch website.