Aaron in Azerbaijan

Just another blog about Azerbaijan.

Archive for the ‘Economics’ Category

Photojournalism: The Lives of the Pipeline

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After two years of living here in Azerbaijan, I still enjoy the photo essays and documenting of Azerbaijani lives as they are affected by various contexts, such as a massive oil pipeline. There are so many aspects of living in Azerbaijan that few will ever witness that we can only rely on those willing to travel here and take the pictures, write the stories. Last year, Amanda Rivkin was one of those people. She took a grant from National Geographic to the Baku-Tbilisi-Ceyhan (BTC) pipeline to document the lives of the pipelines route.

This time around, it turns out Amanda is back for more. She just couldn’t get enough of Azerbaijan and its (and Georgia’s and Turkey’s) pipeline. She’ll be hanging out in Azerbaijan until next summer on a Fulbright scholarship, documenting the lives of the pipeline. This is an opportunity to get a look at parts of Azerbaijan that even a rugged adventurist might not be able to see. In her past work here at the BTC, Amanda shot images even the biggest journalism players couldn’t access.

You can check out Amanda’s work by going to her website and flipping through her pictures. On the top left of her page, you can see what she did on the BTC last year, among others. If you’re impressed and want to see more, check out her new project page. You have an opportunity to support more work being done to document and reveal to the world the lives of people in Azerbaijan, Georgia, and Turkey. We’ll be able to get a feel for the types of landscapes and lives that surround the pipeline, a geopolitically loaded project, and the conditions in which our oil-reliant world is enriched.

Written by Aaron

October 22, 2011 at 1:48 pm

Where Does Azerbaijan Belong?

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The CRRC has a new report out detailing gender attitude differences in the Caucasus and comparing those attitudes to the wider set of data from the Pew Center’s Global Attitudes Project. What you get is a picture that lifts up the differences in Caucasus countries in contrast to Europe, Asia, and the Middle East. The takeaway:

Armenia and Azerbaijan tend to emphasize more traditional gender roles, and in global terms are often closer in attitude to Middle Eastern and Asian countries. Georgia, meanwhile, is more inclined to aspire to gender equality, and in this sense is closer to countries in Western Europe and the Americas. However, the picture is complicated and, using other data from the Caucasus Barometer, the report shows that gender perceptions in the South Caucasus are deeply nuanced, and do not fit into a conventional picture of equality versus tradition.

The report (pdf) is a quick and informative read. What I’m interested in here, though, is what is not in this report. One of the glaring absences in the Pew report is data from Central Asia. For obvious reasons, countries like Turkmenistan and Kazakhstan are rather inaccessible. And from what I can tell, it looks like Uzbekistan last participated in the Global Attitudes Survey in 2002. Not exactly a recipe for a reliable data set from Central Asia. Kyrgystan and Tajikistan aren’t represent at all, nor are Iran and Afghanistan. Without the work of the CRRC, we wouldn’t have comparable information for Georgia, Armenia, or Azerbaijan, either.

I’m willing to posit, though, that if we had that information, we would see vast similarities between Azerbaijan and the Central Asian countries. I’d even go so far as to say that in addition to the geographical grouping we give Azerbaijan, with the other Caucasus countries, it’d be appropriate to say that Azerbaijan fits right in in Central Asia. Websites such as NewEurasia, a recent find that I’m really enjoying, leave their reporting to only the countries on the other side of the Caspian (not sure if that’s just because they don’t have an Azerbaijan source or not). It’s fairly obvious why I think that Azerbaijan shares so much with those countries: Muslim populations, former Soviet states, natural resource wealth, strong Russian leadership legacies, and more. If you’ve read Chasing the Sea, an account from a former PCV in Uzbekistan, the similarities, all the way from food and clothing choices to government apparatuses, are striking. Reading Hooman Majd’s The Ayatollah Begs to Differ offers more similarities that can extend throughout countries of the former Persian Empire, which would includes a significant chunk of the Middle East and Central Asia, as well as the Caucasus. The influences from the Russians, Iranians, and the myriad of other conquerors of the region have left impressions that mark the entire region.

This post doesn’t really have a larger point to make. What I’m trying to say is that I think it’s completely legitimate to include Azerbaijan in the region of “Central Asia”, even though it’s geographically separated from the typical list of countries because it’s on the wrong side of the Caspian. Whether it’s a fruitful comparison to make, I’m not sure, but I’d be interested in seeing information like that gleaned from the CRRC and the Pew surveys produced to compare the typical Central Asian countries and Azerbaijan.

Written by Aaron

October 19, 2011 at 5:54 am

Where is the Stratification in Azeri Society?

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When I was a sophomore in college, I remember talking to my economics professor about the effects of a large gap between the rich and the poor in society. In the end, we came to the agreement that it’s likely that when that gap gets so big, the gulf between classes so wide, those on the lower end of the spectrum would be demotivated, disheartened, disinterested in working hard to move up. I’m not sure how measurable that statement is, but I remember the conversation and it reminds me of Azerbaijan in a very specific way, mostly having to do with what can best be described as the stratification of Azerbaijani society.

It would be way too extreme to say that Azerbaijan is a place where people are demotivated, disheartened, and disinterested. In fact, that would go against what I’ve learned over the past two years by working closely with many Azeri colleagues. From young students to mid-career professionals, I’ve been lucky to work with some of the most inspiring of people, people who have come from small outlying villages to educate themselves, get to university and, in some cases, find ways to keep improving themselves when those opportunities aren’t available here in Azerbaijan.

Yet, I do think about the stratification of Azerbaijani society, and was reminded of it by this paper, just out by Gary Pollock and Ken Roberts (thanks to the Caucasus Research Resource Centers). I haven’t read the full paper yet, but it does contain this interesting statement in the abstract:

The main differences between classes of individuals are driven primarily by education, which result in differences in attitudes and (to some extent) individual lifestyles. It is argued that in economic and socio-political terms there are as yet just two real classes among actual and potential employees in the South Caucasus–middle classes and lower classes–and that although these classes differ in their standards of living and political dispositions, these are unlikely to become bases for conflict between them.

I don’t have much to add to that except for my own experience here, which consists mostly of visiting the homes of my friends and colleagues. When you walk into anyone’s home here in Azerbaijan, you’ll invariably be met by similar environs and similar attitudes. Thick reddish carpets dominate here in the south and they’ll stretch along the floors and walls. Comfortable chairs for guests butt up against a low-sitting table, set with nuts and fruits and candy. It’s a great setting to walk into, especially coupled with warm greetings, pecks on the cheek, and endless ways to ask “how are you?” As the authors wrote above, it’s true that there are certain things which will show a differing standard of living from house to house, but the proximity of one defined living standard (however that is defined) to another is so close to another that the difference is moot. It’s likely that here in Lənkəran, most of the people have experienced washing clothes by hand, have neighbors and family who do so, or continue to do so today. And clothes-washing is only one example. You could say the same for having internet, cars, western- or eastern-style toilets, gas-stoves. To have or not have these things is normal. The differences in standard of living between the middle- and lower-classes probably aren’t so defined as to allow for a class-based envy. As the Soviet Union fell, everyone likely had a similar experience that put them all closer in terms of class (it’s hard to differentiate yourself when the electricity is out the majority of the day and gas comes to your house intermittently, if at all).

This isn’t to say that these material things don’t matter here–they do. When you walk into that home, the host definitely wants to show off the best to their guest. Yet, I would have a hard time trying to posit that there is necessarily a class-based animosity sprouting from them. Considering the close temporal and physical proximity of all the differences for most Azerbaijanis, it’s difficult to regard the stratification of Azeri society as anything more than seeing the folks who are at the top, and then everyone else. It’s possible (probable?) that this could change over the next decade. More children will grow up in households where it’s normal to have a washing machine, and odd to not have one. People could find that their experiences are more and more separated by class as Azerbaijan’s experiment in capitalism continues. For now, however, proximity is the name of the game and class animosity stays low.

Written by Aaron

October 8, 2011 at 8:10 pm

Where’s the Shift?

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Maybe you’ve read this article from CNBC Magazine already. It’s a fairly general article, called “Power Shift”, giving an overview of political and economic movements over the past decade and, more specifically, over the past year in Azerbaijan. There aren’t a whole lot of new or surprising facets of the article, but there are some interesting notes, such as this one:

Last year, the UK invested almost £1bn in the country or 51.9% of total foreign investment in Azerbaijan; BP, the oil giant, accounted for the vast majority of this. The next biggest investor was the US (9%), with Turkey contributing 3.6%.

That’s an impressive drop-off. Obviously, investments from oil companies are going to be the lion’s share of investments in a petrostate, but I can imagine that as Azerbaijan’s oil and gas reserves rise in importance, countries like China and India will want to muscle their way into the discussion, using foreign investment to build the relationship. Over the past year, China has started a few initiatives in Azerbaijan, including a new Confucious Institute in Baku. For what it’s worth, a lovely pedestrian boulevard was made here in Lənkəran back about 2005 or 2006, though I hear that the Chinese who built it received quite a bit of racist grief while they were here. And I’ve said before (as well as Eli) that Mandarin Chinese might be a more advantageous language for Azerbaijani students to learn.

Another interesting set of tidbits was is this one:

A huge international sea port is also being built on the Caspian to facilitate oil shipments from Kazakhstan. An international airport at Gabala is planned, while a terminal is being added to Heydar Aliyev International Airport in Baku. Tourism is expanding, thanks to the construction of several new hotels and resorts in Baku and along the coast.

Seaport? Check. That makes sense to me. That might be very helpful in turning Azerbaijan’s geography into a more advantageous asset, as I expressed here. An international airport in Gabala (Qəbələ)? This is a little confusing. I don’t mean to say that international airports are a bad thing, but let’s recall Azerbaijan’s size and it’s needs. Baku’s international airport is already more than satisfying the country’s needs and is scheduled for an expansion. No one will be complaining about the crazy crowds at Heydar Aliyev Airport except maybe during Eurovision. And there are already a bunch of airports all over Azerbaijan, including Zaqatala, Gəncə, and our very own in Lənkəran. I think there are more, too. Adding another sounds a little silly, unless there is something I’m missing here.

Also, that Azerbaijani tourism thing is creeping in again, with the fuzzy numbers to back it up. The article goes on to list the hotel projects in Baku that are aimed at tourism, supposedly. From my vantage point, this is definitely a situation where hoteliers are banking on supply-side forces to keep them afloat. I would be surprised if demand is even a blip on the screen. Further in the article, references are made to a magical million-tourist number. There is no way there are a million tourists even coming to Azerbaijan. We’ve already looked at this. I’m not sure how 17,000 turns into 1,000,000. And let’s not discuss the visa issue, either. Our esteemed writer, Pamela Ann Smith, probably needs to do a little more fact-checking on that score.

One of the things I do like about the article, though, is this note on education:

Noting that many Azeri students are currently studying in the UK, Alp adds that British universities are now “looking to form joint venture partnerships” with Azeri institutions to provide “world-class engineers, scientists and linguists.”

If they are sincere about that, it would be a major boost to Azerbaijan. Any way to boost the educations system here would be fantastic. As it stands today, the leading organizations and companies know that Azerbaijanis are not trained well enough here in their own country to be able to compete on an international level. From Doctorate education on down, no education level is even satisfactory for Azerbaijanis. If, however, partnerships like this mentioned above can flower, Azerbaijan could actually have the human capital to provide for itself. Instead, the major construction projects all go to foreign firms with foreign workers and top management in many companies has to be foreign to be run effectively. This goes for nearly every sector, from banking to tourism to agriculture to manufacturing and construction.

The article does highlight some possible future bright spots, which is encouraging as agriculture and other non-oil sectors grow. Being able to strengthen sectors outside of oil and gas is going to be key to actually developing a more equitable and democratic Azerbaijan. Until then, however, we’ll have to watch as the monopolies and the wealthy “super-elite” have their way with Azerbaijan’s resource wealth.

Written by Aaron

October 4, 2011 at 4:30 pm

Azeris in Georgia, Staying Put

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I hadn’t come across this story until today, but I find it a fascinating dynamic concerning migration, Georgia, and Azerbaijan, from Eurasianet:

Economic collapse, war and nationalist government policies prompted thousands of Georgia’s ethnic Azeris to head to neighboring Azerbaijan during the early 1990s. About 80 percent of the remaining estimated 350,000 ethnic Azeris in Georgia live in the southeastern region of Kvemo Kartli, a predominantly agricultural area.

The Azerbaijani government has no specific data on how many ethnic Azeri migrants are currently in Azerbaijan, but migration expert Azer Allahveranov, president of Baku’s Eurasian Platform for Civic Initiatives, a non-governmental organization, estimates that more than 95 percent of the 100,000 Georgian citizens believed to live in the country are ethnic Azeris.

Faced with problems legalizing their status and settling “successfully” in Azerbaijan, some of these migrants now are returning to Georgia, said Aliovsat Aliyev, director of the Baku-based Migration Center, a non-profit think-tank. Improved economic and living conditions in Georgia, relative to the early 1990s, are contributing to the trend, he added.

When you travel from the far western tip of Azerbaijan, from Qazax in to Georgia, on your way to Tbilisi, thats ethnic Azeri territory. And not only in that area, but also in areas north of the finger that ends with Balaken. Likewise, there are significant ethnic Georgian populations in those northwestern Azerbaijan regions bordering the Caucasus neighbors.

One of the reasons this above article is interesting to me is that I’ve met quite a few Azerbaijanis who were born in Georgia or who still have family there, but have since moved to Baku or other regions (but mostly Baku). Rahman, the branch manager at Lənkəran’s AccessBank is one. We have some Peace Corps staff, as well, who follow that same line. At least one of our Azeri language instructors was born in Georgia and moved south.  Interestingly, none of these people know the Georgian language, so it seems integration that way wasn’t really a high priority.

Another interesting part about that story, beyond those personal connections, is how the Azerbaijani government sees those ethnic Azeris residing in Georgia. The article posits that Azerbaijan would actually prefer for those Azeris to stay in Georgia in an effort to increase Azerbaijani influence in the Georgian government. Azerbaijan wants to use another state’s democracy to its advantage. Smooth move, slick. And, incredibly, the article describes how the incentives currently favor those Azeris staying in Georgia, and more Azeris moving back there:

A group of Azerbaijani entrepreneurs, for example, is planning to open hospitals in Georgia, added Shovgi Mekhtizade, an attaché at the Azerbaijani embassy in Tbilisi, the Turan news agency reported.

In addition, the State Oil Company of the Azerbaijani Republic (SOCAR) is providing economic incentives for Azeris to remain in Georgia. The company’s Georgian subsidiary, SOCAR Energy Georgia, one of Georgia’s largest investors, has created about 3,000 new jobs in Georgia; half of those jobs are held by ethnic Azeris, SOCAR Energy Georgia Chief Executive Officer Mahir Mammadov told Vesti.az in a June 12 interview.

“I know many such people who did return to Georgia,” said Mammadov in reference to ethnic Azeri migrants. “If earlier there was talk that Azerbaijanis and Georgians are leaving Georgia, I think now there will be talk about their return.”

Some ethnic Azeris migrants complained that Baku hampered their ability to resettle by erecting bureaucratic barriers. Azerbaijani legislation does not permit dual citizenship, and many Azeri migrants “face red-tape and corruption” to receive the papers needed to stay and work in Azerbaijan, according to one migrant.

The movement back to Georgia probably isn’t going to be huge, as Azerbaijan is the country with the more rapidly growing economy. Yet, the movement is still significant. One wonders how Azeris there feel about the differences in the political and corruption situations from one side of the border to the other. Also, if the Azerbaijani health system is any indicator, you may want to remain skeptical about those hospitals.

Written by Aaron

September 19, 2011 at 5:38 pm

More On Azerbaijani Visas, Regarding Eurovision

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Eurovision is pushing for the change they want to see in the Azerbaijani visa process. Obviously, having a simplified or more loose visa regime is a bonus for Eurovision, as having the song contest in a country with difficult visa rules makes the coming attraction much more difficult to fill with wild fans. There are many good reasons why a country like Azerbaijan should have an easier visa process, like the tourism industry Azerbaijan wants to develop. Apparently, though, those reasons haven’t made a strong enough argument. In their stead, here is Eurovision to make the case:

Eurovision Executive Supervisor Jon Ola Sand was speaking to RFE/RL in an exclusive interview on September 1, as the contest’s governing body, the so-called Reference Group, met in Baku for the first time.

“It’s paramount for us that during Eurovision weeks, people be able to come to Azerbaijan; the contestants, the delegations, journalists be able to come in and work freely,” Sand said. “It is very important for us. We have asked the government to simplify the visa rules. It should be easy to come and work here.”

Last October, the Azerbaijani authorities toughened visa regulations for foreigners. Until then, it was possible to obtain a visa on arrival at Baku airport.

I don’t think there is much to say about this except that we should wait and see. Whatever change probably won’t come very soon, but I’m interested in seeing if the Azerbaijani government responds at all, either positively or negatively, to the request.

Written by Aaron

September 4, 2011 at 3:43 pm

Azerbaijan Toppled by Tajikistan, Dushanbe Runs Up the Flagpole

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We knew this day would come: Azerbaijan no longer holds the title of “Country with the Tallest Flagpole”.

It’s been a while since we’ve checked in on Baku’s world-leading flagpole, but you can catch up on the story from last year here, here, and here.  I have no idea what this means for Azerbaijan or Tajikistan, other than one of these parties is likely seething at the other for stealing the spotlight.  Will tourists still want to go to Baku now that it no longer has the tallest flagpole in the world?

Here’s the story, from Reuters:

Aug 31 (Reuters) – Tajikistan, the poorest of the 15 former Soviet nations, has entered the Guinness Book of Records by erecting the world’s tallest unsupported flagpole, officially touted as a symbol of its upcoming independence day.

“This flag is tasked to consolidate the achievements of our independence — peace, unity and national harmony,” President Imomali Rakhmon said in a speech late on Tuesday as the giant flag was slowly raised on the 165-meter (541-feet) high pole perched in the center of the capital Dushanbe.

Now that Baku’s flagpole has helped this developing country deal with its problems of corruption, unemployment, and income inequality, let’s hope the same can happen in Tajikistan, a country which just spent millions of dollars on a flagpole instead of addressing the 47% of its population living on $2 a day or less.

One other bit: yesterday, President Aliyev phoned his Tajik counterpart, President Imomali Rahmon.  Think they talked about the flagpole?

Written by Aaron

September 1, 2011 at 6:23 am

Azerbaijan: Technology Boom?

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Occasionally, blips flit across the news ticker about Azerbaijan and its desire to develop into an information and communications technology hub. A little ways back, I wrote about Azerbaijan’s proposed East West Informational Superhighway, a regional project to increase access to information via the Internet, among other media. It looks like a fairly unique project to which, geographically, Azerbaijan is well-suited. However, we can’t forget that Azerbaijan has some very real obstacles when it comes to technical savvy. Today’s story from Trend illustrates this well:

Azerbaijan ranked the fifth amongst the countries where a broad penetration of the Trojan program of Win32/Hodprot was recorded since the beginning of the year, the ESET Company reported.

Trojan Win 32/Hodprot has been designed for download to computer for various malicious software aimed at remote banking services.

The first three countries, who have infected with Trojan Win 32/Hodprot, include Russia, Ukraine and Kazakhstan, where there is also the activity of other families of banker Trojans.

Yikes. That’s not a ranking anyone seeks out. Yet, it’s not really a surprise. Going to internet clubs in Azerbaijan can be a shady prospect, as picking up viruses from the common-use computers on your flash drive is highly likely. It’s not rare that a number of computers, even at well-administrated computer centers, will be rendered useless by the malicious software invading the systems. All of these issues can be attributed to user errors. Azerbaijanis, in my experience, are not well-educated on the various dangers from downloading songs, movies, and others. And they aren’t good at sniffing out various internet scams.

In addition to that, we also know that Azerbaijan is a ‘leader’ in software piracy. I wrote about that last year as the Economist released research showing both Armenia and Azerbaijan among the worst trespassers of intellectual property laws. This is true, again, even at the best computer clubs in Azerbaijan. The local IREX information center started up last fall with all brand new computers. It took a very short time to figure out that all of the versions of Windows were counterfeit copies. And that’s at a computer center administrated jointly by USAID and an international development agency. We should have higher expectations for those entities, right?

In spite of these obstacles, Azerbaijan is still aspiring to becoming a informational and communications technology leader. Certainly, we can be impressed that I can have high-speed internet at my home in a less-developed region of the country. The president has staked out a position that seeks ICT development as a serious part of Azerbaijan’s future economy. The Information Technology Minister claims to be targeting students for better IT education.

Identifying the IT sector as a viable economic driver and focusing on IT education is an important start. Yet, if Azerbaijan is really seeking to become a leader in this sphere, they are going to need to work on basic internet safety knowledge for its population. Picking up viruses by going to internet clubs is not good for a computer’s health and usefulness. At this point, the education system is not equipped to give students an adequate education on computer basics, so most of the learning is either through computer courses by people who aren’t well-trained or through using the pirated, virus-laden software. Azerbaijan will also have to focus on actually enforcing anti-piracy laws. It’s incredibly difficult to take seriously an IT effort when everyone is using pirated and corrupted software. If I’m going to be trusting Azerbaijan with an information superhighway, I’d like to know that the technology they are using isn’t copped off and corrupted. And we certainly don’t want to be putting information on systems that are chock-full of Trojan viruses that will steal our money.

Written by Aaron

August 6, 2011 at 3:47 pm

The Market at Work: Price Controls and Transportation

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This post is low on academic rigor and high on anecdotal evidence. Also likely high on boring information about transportation from Baku to Lankaran (sorry). Travel from Baku to Lankaran by bus has been curiously difficult as of late, whereas for the first year and a half of my time here, getting to Lankaran from the Baku bus station was never a problem. Recently, including both this week and last week, it’s been difficult to get a seat on the bus. Instead of waiting around for another bus to roll in, I’ve had to take the smaller, non-air-conditioned overglorified vans. There have been long lines awaiting the buses, withe 20-30 people waiting after the big buses are full.

I’m less concerned about the ride itself than I am about why I can no longer get a regular bus from Baku to Lankaran. What’s changed? I think we’ve got two forces here, both having to do with a government-mandated change in the bus service. One has to do with the conditions of the bus ride, and the other has to do with price.

First, the buses have improved. I wrote about that here. We now have larger, air-conditioned buses shuttling back and forth, and this is a significant improvement over the the previous buses which were stuffy and hot, less comfortable. The bus then was not ideal. However, with the government’s focus on tourism lately, the new buses are likely a godsend from those with a stake in Lankaran tourism.

Second, the price for the bus is stuck at 5 AZN. It’s not any more, not any less. And this is probably a price that has come down from above, as well. The powers that be want a cheap, comfortable option for getting to Lankaran. I cannot imagine this would be the market rate, with all of those folks waiting by the bus to get a seat.

So those are the positive signs for bus transportation. Another thing that has happened is that train prices rose drastically. While conditions on the trains haven’t changed, the prices have more than doubled and in some cases increased by more than 150%. That’s a serious price hike. And now the cheapest, most uncomfortable ticket for the train is the same price as a bus seat. And those train spots don’t come with air conditioning. It’s become a pretty reliable event for me to be able to buy tickets the afternoon before boarding the night train. Before the price hikes, I had to get there an hour before the ticket window opened in order to get my ticket.

So now we are left with the over-glorified vans, the marshrutkas. With the buses attracting more people, and the bus price set at 5 AZN, marshrutkas have actually seen an increase in price. It’s now 6 AZN to Lankaran. Why is this? Seems to me that the marshrutka drivers now have to make up for a loss of clientèle due to the new buses. Since the marshrutkas seem to operate outside the (slightly) more regulated world of buses, they can likely charge whatever they need to make sure they are still making a profit. Here’s a great example of a government-regulated market (the buses) side-by-side with a less-regulated market (marshrutkas), causing a strange manipulation of the price structure (pay more, get a lesser service).

Written by Aaron

July 27, 2011 at 2:16 pm