Azerbaijan Update

21 October 2008

INTRODUCTION

After the long-lasting years of rule by President Aliyev, ended by his death in 2003, his son took over the scepter in both the ruling party (YAP) and the country. Illham Aliyev started his term in October 2003 by cracking down the opposition that was protesting his undemocratic election. The latest presidential elections of Octber 15th 2008 seem to have gone by more peacefully. The voting day itself was judged as largely up to international standards by international observers. However, the period leading up to the elections did not give the opposition enough of an opportunity for campaigning and getting their message out there. The opposition itself was also very divided over the issue of whether or not to boycott the elections, making it appear weak. The country is also still burdened by the deadlocked conflict with Armenia over Nagorno-Karabakh and widespread corruption. The latest parliamentary elections on 5 November 2005 were marred by fraud and did not bring any democratic changes.

ELECTIONS AND POLITICAL SITUATION

The president
Azerbaijan has a strong presidential system of government with a weak separation of powers. The Azerbaijani Constitution empowers the president to appoint and dismiss the government. Following the countries independence, President Heydar Aliyev, a former Soviet communist leader, was elected in 1993. He ruled the country with his New Azerbaijan Party (YAP) with strict hand, leaving little room for freedom and democracy. YAP has maintained its absolute majority after the marred 2000/2001 and 2005 elections. Just two weeks before the presidential election of October 2003, he stepped down for health reasons. By then the candidature of his son, Ilham Aliyev, had already been arranged. On 12 December 2003 Heydar Aliyev died in a hospital in the United States. Ilham Aliyev won the election with a landslide victory (77% of the votes). Ilham Ailyev also went on to win the 2008 presidential elections with another landslide victory: 86.73%.

International observers called the recent presidential elections an improvement compared to past elections – described as a missed opportunity for a credible democratic process by the OSCE - as well as other countries in the region, but regretted the lack of competition in the run-up.

After winning the election, the president’s office announced that het president would be cooperating with those parties that participated in the elections. Whether this will be true will become clear in the coming months and years. After the last presidential elections analysts were expecting that Ilham Aliyev would replace some officials, who were accused of corruption, by some younger reformists. However, his policy remained very much the same as that of his father and no major reshuffles took place. However, Illham Aliyev’s ability to control his government has reached less far then that of his predecessor. Government officials are accusing each other of corruption and even in the New Azerbaijan Party some divisions became apparent. The divisions run along traditional regional dividing lines or clans, but also within these clans fragmentation is occurring as a result of different financial interests.

The run up to the 2008 presidential elections

In the period preceding the 2008 presidential elections the biggest issue facing the opposition was the question of possible unification in the face of an all-powerful incumbent presidential candidate. The opposition parties were facing many difficulties in campaigning. Central venues for rallies were often denied, there was a great lack of press freedom making it hard to argue one’s point in public, human rights were still often violated with journalists ending up in jail and the authorities refusing to adhere to international calls for their release etc. Combined with the parties’ doubts concerning their participation in the presidential elections, their position was quite weak.

The assessment of the parties’ chances by the parties themselves was also quite diverse. Some, like the Great Creation Party, believed their chances would be real if the elections are held in a democratic fashion. Others, like the Social-Democratic Party of Azerbaijan believed that in the current working conditions no opposition candidate had any chance of winning the presidential elections. Social-Democratic Party chairman Araz Alizade in fact stated: “Candidates should join the elections with a good election campaign and strategy, and have sufficient financial grounds. There is not a single person among the Azerbaijani opposition, whom people trust. The opposition has no finances. The opposition leaders have no team, therefore, Ilham Aliyev is a favourite in the presidential race".

In May amendments to the law of Freedom of Assembly were passed. The amendments were strongly disapproved by the opposition parties with criticism ranging from the amendments being merely cosmetic and not changing anything, to the amendments actually being even more restrictive.
In June Electoral Code Amendments were passed by the parliament, diminishing the campaigning period by 45 days (120 to 75). This was also criticised by the opposition. The OSCE also issued a statement that that specific amendment was not included in the draft proposal of the Electoral Law Amendments put forward by the presidential administration to representatives of the Venice Commission, Human Rights Bureau and democratic institutions of OSCE and IFES.

In the end, parties that decided to boycott the elections included the Social Democratic Party, Musavat, the Popular Front of Azerbaijan Party, the Liberal Party of Azerbaijan, the public forum For Azerbaijan, and the Citizen and Development Party.

In October, just 10 days before the elections, a new party was established: the Popular Socialist Party. Due to the lack of time the party decided not to participate in these elections, but expressed hope to participate in the next ones.

2008 Presidential Elections results

Candidate	Party	Votes %
Ilham Aliyev	Yeni (New) Azerbaijan party	88.73
Igbal Agazade	Umid (Hope) Party	2.86
Fazil Gazanfaroglu	Great Creation Party	2.47
Qudrat Gasanguliyev	Unified Popular Front Party	2.28
Gulamgusein Alibeili	independent candidate	2.23
Fuad Aliyev	Liberal Democratic Party	0.78
Khafiz Gadzhiyev	Muasir (Contemporary) Musavat Party	0.65

The election day itself was judged peaceful. Many international observers spoke of great improvements of the election process compaired to previous years as well as to other countries in the region. Head of the CIS Parliamentary Assembly mission Svetlana Orlova described the elections as largely “legitimate, open, and transparent”. US Department of State spokesperson Sean McCormack also stated that “the assessment of the monitors on the ground was that it was an improvement over past elections”, but added that he is awaiting the final report of the Organisation for Security and Cooperation in Europe (OSCE) before making any official statements.

The OSCE issued a statement concerning the elections on October 16th saying that " the election was conducted in a peaceful manner, but was characterized by a lack of robust competition and vibrant political discourse facilitated by the media, and thus did not reflect all principles of a meaningful and pluralistic democratic election”. Andres Herkel, Head of the Parliamentary Assembly of the Council of Europe (PACE) delegation, agreed, saying that “while the voting day can be generally viewed positively and described as marking considerable progress, election observation is done against a broader background of human rights, democracy and the rule of law. In this connection, the issue of freedom of the media in Azerbaijan remains a source of further concern".

Marie Anne Isler Beguin, Head of the European Parliament delegation, also mentioned "a lack of genuine competition, due to the boycott of major opposition parties”, and noted that “the absence of a real campaign [has] to be deeply deplored".

Concerning the latter point, the OSCE report notes that the authorities “made efforts to create more equitable conditions for candidates, and the election was organized in an overall efficient manner, although shortcomings were observed on election day, in particular during the crucial phase of the vote count and tabulation”. Furthermore, “the campaign was generally low-key, with the incumbent candidate not campaigning personally, and other candidates commanding little apparent public support”.

Aftermath

In the aftermath of the elections, chief of the public policy department of the presidential administration Ali Hasanov stated that the authorities will cooperate with those opposition parties, that took part in the presidential elections held on 15 October. "If opposition parties want to exist as a political power and want their opinion to be taken into account both by Azerbaijani society and institutional organization, they must take part in the elections, held in the country", noted Mr Hasanov. Otherwise, their "place will be occupied by other opposition parties". As for the non-participation of a part of opposition in the elections, Hasanov noted that it is not the fault of the Azerbaijani government, "it is their own fault". "From the very beginning, the opposition has rejected participation in the elections, as it knew it would be defeated", said the chief of department.

The run up to the 2005 parliamentary elections
On 6 November 2005 parliamentary elections took place in Azerbaijan. They were the first since President Ilham Aliyev replaced his father, Heydar Aliyev, in 2003. These elections were seen as an important test for democracy.

In the run up to the elections two main opposition blocks were formed. Seven months for the elections the leaders of the opposition Musavat and Democratic parties and the progressive wing of the divided Azerbaijan Popular Front Party (AHCP) announced their alignment, which was later named Azadliq (Freedom). The bloc is grouped around the personalities of Musavat head Isa Qambar, and chairman of the AHCP progressive wing, Ali Kerimli. Both men, and also the Democratic Party, are for democratic changes and are pro-Western in their political orientation.

Rival opposition parties and individuals, including the Movement for National Unity, the National Independence Party of Azerbaijan, the Civil Forum for the Sake of Azerbaijan, and the Azerbaijan Social Democratic Party formed the “New Politics” bloc (YeS).

Another opposition party, which fielded a substantial number of candidates, was the opposition Liberal Party of Azerbaijan.

Though OSCE called the registration process “inclusive and a significant improvement over previous parliamentary elections”, reportedly later many candidates were pressed by threats of criminal prosecution, tax investigation and closures of businesses owned by candidates and their families, to withdraw.

The ruling YAP party dominated the campaign. Media was biased and privileged the ruling party and candidates supporting president Ilham Aliyev. Moreover, observers received reports of detentions of opposition candidates and their relatives. Opposition candidates were confronted with harassment when meeting the voters or distributing leaflets. According to the OSCE the government imposed “disproportionate restrictions” regarding rallies. In the run up to the elections several rallies were broken up violently, after which numerous injuries and detentions were reported.

Election results
Of the total of 125 seats to be divided, the ruling New Azerbaijan Party (YAP) has won 56 seats compared to the opposition with just about 10. The rest of the votes went to independent candidates and small satellite parties, largely supporting the ruling regime. The Central Election Commission (CEC) said that turnout was 42,2%.

Affiliation	Number of Elected Candidates
New Azerbaijan Party (YAP)	56
Independent	40
Musavat	5
No party affiliation	3
Ana Vatan	2
Civil Solidarity Party	2
Ümid Party	1
Social Prosperity Party	1
Popular Front of Azerbaijan (PFPA)	1
Azerbaijan Democratic Reforms Party	1
Whole Azerbaijan Popular Front	1
Great Creation Party	1
Civic Unit Party	1
Total	115

Azerbaijan's political opposition claimed the 6 November elections were fraudulent and called for repeated elections. International observers supported their judgment. Numerous violations of the electoral code were reported, such as boxes being stuffed with pro-government ballot papers, multiple voting, and intimidation of opposition supporters. Furthermore, during the counting of votes, there was interference of third parties and disagreement on the counting procedures. Though Ilham Aliyev admitted there were some problems, he stated to be generally satisfied with the process of the elections.

Aftermath
Following the critiques, the Central Election Commission annulled results in ten constituencies. In these districts repeated parliamentary elections will be held 13 May 2006. Opposition groups, not longer backed by international observers in their plea, found this an inadequate response, and staged several street protests of up to 20,000 people. The police violently broke up rallies, and particularly after the demonstration on 26 November injuries and detentions were reported.

The 26th of November also marked the start of the falling apart of the opposition due to conflicts over strategy and tactics. While AHCP chairman Ali Kerimli called upon the protesters to stay on the square and build tents, in an attempt to provoke another “coloured revolution”. Musavat chairman Isa Qambar did not agree with this idea. Qambar feared what actually did happen: the people were not ready for such a change, the demonstration ended violently and as a consequence it would be even harder to organize mass protests afterwards.

After the Parliamentary Assembly of the Council of Europe (PACE) had accepted the credentials of the new Azerbaijani delegation and calls of the Council of Europe and the United States, Musavat decided not to boycott the parliament and to take part in the repeated elections on 13 May. This led to more conflicts in the Azadliq bloc, as the other parties and Ali Kerimli in particular are in favour of a boycott and find that the move of Musavat indicates they are legitimizing the November election results. Qambar says his party does not recognize the legitimacy of the newly elected parliament, but will occupy the four seats it officially won. Beginning of February 2006 Musavat announced to quit their alignment with the Azadliq bloc. Ali Kerimli said the bloc will search for new partners.

Summarising one can say that the 2005 parliamentary elections did not bring any fundamental changes to Azerbaijan. The president, YAP, and his satellite allies still possess the power, while the opposition failed to gain substantial support. The repeated elections on 13 May 2006 are the next important test for democracy in Azerbaijan.

The repeated elections of 13 May 2006
On 13 May 2006 the elections for the 10 remaining seats were held. In the period for the elections a dispute over whether or not to participate in the repeat elections caused a split within the Azadliq Bloc, Azerbaijan’s radical opposition movement. Most parties, including the Popular Front Party of Azerbaijan (PFPA), opted to boycott the repeat voting. Meanwhile, the Musavat Party decided to participate, but did not gain any seats.

The PACE election observation mission noted "improvements in voting process", the delegation’s head, Leo Platvoet, said at a news conference in Baku on 14 May. The statement did noted that the voters were deprived of a "pluralistic choice" because of the boycott carried out by most main opposition parties. Meanwhile, a statement issued 15 May by the OSCE’s Office for Democratic Institutions and Human Rights (ODIHR) called the vote “a welcome step toward increased transparency”. The ODIHR assessment stated that “while the partial repeat parliamentary elections reflected some improvements, such as an inclusive candidate registration, a largely unimpeded campaign, and increased opportunities for participation of domestic observers, the overall conduct of the process underscores the continuing need for electoral reform. There were several issues of continued concern, including the composition of election commissions, instances of interference by local authorities in the election process, de-registration of candidates, and the handling of complaints and appeals by election commissions and courts”.

Preliminary totals showed the governing Yeni Azerbaijan Party (YAP) winning five of the 10 seats up for grabs. Non-partisans won three races, while the remaining two went to representatives of what is considered the loyal opposition, Ilyas Ismayilov, the leader of the Adalat (Justice) Party and Fazail Ibrahimli, a former MP and deputy chairman of Civil Solidarity Party. None of the newly elected MPs were women. The average turnout was 36.5 per cent. Of note, while 3.4 per cent of the ballots were deemed invalid overall, four polling stations had an unusually high proportion of invalid votes. The YAP now controls 61 seats in the 125-seat Azerbaijani parliament. Nominal independents, many of whom have connections to President Ilham Aliyev’s administration hold the bulk of the remaining seats. Radical opposition parties have only a token presence in parliament.

Results repeated parliamentary elections of 13 May 2006

Party	Seats
New Azerbaijan Party (YAP)	5
Independent Candidates	3
Adalat Party	1
Civil Solidarity Party	1
Total	10

The next elections in Azerbaijan are the presidential elections, which will be held on 15 October 2008.

Government
The coalition headed by the New Azerbaijan Party (YAP), a party aligned with President Aliyev, retained a majority of seats in the legislature in the 2005 elections. However, the main power lies with the President, who forms the Cabinet of Ministers.

The highest executive body is the Cabinet of Ministers appointed by the President. The Prime Minister, appointed by the President, is head of government. On April 10, 1997, President Aliyev issued a decree setting up a National Security Council under presidential authority. The Security Council “provides the conditions for the realization of the constitutional authorities of the President on the protection of people rights and freedoms, independence and territorial integrity of the Republic of Azerbaijan”.

The current Prime Minister, Artur Rasizade was appointed on July 20, 1996. The entire Cabinet tendered its resignation on 20 October 20 to the newly re-elected President Aliyev, as required by the Constitution. Rasizade was reappointed on 23 October 1998, as were most of the outgoing ministers over the next four months. A similar trick was played when Ilham Aliyev replaced his father as President in 2003. The Cabinet was restructured and shuffled several times since then.

Women and minority political participation
There are no legal arrangements for women's participation in politics. The traditional norms in Azerbaijani society do restrict women’s role in politics. In the latest presidential elections one female candidate was registered, who came on the third place with 3.6% of the votes. The percentage of woman members in political parties ranges from 45% in the ruling YAP party, to 24% in AMIP and 15% in Musavat.

The outgoing parliament had 14 women deputies (out of 125). There are no women among the 18 cabinet ministers in government. Around 15 women entered the new parliament.

Women do however play a more prominent role in NGO’s. The practice known as family voting, which means that men cast the votes of the female members of their families, still exists but is declining.

The discussion on minority political participation focuses on two problematic issues related to the conflict over Nagorno-Karabakh. The first concerns the voting of the population living in the separatist region, which consist mainly of Armenians. The enclave is practically under control of the Armenian government (see below). In this area elections cannot be held.

The second problem as a result of the conflict is the enormous burden of some 800,000 displaced persons (IDP’s) living under dreadful circumstances. About 250,000 IDP’s are entitled to vote, however the failure of the Central Election Commission to issue specific instructions reduced the transparency of the process of registration and voting in IDP constituencies.

IMPORTANT POLITICAL ISSUES

Human rights
After the October 2003 presidential election, human rights abuses were widely reported. International human rights organisations and Western governments expressed their concern about what is described as the lowest point in ten years.

The protesters that were arrested in the aftermath of the 2003 election reported that they had been tortured when they were in custody. Arrestees said to be undressed, humiliated and beaten unconscious in their prison cells. Many complained investigators had threatened them with rape and electric shock.

Furthermore, reports say that also non-political detained are beaten, starved, and denied access to family and lawyers. In March 2004 President Aliyev released nearly 130 prisoners, including a former prime minister who had been sentenced to life imprisonment in 1999 on charges of plotting against the state. This step was welcomed by the international community, which continued to call upon the president to release political prisoners and to respect human rights.

Other reported human rights violations include the lack of freedom of speech and the use of violence against journalists, restrictions regarding freedom of association by refusing to register some political parties and harassing domestic human rights activists and nongovernmental organisations (NGOs), and discrimination of certain ethnic minorities and women.

Currently there are ten journalist imprisoned in Azerbaijan. On 6 December the tenth journalist, Ilgar Nasibov, was sentenced for 90 days on slander charges. A month earlier three journalists were sentenced to prison. Ganimat Zahid, the editor-in-chief of the Azerbaijani newspaper Azadliq was sentenced for two months. Moreover, Tofiq Abbasov, the editor-in-chief of the newspaper Azerbaijan's Reality, and Xaqani Mammadov, a journalist from this newspaper, were sentenced to ten and nine years in prison respectively. Media watchdogs, human rights groups, and Western governments have harshly criticised Azerbaijan in 2007 for the harassment and imprisonment of opposition journalists. The New York-based Committee to Protect Journalists has called Azerbaijan "the leading jailer of journalists in Europe and Central Asia."

Azerbaijan became a member of the Council of Europe after the flawed elections in 2000/2001, which was a controversial step in the first place. The U.S reaction to the 2003 elections was described as contradictionary. On the one hand Donald Rumsfeld congratulated Illham Aliyev with his victory, on the other hand warnings have been send to Baku to uphold human rights standards. Several analysts claim that the U.S focus on military and economic policy, thereby trying to safeguard their interest in the Baku-Tblisi-Ceyhan pipeline (see below). The opposition was also found the reactions to the 2005 parliamentary elections disappointingly mild and blamed the west for keeping the regime in the saddle.

Nagorno-Karabakh
Nagorno-Karabakh is the mountainous territory in the west of Azerbaijan inhabited by about 150,000 people. It has been part of Armenia until 1923, when Stalin decided to merge it into the Socialist Republic of Azerbaijan granting the area the status of autonomous region.

In 1988, when the Soviet Union was still intact, the mainly Armenian population used the room of the perestroika to link the territory to Armenia. In the following years tensions between Azeri’s and Armenians rose, resulting in refugee movements, mass demonstrations and pogroms.

In 1991, when Armenia and Azerbaijan became independent also Nagorno Karabakh proclaimed independence. As a result, the conflict turned into a major international dispute. An armed war from 1992 to 1994 left more than 30,000 dead and over 1 million displaced. Since then, no solution has been found. The situation is referred to be a “frozen conflict”.

International mediation efforts, which call for the enclave and Azerbaijan to form a common state, remained inconclusive. The mediations are operated by the OSCE, which founded for this purpose the so-called Minsk Group.

In the beginning of 2004 the Minsk Group decided to boost the peace process by organising several top-level meetings for Armenian and Azerbaijani government officials. However, it seems that the frustration about the failure to reach an agreement grows. Armenian and Azerbaijani authorities have stressed that while they remain open to negotiations, their positions are unchanged. This means that Yerevan will not accept any settlement that leaves the region a constituent part of Azerbaijan, while Baku will not consent to a deal in which Karabakh operates beyond the control of Azerbaijani authorities.

Also the latest important attempt to settle the conflict at two days talks in Rambouillet on 10 and 11 February 2006 did not bring the parties closer to each other. Observers noted that 2006 would be a good year to solve the Karabakh issue, as there are no elections in either Azerbaijan or Armenia.

Since the Southern Caucasus countries are also included in the New Neighbourhood policy of the European Union, many see a role for the EU in the peace process. Particularly since the president of the European Commission, Romano Prodi, said that the EU’s “ring of friends” cannot tolerate conflicts and strongly hinted at a greater involvement of the EU.

The unresolved conflict between Armenia and Azerbaijan is perceived to be the largest threat to peace and security in the South Caucasus and the wider region. While Turkey showed its solidarity with Azerbaijan by closing the Armenian border, Russia still sees the whole region as its near abroad and is operating military bases in Armenia.

Internally displaced persons (IDP’s)
As a result of the conflict over Nagorno-Karabakh large numbers of internally displaced persons are living under dreadful circumstances. An estimated 570,000 displaced persons pose an enormous social problem to the government.

Most of the IDP’s live in shelters, while about 135,000 refugees live in tented camps or improvised huts, which offer insufficient protection from the climate in Azerbaijan. Others live in small rooms with friends or family. Lack of basic needs such as clean water, food and sanitation cause diseases and relatively high infant mortality among IDP’s. Children of IDP’s are less likely to attend school than non-IDP’s because parents cannot afford the expenses.
Furthermore, unemployment is high (only 20 percent has a job) and 63 percent of the displaced population live below the poverty line, compared to 49 percent for the total population.

The government allocates more oil revenues to help these vulnerable people than the years before. The National Poverty Reduction Strategy, which was adopted in 2003, includes extended plans to improve the situation of IDP's, with the help of funds from IMF, the Asian Development Bank and the Worldbank.

However, support from the international community in general, and the UNHCR in specific, has declined. All in all, the needs on the ground seem to bigger than the resources of the government. Moreover, their social and legal status continues to deprive the IDP’s from a normal life.

The lack of progress in the settling the conflict, occasional violence, and the settlement of ethnic Armenians in Nagorno-Karabakh, indicate that large-scale return is highly unlikely.

Religion and the state
Azerbaijan’s state system is strongly secular, while the majority of the population is Islamic. Although religion has not been a source for tensions, more lately the government accuses radical Islam of causing social unrest, while at the same time neglecting the legitimate concerns of Islamic population who were demanding gas, electricity and water supplies. Russia can easily aggravate the situation by cutting the power supplies to northern Azerbaijan.

Soviet style approaches towards religion became apparent in June 2004 as the police several times removed by force Muslim prayers from an old mosque because officials want to make a carpet museum in this building.

In 2002 the government founded a new institute that conducts research into the finances of religious organisations. Among the investigated is the South Caucasus Board of Muslims – an institute that is widely respected for positive contributions to stability and dialogue in the country. Since the research the Board has been accused of corruption and is undermined.

The pressure plays into the hands of radical movements, which saw their influence grow. While Shiite Islam is the main religion, the Azeri’s are known for their secular way of life – especially when compared to neighbouring Iran. Radical Shiites operate mainly through the banned Islamic Party of Azerbaijan.

In the north the power of small pockets of Sunni fundamentalists are informally supporting the separatists in the nearby conflict areas of Dagestan, Chechnya and the Pankisi Gorge. The population in these areas is vulnerable for extremism because of the isolation, low living standards, and growing frustration with government inefficiency.

Caspian oil and gas politics
Azerbaijan is ranked among the twenty most oil-rich countries in the world. Considerable oil and gas reserves are located in the Caspian Sea and this has been a major factor in triggering international engagement in the region.

Main concerns are the transit routes for gas and oil, and the legal status of the Caspian Sea for exploration and drilling rights.

The transit routes are all about political influence. Russia tries to concentrate the routes on its territory in order to control the energy flows, while the Caucasian republics as well as the USA have sought alternative routes to reduce Moscow’s influence in the region.

The most famous project is the construction of the Baku-Tbilisi-Ceyhan (BTC) pipeline, which runs from Azerbaijan via Georgia to the Turkish port Ceyhan. The estimated cost of the USA-backed project is 2.95 billion dollar, which is paid by the involved oil companies (mainly BP), the involved countries and additional support from the European Bank for Reconstruction and Development and the World Bank.

The pipeline, opened in May 2005, is the first to open up the resources of the Caspian Sea for the outside world at the same time bypassing Russian territory. Main concerns according to human rights organisations are the lack of compensation for people who lost land, health and safety risks for the workers, human right’s violations against opponents of the project, and the threat to access to water for local people. Environmental organisations also have been very critical, as the pipeline runs through the Borjomi National Park in Georgia and causes pollution.

The second major concern has been the determination of the judicial status of the Caspian Sea. The bordering countries sought to reach an agreement that would maximise the access to the reserves, which means there are different approaches to the division in territorial zones. Due to the absence of a complete agreement, the exploitation of oil is arranged by bilateral agreements between the concerning countries. By late 2003 many of the legal disputes had been settled.

The energy sector is the most important economic sector in Azerbaijan: 40 percent of budget revenue and 90 percent of exports came from oil in 2003. The energy sector accounts for more than 40 percent of the GDP and more than 60 percent of investment. However, the money is mostly invested in uncompetitive sectors rather than invested in reforms.

Pyramid society, clans and corruption
The political and economic system in Azerbaijan is largely based on a pyramidal web of patronage. Clans, mainly based on regional origin as well as the ruling elite, keep the system intact to secure their financial and power interests.

Two clans, the Nakhichevanis and Yerazi, have dominated politics for decades. As a result, other clans were excluded from power. Heydar Aliyev had its origin in both clans, which gave him a strong powerbase and an opportunity to build a certain unity between the two clans.

The Aliyev family stands on the top of the pyramid and makes sure that key-positions in all spheres of society are taken by closely related and like-minded. The father of the current president started well before his resignation as president to replace older people in his surroundings with younger, in order to move his son to the top and secure family interests.

This structure has developed into extensive bureaucracy and corruption. Corruption in all spheres of society poses the largest threat to the functioning of the state.

Most ministers have bought their jobs and many are directly related to the president. Moreover, membership of the president’s party, YAP, is a precondition for state employment. Furthermore, persons closely related or loyal to the president can be found in key-positions in the judiciary, banks, academic institutes, business sector, state oil companies, diplomatic scene, media as well as security services.

It goes without speaking that the top of the pyramid also represents the wealthiest part of society, highly involved in the oil and gas business. However, as a consequence of the corruption it is often difficult to distinguish private wealth from government property.

Analysts consider opening up of the economic and political scene to new faces as vital for further development of Azerbaijan and combating corruption. In 2004, Illham Aliyev has carefully started with appointing new young government officials to implement reforms. It won’t be an easy job for him to open up the system, since he has to balance between interests of domestic oligarchs, of western criticisers and of his clan / family interest.

However, time is pressing even more since many high educated youngsters leave the country searching for a better future elsewhere.

International relations - general
After the break-up of the Soviet Union, most nations moved quickly to recognise Azerbaijan's independence, and several established full diplomatic relations within the first year.The first to do so was Turkey in January 1992. To broaden its relations with nations both East and West, Azerbaijan joined a number of international and regional organisations, including the United Nations, the OSCE, the Council of Europe, NATO's Partnership for Peace, GUAM, the World Health Organisation, the International Monetary Fund, and the Black Sea Economic Cooperation Organisation. And it has observer status in the WTO.

Azerbaijan and neighbouring countries relations
Azerbaijan’s relations with its neighbours are mixed. Azerbaijan is a member of the GUUAM (Georgia, Uzbekistan, Ukraine, Azerbaijan, Moldova) and has close ties with Georgia and Turkey. The relationship with Iran is more complex. A great deal of trade occurs between the two nations, but a number of recurring disputes – over the division of Caspian oil reserves, the status of the ethnic Azeri population in Iran, and Azerbaijan’s friendship with Israel – have soured relations.

Azerbaijan’s distrust of Russia stems from the transfer of large quantities of Russian-made arms to Armenia during the Nagorno-Karabakh conflict. The Kremlin has a strong political standing in Azerbaijan, notably in settling the Nagorno-Karabakh problem. Jaap de Hoop Scheffer, NATO's Secretary General, said during his visit to Moscow that Russia played a major role in resolving South Caucasian conflicts. He said Russia was an irreplaceable factor in the efforts to restore peace in areas of ethnic tension in the former Soviet states

Russia has also repeatedly sought to dissuade Azerbaijan from participating in a major US-supported Caspian Sea petroleum pipeline project. The relations between the two neighbours took a turn for the worse at the end of 2006. The Russian gas giant Gazprom declared it would increase the price of gas for Azerbaijan from 110 to 235 US dollars per 1,000 cubic meters and reduce supplies by two thirds. The year 2007 has begun in Azerbaijan with relations with Russia hitting a low point. Baku has stopped receiving gas from Russia and halted transport of its oil through Russia via the northern pipeline to the Black Sea. Experts see this is a sign of a new and significant shift in Azerbaijani foreign policy away from Moscow.

US and Azerbaijan relations
The United States opened an Embassy in Azerbaijan's capital, Baku, in March 1992. It has been actively engaged in international efforts to find a peaceful solution to the Nagorno-Karabakh conflict, it is a co-chair of the Minsk Group. The US and Azerbaijan have signed a bilateral trade agreement, which entered into force in April 1995 and confers to Azerbaijan the status of most favoured nation. The United States also has a bilateral investment treaty with Azerbaijan.

The Freedom Support Act, enacted in October 1992, has been the cornerstone of US efforts to help Azerbaijan during this transition. Under the Freedom Support Act, the US was providing approximately $48 million in humanitarian, democracy, and reform assistance to Azerbaijan in 2006. US humanitarian programs in Azerbaijan focus on community development, health and economic opportunities, and support services, including training and business management consultations for vulnerable populations.

EU and Azerbaijan relations
EU relations with Azerbaijan are governed by the EU –Azerbaijan Partnership and Cooperation Agreement signed in 1996 and entered into force in 1999. Following the enlargement of the European Union, the EU launched the European Neighbourhood Policy (ENP) and Azerbaijan became part of this policy in 2004. On the basis of a Country Report an ENP Action Plan was discussed by the Commission and the Azerbaijani government and finally adopted on 14 November 2006.

On the basis of bilateral priorities, also a National Indicative Programme (NIP) has been adopted in agreement with the Azerbaijani authorities. The NIP covers the period from 2007-2010. For this period an indicative total sum of €92 million has been allocated; in addition to the ENPI national programme, Azerbaijan will also benefit from the ENPI regional and interregional programmes, plus a number of thematic programmes such as the European Instrument for Democracy and Human Rights - EIDHR.

SOCIAL DEMOCRATIC PARTIES

Social Democratic Party of Azerbaijan (SDPA)
The founding conference of the Social Democratic Party was held in December 1989 with most of the original members coming from the Popular Front. One of the co-chairmen at that time, Zardusht Alizadeh, is also one of the founders of the Popular Front of Azerbaijan. The party was the first non-communist party and opposition party to be officially registered (1990). When Ayaz Mutalibov was the President of the Republic of Azerbaijan, the party had one Member of Parliament, which was Araz Alizadeh, the present co-chairman of the party.

In 2000 internal problems emerged which lead to a split in the party. One part supported the leadership of Araz Alizadeh, while his brother, Zardusht Alizadeh, led the other part together with the President of the Helsinki Citizens Assembly and winner of the Olof Palme Peace Prize, Arzu Abdullayeva. The Social Democratic Youth Organisation supported the latter branch. The problems rose when Araz Alizadeh, who lived in exile in Moscow came back to Azerbaijan. The brothers, who are not on speaking terms, called themselves co-chairman, while Arzu Abdullayeva was the deputy chairman.

The SDPA did not take part in the 2000/1 elections since it was obvious they were going to be unfair. For the 2005 parliamentary elections the SDPA joined the “New Politics” bloc (YeS), which also includes the Movement for National Unity and the National Independence Party of Azerbaijan, the Civil Forum for the Sake of Azerbaijan. The party did not gain any seats in the parliament.

At a party congress on 27 August 2003 former President Ayaz Mutalibov was elected co-chairman. Mutalibov brought with him a part of the Civic Unity Party (VHP), which he has been chairing. He is living in exile since 1992 and was warned by the authorities that if he would return he would risk to be arrested. Zardusht Alizadeh did not participate in this congress and since then he is neither a co-chairman of SDPA nor member.

The newspaper “Istiglal” (Independence) is linked to the party. Zardusht Alizade was also the head editor of this newspaper – until the splitting of the party. Now he is known mostly as a political scientist. His appearance in the media is often linked to his political expertise and when giving comments he is often described as being a liberal political analyst, without reference to his social democratic background.

Like most Azeri’s, the Alizadeh brothers consider Nagorno-Karabakh to be part of Azerbaijan. While former members of the party Zardusht Alizedeh, Arzu Abdullayeva and the Social Democratic Youth Organistion are for a peaceful resolution of the conflict, including a high status for Armenians living in Nagarno-Karabakh, together with the Azeri community, the current leaders of the party are in favour of a military solution. In an interview in 2000 Araz Alizadeh said: ”As for the problem of Karabakh, we have an Armenian aggression and we must secure ourselves against this. But we shouldn’t make concessions in this matter. Some of our politicians say that if we start a war against Armenia, we could upset the latter. We have to defend our lands and let Armenia be upset.”

The party has a consultative status in the Socialist International.

Co-chairmen: Araz Alizadeh and Ayaz Mutalibov

OTHER MAIN PARTIES

Pro-government:

New Azerbaijan Party (YAP)
The YAP is the ruling party of Azerbaijan. It was formed by Heydar Aliyev in 1993 to support his political career. Many high functions in the party are given to members of the Aliyev family. Since the dead of Heydar Aliyev, his son Illham Aliyev took over the presidency of the country and the leadership of the party – of which he was first deputy chairman. The party is especially strong in the region of Nakhichevan and is dominated by people from this district. Former communist officials are also strong within the party. The YAP first institutionalised its power during the 1995 parliamentary elections, when it won an absolute majority of seats and effectively transformed the legislation into a body loyal to the president. It remains firmly in power by rigging the elections and oppressing the opposition.

Leader: Illham Aliyev
Website: www.yap.org.az

Azerbaijan Communist Party (AKP)
The Communist Party was formally disbanded in September 1991. Nevertheless, former leaders and members of the communists continued to play a role in the family- and patronage-based political system. Many got a prominent place in the government led by Aliyev, who was himself a communist leader. However, the revived communist party is plagued by splits ever since its formal foundation in 1993. The most well-known is Firudin Hasanov’s faction, which supports the government and is viewed as the only legitimate bloc by the government. Hasanov was a presidential candidate in the 2003 elections – in which he gathered only 0.5 percent of the votes. The other three factions are led by Ramiz Ahmedov (pro-Russian and close to Zyuganov’s party), Sayat Sayadov (self-proclaimed as faithful to Marxist-Leninist-Stalinist ideals), and Musa Tuganov (considers himself a part of the Communist Party of the Soviet Union).

Alliance for the sake of Azerbaijan (ASA)
This is a small pro-governmental party, founded in 1994. The party is represented in the parliament with one seat. Its leader was registered to run in the presidential election of 2003, but withdraw its candidacy.

Leader: Abutalib Samedov

Social Prosperity Party
The Social Prosperity Party is a small pro-governmental party. It opened a office in Baku especially to campaign for Illham Aliyev in the 2003 presidential election.

Leader: Hussein Kyazymly

Ana Vatan (AV) or Motherland Party
The Motherland Party is a small pro-governmental party, which was established in 1990. Since 1993 it switched its allegiance to Heydar Aliyev and his party. Many members are from the same region in Armenia as Heydar Aliyev. The leader, Fazail Agamali is a former deputy minister for social protection.

Leader: Fazail Agamali

Opposition:

Musavat Party
The Musavat Party dates from Azerbaijan’s period of independence as the Azerbaijan Democratic Republic of 1918-1920, although the majority of the party’s current leaders were members of the Popular Front. In 1992 Musavat was re-established as a political party in Azerbaijan, after operating underground and in Turkey during the Soviet period. Nowadays Musavat is one of the major opposition parties.

Initially, the party’s ideology consisted of nationalism, pan-Turkism and pan-Islamism. Later it became more secular in its orientation. Like in the Popular Front, there has been a debate in the party on nationalism and liberalism. A compromise was found when the party programme was adopted and the liberal Isa Qambar became party leader. He has also come to be regarded as the leader of the country’s democratic opposition. Musavat took part in the Democratic Congress. Musavat is commonly characterised as the party of the Azerbaijani intelligentsia and former officials of the Elchibey government.

During the 1995 elections, Musavat was banned from the proportional ballot on grounds that it failed to gather enough signatures to register. The government repeated this argument to ban Musavat from contesting the proportional ballot in the 2000 parliamentary elections. As a result of international pressure, the Central Election Commission ultimately reversed the ban in response to a request from president Aliyev to do so. International pressure has also been necessary to protect Musavat members who have been subjected to acts of extraordinary pressure and intimidation by the government during the campaign.

In the 2000/1 elections the party received 2 seats in the parliament, but because of the repression the party decided to boycott the sessions. However one member ignored this decision and stayed in the Parliament.

In the aftermath of the 2003 presidential election many Musavat activists were detained and mistreated. The leader of the party was one of the presidential candidates. He was the only one receiving a substantial part of the votes, reaching the second place after Aliyev – however still at large distance (14% against respectively 76%).

For the 2005 parliamentary elections Musavat joined the Azadliq bloc and gained 5 seats in the parliament. In February 2006 the party decided not to boycott the parliament and the repeated elections in May 2006. The other members of Azadliq did not share this strategy and after a conflict Musavat left the bloc.

Leader: Isa Qambar
Website: www.isagambar.az

Azerbaijan Popular Front (AHCP)
The Popular Front, was formed to lead the country’s movement for national independence. The party’s chairman Elchibey was elected president in the country’s first democratic elections in 1992. The Popular Front government came to an abrupt end when it was unseated by the bloodless coup in 1993 that brought Aliyev to power.

The party became one of the main opposition parties, though it lost many leaders to other parties. It takes part in the Democratic Congress, which is a loose form of co-operation among opposition parties.

As a result of the absence of Elchiby due to his ban to the exclave of Nakhichivan, a younger group supporting liberal ideas, led by Ali Kerimli, came to dominate. A more conservative group kept on supporting Elchiby. Presently, two separate groups, each with its own list, claim the party’s name. The 'reform' version is led by Ali Karimli and the ‘original’ version led by Mirmahmud Mirali-Oglu, who followed up Elchibey after his death in 2000.

Attempts to reunite the party have failed and another split further weakened their position. The Central Election Commission, de facto under governmental control, has recognised the wing led by Kerimli. In the previous parliament the party occupied six seats of a total 125 in parliament. The support base can mainly be found in Baku and the isolated Nakhichivan region – which is the home of Elchiby.

For the 2005 elections the progressive wing of the party led by Ali Kerimli joined the Azadliq opposition bloc. In the aftermath the leader aimed at unleashing another “coloured revolution” and called for a boycott of the parliament and repeated 2006 elections. This stance led to a conflict with coalition partner Musavat resulting in the falling apart of the Azadliq bloc.

In November 2006, the party was evicted from its offices in Baku, according to officials due to unpaid rent. The party however called the eviction part of a campaign to silence dissent.

Leaders:
reform wing: Ali Kerimli
original wing: Mirmahmud Fattayev
pro-governmental: Gudrat Hasanguliev

Azerbaijan National Independence Party (AMIP)
Ehtibar Mamedov was formerly a member of the Board of the Popular Front and in the late 1980s he was identified with the radical nationalist wing. In 1991 he founded the AMIP in opposition to the Popular Front government under Elchibey. He supported Aliyev’s accession to power, but rejected offers to join his government. The AMIP was treated by the government as a ‘loyal opposition’ – in contrast to the more radical opposition of the Popular Front and Musavat – until 1998, when Mamedov ran against Aliyev in elections for the presidency that year. Mamedov was the only major candidate who ultimately chose to stay in the race rather than boycott, capturing enough votes, as confirmed by local and international observers, to go to the second round. While official results gave Mamedov 12%, independent calculations gave him approximately 25 to 30%. The AMIP was punished for Mamedov’s strong performance after the elections, as the government cracked down on the party’s commercial and financial sponsors. Besides, in 1998, Mamedov was convicted to a five-year sentence, because of falsely claiming that a minister was preparing a coup against Aliyev. In 2003 he was released. The party describes itself as centre-right, focusing on liberalisation of the economy and strengthening of democracy.

For the 2005 parliamentary elections AMIP joined the “New Policy” Bloc (YeS).

Leader: Ehtibar Mamedov
Website: www.amip.info

Azerbaijan Democratic Party (ADP)
The ADP was founded in Nakhichevan in 1992. It gained influence and recognition in 1998 after Rasul Guliyev, former Speaker of Parliament under president Aliyev and presently a political exile, became co-chairman. The party was unable to register to participate in the 1995 parliamentary elections. However, the party benefited from discontent of YAP members who left the party and joined ADP out of loyalty to Guliyev. By 1999 the party had six members, the biggest opposition faction in parliament. As a result of the success of the party and its chairman, the government increased pressure. Since joining the opposition, Guliyev has been accused of corruption and several of his acquaintances have been arrested on charges of terrorism and treason. ADP managed to get registration partly as a result of international pressure. Similarly, the Central Election Commission accepted the ADP’s list for the proportional system only after international organisations intervened.

For the 2005 parliamentary elections the party joined the Azadliq bloc. The leader, Guliyev tried to return, but failed as he was arrested in Ukraine. The authorities in Azerbaijan took strict measures to prevent a warm welcome and blocked the roads to the airport.

In the summer of 2006, the party fell victim to infighting. Dozens of DPA supporters defected to the political movement Azerbaijan's Path as a result of fights for influence between the party's deputy chair Sardar Calaloglu and Guliyev's associate Aydin Guliyev.

Leader: Rasul Guliyev
Website: www.gouliev.com

Civic Solidarity Party (VBP)
The Civic Solidarity Party was founded in 1992 and is ever since led by Sabir Rustamkhanli. The leader was Press and Information Minister in the period 1991-1995. The VBP is an opposition party and member of the Democratic Congress since 1998. Main idea is the civil unification of Azerbaijani people. Rustamkhanli rejected a medal of honour awarded by president Aliyev in 1998 and was nominated as presidential candidate in the 2003 elections, in which he received 0.8% of the votes.

Leader: Sabir Rustamkhanli

Yurddash Party (YP)
This is a small opposition party, formed in 1991 by the current chairman Mais Safarli. The party is close to the Popular Front and focuses on protecting the interests of Azerbaijanis, in and outside the country. Yurddash is part of the Democratic Congress. The chairman is editor of The Baku Times, an English newspaper in Baku.

Leader: Mais Safarli

SOURCES

Country and regional reports
BBC
CIA World Factbook
Federal Research Division of the Library of Congress
International Crisis Group
Swedish International Development Cooperation Agency
Transitions Online

Clans and corruption
Azerbaijan Daily Digest: The hell of businessman
Eurasia Insights: Like father, like son? Azerbaijan’s bleak legacy
International Crisis Group: Azerbaijan: Turning Over a New Leaf
NBR Analysis: Oil and development in Post-Soviet Azerbaijan

Elections
Electionworld.org
Eurasianet.org: Choice 2003: Elections in Azerbaijan and Georgia
Eurasianet.org: Azerbaijan Election Watch
Human Right Watch: Azerbaijan Presidential Election 2003
IDP Project.org: Right to vote of the displaced during parliamentary elections
International Crisis Group: Azerbaijan: Turning Over a New Leaf
OSCE/ ODIHR Election Reports

Human rights
Amnesty International: Azerbaijan: Political opposition leaders must receive fair trial
Amnesty International: Report 2004, Azerbaijan
Council of Europe: Azerbaijan: political prisoners released thanks to Council of Europe persistent efforts
Council of Europe: Azerbaijan: progress is far from satisfactory
EurasiaNet.org: Azerbaijan shrugs off criticism of its human rights practices
Human rights Watch: Azerbaijan
Institute for War and Peace Reporting: Azeri Torture Claims Mount
RFE/ RL: Azerbaijan: PACE Lambastes Baku Over Political Prisoners, Slow Pace Of Reforms
RFE/RL: Analysis: Azerbaijan's 'Magnificent Seven' Stand Trial
US Department of State: Country Report on Human Rights 2003
RFE/RL: In 'Azerbaijan's North Korea,' Journalist Crackdown Continues


Internally Displaced Persons
IDP Project.org

Nagorno Karabakh
Azernews: Azerbaijan says 'no' to OSCE Minsk Group
Eurasia Insight: Nagorno-Karabakh; A decade of frustration in search of a negotiated peace
International Crisis Group: Azerbaijan: Turning Over a New Leaf
RFE/ RL: Azerbaijan: EU Keen To Get Involved In Nagorno-Karabakh Peace Process

Politics
BBC: Former Azerbaijan president dies
Eurasia Insight: Domestic inconsistencies in Azerbaijan
Eurasianet: Political Parties
Eurasianet: Little to loose: opposition in Azerbaijan
International Crisis Group: Azerbaijan: Turning Over a New Leaf
NBR Analysis: Oil and development in Post-Soviet Azerbaijan
Official site President of Azerbaijan, Ilham Aliyev
Online Women in Politics
RFE/RL Azerbaijan: Is President Ilham Aliyev's Power Base Wobbling?
RFE/RL Analysis: President Aliyev's Options For Reform

Religion and the state
Forum 18: Azerbaijan: Police storm mosque, expelling & beating-up Muslims
Institute for War and Peace Reporting: Azerbaijan: State Hounds Muslim Leaders
International Crisis Group: Azerbaijan: Turning Over a New Leaf

Repeat elections 13 May 2006
ODIHR
Eurasianet.org, 16 May 2006

Relations with neighbouring countries
NSCJ
UN
Rian.ru

Foreign relations
Government Azerbaijan
US Department of State
European Union