Baku Oil Dynasty Vying With Iran Shaken by Facebook Rallies

After rioters in Azerbaijan burned down a hotel owned by a son of one of President Ilham Aliyev’s ministers, the government blamed the violence on “destructive forces” -- including presidential challenger Ilgar Mammadov.

Mammadov, selected today as the Republican Alternative movement’s candidate for the October contest, says the real culprit is the Aliyev dynasty itself, which has run the former Soviet oil province of 9.3 million mainly Shiite Muslims for most of the past 44 years.

“Uprisings may be provoked by minor incidents but they reflect huge grievances concerning this corrupt and dysfunctional system,” Mammadov, 42, said in an interview in Baku on Jan. 30, less than 12 hours after being summoned to police headquarters for questioning over the Jan. 23-24 riots. He was detained again yesterday, charged with inciting unrest and will remain in custody for two months awaiting trial, Erkin Qadirli, head of the REAL movement’s assembly, said by phone.

Aliyev, 51, has forged alliances with countries such as Israel and Turkey, steering a pro-Western course while keeping former imperial masters Iran and Russia at bay after he succeeded his father a decade ago. He’s stymied all but a handful of protests since the Arab Spring swept away regimes across the Middle East, including in Egypt, one of a dozen countries where he erected a statue of his father, Heydar.

The younger Aliyev won the presidency in 2003 with 77 percent of the vote and in 2008 with 87 percent -- contests international observers deemed neither free nor fair.

Facebook Dynamics

For this year’s election, though, the “dynamics” have changed, said Mammadov. In a country where all major media outlets are state-run or pro-government, social networks such as Facebook Inc. (FB), with almost 1 million Azeri users, are the best way to gauge public opinion and people are expressing more frustration toward the government, he said.

“Tensions are rising,” Mammadov said. “There is a real threat to Aliyev’s rule.”

Elnur Aslanov, head of the political analysis and information department of the presidential administration couldn’t be reached on his office phone for comment over two days and didn’t reply to e-mail.

Police quelled the uprising in Ismayilli, northwest of Baku near the Russian border, with water cannons and rubber bullets, prompting 5,000 people to sign up on Facebook for a rally in the capital the next day. Police thwarted that demonstration by sealing off the city center and arresting dozens of people amid chants of “get your guns off us.”

Political Arrests?

As the hotel burned and his forces deployed water cannons, Aliyev was in Switzerland, touting in fluent English his economic achievements to global leaders and potential investors at the World Economic Forum in Davos.

Buoyed by $35 billion in investment from BP Plc-led oil companies and a U.S.-backed pipeline linking the Caspian and Mediterranean seas, Aliyev has tripled crude production and the size of the economy along with it. He’s done so, though, in increasingly dictatorial and corrupt fashion, stifling media and jailing and harassing political opponents, according to watchdog groups including Amnesty International, Reporters Without Borders and Transparency International.

While Azerbaijan’s credit is considered investment-grade by all three major rating companies -- Moody’s Investors Service puts it alongside Iceland, India, Indonesia and Spain at Baa3 -- the country fares worse in terms of corruption and free speech.

Russia, Iran

Reporters Without Borders ranks Azerbaijan 156th of 179 for press freedom, worse than Afghanistan, Iraq and Myanmar. It’s tied at 143rd with countries including Belarus, Russia, Nigeria and Uganda in Transparency International’s Corruption Perceptions Index.

Amnesty International last month urged the Council of Europe to pressure Azerbaijan to “cease arresting and prosecuting peaceful protesters.” While the Interior Ministry put the number of detainees from the Ismayilli riot at 62, Amnesty International said the real figure was in the hundreds “and there have been allegations of torture in detention.” Officials in Baku have denied that.

Aliyev’s difficulties extend beyond the borders: He’s under increasing pressure from his largest neighbors -- Russia to the north and Iran to the south.

Russia has pushed Azerbaijan to join the Moscow-led Customs Union of former Soviet states, overtures Aliyev has resisted. He essentially evicted the remaining Russian troops on Azeri soil last year by insisting on a 43-fold increase in rent for the Gabala radar base. Russia rejected Aliyev’s $300 million-a-year demand for the listening post, which had a surveillance range that reached into the Indian Ocean, and withdrew its personnel.

Gazprom Snub

Aliyev has also rebuffed proposals from OAO Gazprom, the Russian gas exporter that has a quarter of Europe’s market, to buy all the gas Azerbaijan plans to produce at its giant Shah Deniz field from 2018. He opted instead to commit future deliveries to the Trans-Anatolia, or Tanap, link to carry the fuel to Europe via Turkey. State Oil Co. of Azerbaijan, or Socar, which holds 80 percent of Tanap, plans to start building the pipeline this year and complete it in 2017.

An even bigger geopolitical threat for Azerbaijan is Iran, which considers Azeri allies Israel and the U.S. its mortal enemies, said Brenda Shaffer, a former research director of the Caspian Studies Program at Harvard University’s Kennedy School of Government and visiting professor at the Azeri Diplomatic Academy in Baku.

Eurovision Accusations

Iran, where as much as one-third of the population of 75 million is ethnic Azeri, has repeatedly called for Aliyev’s ouster via radio and television broadcasts beamed across the border. Azerbaijan last year jailed dozens of its own citizens for allegedly being Iranian proxies plotting a wave of terror attacks on western and Israeli targets in Baku.

Azeri officials said the conspiracy was designed to interrupt the annual Eurovision song contest, which Baku hosted for the first time last year. Iran recalled its ambassador in protest after Baku was named host city, saying via state television that Europe’s most-watched music competition was an immoral event that would include a “gay parade.” Recent concerts in Baku by western stars including Elton John, Jennifer Lopez, Shakira and Rihanna elicited similar reactions from Iran.

“Tehran has always sought to destabilize independent Azerbaijan and to prevent its prosperity,” Shaffer said. “Iran fears that Azerbaijan will be a source of inspiration for its own ethnic Azeri minority.”

Israeli Drones

Israel, which has called for military strikes to halt Iran’s nuclear program, is a major arms supplier to Azerbaijan and one of the largest recipients of Azeri crude. Aliyev said without elaborating last year that Azerbaijan had bought “high- tech missile-defense systems and drones” from Israel and the Associated Press reported a year ago that Israel had signed an agreement to sell $1.6 billion worth of arms to Azerbaijan, citing unnamed Israeli defense officials.

Iran has accused Aliyev of using the unmanned aircraft to help Israeli espionage efforts, a charge his government has denied.

Any military attack on Iran would be a “nightmare” for Aliyev because it could generate “huge” refugee flows into Azerbaijan, Matthew Bryza, the U.S. ambassador in Baku in 2011- 2012, said by e-mail.

“Such a flow of refugees could be a nightmare for Azerbaijan and jeopardize what they see as their economic miracle,” he said.

Another nightmare is unfolding back home that Aliyev must deal with now, said Camil Hasanli, a professor of history at Baku State University and a member of the Forum of Intellectuals opposition group. People are demanding more personal liberties, fairer courts, less corruption and a larger share of the nation’s wealth, Hasanli said by phone.

“People are angry, they want justice and cannot find it,” Hasanli said. “The Ismayilli events will be replicated in other regions tomorrow because there is no life beyond Baku. You cannot subdue citizens by the gun.”

To contact the reporter on this story: Brad Cook at bcook7@bloomberg.net

To contact the editor responsible for this story: Hellmuth Tromm at htromm@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.