Azerbaijan: before “the perfect storm”

In the next few years until there is no hope for a sharp rise in oil prices, Azerbaijan’s economy will be, to put it mildly, in a very difficult position. This, at first glance, is fraught with danger, as internal turmoil and a greater likelihood of escalation in the Karabakh front. It is a well known formula for the regimes in power in countries that have unresolved conflict and sitting on the resource “needle”.

Once exceeding $ 20 billion budget of Azerbaijan is now in dollar terms fell by more than two times, reaching in 2017, $ 9 billion. International reserves have declined and continue to decline with a greater rate depreciated steadily mannat, collapsing is based on petrodollars, the financial system. The rising tide of serious social unrest, when people in socio-economic difficulties go to rallies and block streets. Experts believe that in the near future, the probability of a new military adventure in the Karabakh conflict zone, which will provide an opportunity to divert the attention of Azerbaijan’s population from economic problems. Other experts, however, believe that Baku will not agree to a new large-scale military adventure, to avoid an even greater disaster. And even if Azerbaijan tries to provoke a local war and heavy losses will not be able to achieve significant results, it may cause a new wave of discontent in the country.

Both of these hypotheses, of course, have a right to exist. But at least judging by the indicators available to us, it should be noted that both militarily and in the political and socio-economic aspects of Azerbaijan is now in the position in which it is difficult to find a definitive way out of the situation.

As a result of falling socio-economic indicators, the political tension in the end will result on the street in the form of discontent with the authorities. Indicators of social tension and excessive polarization that occurs as a result of the highly unequal distribution of resources obtained from the sale of oil and gas in the neighbouring country are the highest in the former Soviet Union. In this country sometimes are “food riots”. That is, Azerbaijan has not only socio-political discontent, ethno-national problems, but the obvious tension between the owners of Offshore peninsulas and poor. And this strain shows growth trends. Now, when declining oil revenues in Azerbaijan are talking about large-scale privatization of state institutions, including the stock “Sakara”. If previously operated the formula “what is good for “Sakara””, good for Azerbaijan,” now all has completely changed. When the state organization was in dire condition and needs a new financial flows, and the state takes out loans from international donors, “what’s good for “Sakara” ceases to be good for Azerbaijan.

Therefore, this year, if by some miracle the economy of Azerbaijan will not stand on his feet, or oil prices dramatically increase, there are all preconditions for the growth of waves of social and economic rebellion. How strong will this wave is difficult to predict. In any case, the Azerbaijani authorities will try to keep it under control, not to suppress, until she gets religious-political overtones.

Why the religious-political? Because the almost complete lack of opposition in the country, as an institution and system, religion, in this case — the mosques — are the only system that is critical of secular power. At the time of this writing, and a famous Azerbaijani journalist Rauf mirkadyrov: “the Situation is that the mosque is the only system around which the opposition can gather the masses. And it doesn’t matter whether they adhere to the strict religious views or not. The main thing here political subtext, and this is the only place where you can freely criticize the authorities.”

The situation in some ways is similar to neighboring Iran in the last years of the reign of the Shah. There is also the vast majority of people who took to the streets against the Shah at the urging of religious leaders, was far from religious views. Went to meetings young girls in mini skirts, young people dressed according to the latest rules of fashion.

This explains the fear of Iran that exists among Azerbaijani elites and the military-political proximity Baku with a competitor of Iran — Israel. Now the Shiite Iran is actively working with religious leaders of Azerbaijan, sending of missionaries. So, not accidentally, Azerbaijan applies a rather rigid instrumentation suppress movements with religious and political overtones. The repression of religious leaders of Nardaran, near Baku, was the beginning of this process.

In the unenviable position of Azerbaijani authorities and military-political point of view. After completing a multimillion-dollar transactions for the sale of military equipment with Russia and Israel, this country was faced with serious problems. In the article on geography, volumes and prospects of arms trade of Russia, which was published in the Russian press, it was noted that in the near future Baku will hardly be able to afford big deals with Russia. “Still in the former Soviet Union the greatest potential to buy weapons possessed by the Azerbaijan. Starting in 2010, Baku has acquired a large package of Russian arms. Now, however, delivery is almost complete. And given the drop in oil prices and the interest of Moscow in the balance on the Karabakh front, it is hardly necessary to expect new transactions in the previous volumes,” notes the author.

Azerbaijan reduced compared to previous years, military spending in dollar terms, will be in a difficult position even in the maintenance of already purchased equipment. Varieties of military weapons, especially missile systems, tanks and so on, need maintenance, new supplies. This implies new costs, which will be very difficult to implement. If before the defensive budget of Azerbaijan amounted to several billion dollars, now it does not exceed one billion. But if this also subtract the cost of the security services, internal troops of the police and pogranichnikov, then the budget will be very modest. In terms of reducing military spending will be, to put it mildly, very difficult to keep a large army not only on the Karabakh front, but on the borders of Iran, and Navy in the Caspian sea.

“Azerbaijan has created a situation that Ilham Aliyev also decisions of foreign policy objectives must concentrate on domestic difficulties. Internal stability of the country is deceptive. The factor of Iran, the fall in oil prices and the growing number of radical religious activists — a triple blow to the government of Aliyev. A diminishing economic pie Aliev should be able to negotiate with the two groups of interests, which will be very hard to do. Hence, probably, again will be played Karabakh map, which the authorities always keep in your hands”, writes the well-known British expert Tom de Waal.

However, it is difficult, even impossible, to draw definitive and precise conclusions on this matter. In this situation the internal balance in Azerbaijan is very unstable. Now the Aliyev regime goes to the edge of the cliff and trying to balance between the escalation of the situation in the Karabakh conflict zone, the intensification of political Islam in the country and the growing influence of Iran. And this is all the necessary conditions for a “perfect storm”.