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Azerbaijan as a Model of Civility in the Caspian Region

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­­­To many around the world, Azerbaijan is considered a remote and mysterious place. If they have even heard of it. This is surprising because it borders four countries that have commanded much global attention over the past few years; Russia, Georgia, Armenia, and Iran.

This may be because, save for its conflict with Armenia over the Nagorno-Karabakh region, the country doesn’t have as much drama to offer the world. They are much more concerned about peace, security, sovereignty, and political independence; things that don’t normally dominate headlines.

Azerbaijan was the first and one of the very few Muslim-majority countries that is both truly democratic and secular. It has a separation of powers among three branches: executive, legislative, and judicial. It is one of the few Shia-majority countries. It has also proven to be very strategic geopolitically in that it has several important alliances both regionally and internationally. Turkey, a Sunni-majority country is one of these important alliances. The two are very culturally and linguistically similar and Turkey has backed Azerbaijan in all its major disputes including the conflict over the Nagorno-Karabakh region.

Strikingly, Azerbaijan has robust relations and a hearty trade agreement with Israel and still somehow has a warm relationship with Iran – even in the face of recent accusations that Israel is using Azerbaijan as a base for its military operations against Iran. There was some tension between the two countries when Ahmadinejad was Iran’s president but things have gotten much better since President Rouhani took the reins. Even though there are some issues surrounding Iran’s nuclear program and international sanctions, the border between Azerbaijan and Iran is open and they have pretty solid trade agreements. They share a lot of history, culture, ethnicity, and religion – even though Azerbaijan is much more secular and allows religious freedom. It is also much friendlier towards the West and even allows women to wear whatever they choose. There have been some minor tensions between Baku and Tehran over these issues but because Azerbaijan has been so gracious towards Iran in regards to joint exploration and production of oil in the Caspian Sea, these disagreements have not become too serious. Since most of the Caspian Sea’s deposits are either in the center or to the north of the Sea and this agreement would give Iran a more equal share, this has given them a considerable opportunity to boost their economy.

Speaking of economies, Azerbaijan’s economy is very strong due to its vast oil and natural gas reserves. The country has a complex system of trestles, pipelines, and causeways that connect the oil reservoirs off-shore in the middle of the Caspian Sea. This isn’t too surprising as they’ve been at it for a long time. In fact, Azerbaijan is the builder of the world’s first off-shore oil platform and the Baku port is the largest and busiest harbor in the Caspian Sea. Even though it has been more than a decade since the country declared its independence, the transfer of ownership of land and businesses from the state to individuals has been delayed. While most agricultural ventures are privatized, the government controls the oil and energy industries. Contrary to government track records, it is doing a surprisingly good job at it. It has paired with Western companies that will use less damaging methods and equipment to extract its natural gas and petroleum deposits. The same goes for the oil and natural gas found beneath the Caspian Sea. Azerbaijan, with the help of more than twenty companies, led by the United States and Britain, are in the process of building a three billion dollar pipeline from Baku through the republic of Georgia to the Turkish port of Ceyhan. From there, the oil will be shipped to the United States which will even further boost Azerbaijan’s economy.

In addition to Azerbaijan’s oil industry, it also has rich supplies of other natural resources, a highly profitable and diversified agricultural industry, and fisheries – another benefit from the Caspian Sea. The country is a major source of caviar, which is considered a very valuable export. Even with problems stemming from pollution and overfishing, Beluga caviar – which comes from a very particular species of sturgeon found here – still fetches a high price and contributes to the country’s economy.

The Azeris, who enjoy a very low unemployment rate by world standards, take great pride in their country and place a very high value on sovereignty. While there have been ethnic conflicts and clashes over religion, most minorities – including Jews and Christians – have lived in relative peace. With the exception of the violence that erupted in Nagorno-Karabakh, Azerbaijan has a very casual and relaxed atmosphere. In fact, despite their Islamic faith, many Azeris drink alcohol; this is forbidden in most other Muslim countries. This contradictory approach to Islam is most likely due to new ideas that are increasingly challenging the traditional ways of doing things. Their rapidly changing environment may be forcing them to make adjustments to their attitudes and way of life. And there are no doubts here that their willingness to adapt will ultimately pay off.

In fact, almost everything about the way Azerbaijan is handling their transition from a Soviet Republic to a modern, sovereign nation is admirable. From their ambitious efforts to preserve their ancient history to their desire to promote peace and stability in the region to their ability to build and maintain diplomatic relationships with key players in the Caspian Sea region (and beyond), Azerbaijan appears to have a very promising future. Their approach may have the potential to change the way the West and the Muslim world relate. After all, they were the first Muslim country to embrace theaters, operas, and modern-day universities. Now, they hold membership with 38 international organizations including the United Nations and work closely with NATO. The annual Caspian Oil and Gas Show held in Baku helps bring important visitors into the country and, even though some political activists have used the high-profile EU games event to shine a light on government corruption within the country, Azerbaijan will still gain a lot of positive visibility and will, in the near future, prove to the world it has earned the right to be recognized as – thanks to the Caspian Sea – one of the great producers of oil and natural gas. While there are of course challenges involving the fight against corruption, more equitable economic development, and continued relations in the often troubled Caucasus, on the whole there is much to praise in Azerbaijan. Though relatively small, it may just one day be able to accurately consider itself a model for civil and open interstate relations in this critical part of the world.

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Eastern Europe

Latvia developed new tasks for NATO soldiers

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Member of the Latvian Saemas’ national association “Everything for Latvia!” and Freedom”/LNNK Jānis Dombrava stated the need to attract NATO troops to resolve the migration crisis. This is reported by la.lv.  In his opinion, illegal migration from the Middle East to Europe may acquire the feature of an invasion. He believes that under the guise of refugees, foreign military and intelligence officers can enter the country. To his mind, in this case, the involvement of the alliance forces is more reasonable and effective than the actions of the European border agencies. Dombrava also noted that in the face of an increase in the flow of refugees, the government may even neglect the observance of human rights.

The Canadian-led battlegroup in Latvia at Camp Ādaži consists of approximately 1512 soldiers, as well as military equipment, including tanks and armoured fighting vehicles.

Though the main task of the battlegroup in Latvia is country’s defence in case of military aggression, Latvian officials unilaterally invented new tasks for NATO soldiers So, it is absolutely clear, that Latvian politicians are ready to allow NATO troops to resolve any problem even without legal basis. Such deification and complete trust could lead to the full substitution of NATO’s real tasks in Latvia.

It should be noted that NATO troops are very far from being ideal soldiers. Their inappropriate behaviour is very often in a centre of scandals. The recent incidents prove the existing problems within NATO contingents in the Baltic States.

They are not always ready to fulfill their tasks during military exercises and training. And in this situation Latvian politicians call to use them as border guards! It is nonsense! It seems as if it is time to narrow their tasks rather than to widen them. They are just guests for some time in the territory of the Baltic States. It could happen that they would decide who will enter Latvia and who will be forbidden to cross the border!

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Eastern Europe

Changes are Possible: Which Reforms does Ukraine Need Now?

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Photo: Robert Anasch/Unsplash

The past 16 months have tested our resilience to sudden, unexpected, and prolonged shocks. As for an individual, resilience for a country or economy is reflected in how well it has prepared for an uncertain future.

A look around the globe reveals how resilient countries have been to the COVID-19 pandemic. Some have done well, others less so. The costs of having done less well are almost always borne by the poor. It is for this reason the World Bank and the international community more broadly urge—and provide support to—countries to undertake economic and structural reforms, not just for today’s challenges but tomorrow’s.

One country where the dialogue on reform has been longstanding and intense is Ukraine. This is particularly true since the economic crisis of 2014-2015 in the wake of the Maidan Revolution, when the economy collapsed, and poverty skyrocketed. Many feared the COVID pandemic would have similar effects on the country.

The good news is that thanks to a sustained, even if often difficult, movement on reforms, Ukraine is better positioned to emerge from the pandemic than many expected. Our initial projection in the World Bank, for example, was that the economy would contract by nearly 8 percent in 2020; the actual decline was half that. Gross international reserves at end-2020 were US$10 billion higher than projected. Most important, there are far fewer poor than anticipated.

Let’s consider three reform areas which have contributed to these outcomes.

First, no area of the economy contributed more to the economic crisis of 2014-2015 than the banking sector. Powerful interests captured the largest banks, distorted the flow of capital, and strangled economic activity. Fortunately, Ukraine developed a framework to resolve and recapitalize banks and strengthen supervision. Privatbank was nationalized and is now earning profits. It is now being prepared for privatization.

Second, COVID halted and threatened to reverse a five-year trend in poverty reduction. Thanks to reforms of the social safety net, Ukraine is avoiding this reversal. A few years back, the government was spending some 4.7 percent of GDP on social programs with limited poverty impact. Nearly half these resources went to an energy subsidy that expanded to cover one-in-two of the country’s households.

Since 2018, the Government has been restructuring the system by reducing broad subsidies and targeting resources to the poor. This is working. Transfers going to the poorest one-fifth of the population are rising significantly—from just 37 percent in 2019 to 50 percent this year and are projected to reach 55 percent in 2023.

Third, the health system itself. Ukrainians live a decade less than their EU neighbors. Basic epidemiological vulnerabilities are exacerbated by a health delivery system centered around outdated hospitals and an excessive reliance on out-of-pocket spending. In 2017, Ukraine passed a landmark health financing law defining a package of primary care for all Ukrainians, free-of-charge. The law is transforming Ukraine’s constitutional commitment to free health care from an aspiration into specific critical services that are actually being delivered.

The performance of these sectors, which were on the “front line” during COVID, demonstrate the payoff of reforms. The job now is to tackle the outstanding challenges.

The first is to reduce the reach of the public sector in the economy. Ukraine has some 3,500 companies owned by the state—most of them loss-making—in sectors from machine building to hotels. Ukraine needs far fewer SOEs. Those that remain must be better managed.

Ukraine has demonstrated that progress can be made in this area. The first round of corporate governance reforms has been successfully implemented at state-owned banks. Naftogaz was unbundled in 2020. The electricity sector too is being gradually liberalized. Tariffs have increased and reforms are expected to support investment in aging electricity-producing and transmitting infrastructure. Investments in renewable energy are also surging.

But there are developments of concern, including a recent removal of the CEO of an SOE which raised concerns among Ukraine’s friends eager to see management independence of these enterprises. Management functions of SOE supervisory boards and their members need to remain free of interference.

The second challenge is to strengthen the rule of law. Over recent years, the country has established—and has committed to protect—new institutions to combat corruption. These need to be allowed to function professionally and independently. And they need to be supported by a judicial system defined by integrity and transparency. The move to re-establish an independent High Qualification Council is a welcome step in this direction.

Finally, we know change is possible because after nearly twenty years, Ukraine on July first opened its agricultural land market. Farmers are now free to sell their land which will help unleash the country’s greatest potential source of economic growth and employment.

Ukraine has demonstrated its ability to undertake tough reforms and, thanks to the COVID-19 pandemic, has seen the real-life benefits of these reforms. The World Bank looks forward to providing continued assistance as the country takes on new challenges on the way to closer European integration.

This article was first published in European Pravda via World Bank

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Liberal Development at Stake as LGBT+ Flags Burn in Georgia

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Photo: Protesters hold a banner depicting U.S. Ambassador to Georgia Kelly Degnan during a rally against Pride Week in Tbilisi, Georgia July 1, 2021. Credit: REUTERS/Irakli Gedenidze

Protests against Georgia’s LGBT+ Pride parade turned ugly in Tbilisi on July 5 when members of the community were hunted down and attacked, around 50 journalists beaten up and the offices of various organizations vandalized. Tensions continued the following day, despite a heavy police presence.

On the face of it, the Georgian state condemned the violence. President Salome Zourabichvili was among the first with a clear statement supporting freedom of expression, members of parliament did likewise and the Ministry of Internal Affairs condemned any form of violence.

But behind the scenes, another less tolerant message had been spread before the attacks. Anxiety about this year’s events had been rising as a result of statements by the government and clergy. Prime Minister Irakli Garibashvili suggested the march “poses a threat of civil strife.” The Georgian Orthodox Church meanwhile condemned the event, saying it, “contains signs of provocation, conflicts with socially recognized moral norms and aims to legalize grave sin.”

For many, these statements signified tacit approval for the abuse of peaceful demonstrators. Meanwhile, the near-complete absence of security at the outset of the five-day event was all too obvious in Tbilisi’s streets and caused a public outcry. Many alleged the government was less focused on public safety than on upcoming elections where will need support from socially conservative voters and the powerful clergy, in a country where more than 80% of the population is tied to the Georgian Orthodox Church.

The violence brought a joint statement of condemnation from Western embassies. “Violence is simply unacceptable and cannot be excused,” it said. The Pride event was not the first and had previously been used by anti-gay groups. Violence was widespread in 2013 — and the reality of attacks against sexual minorities in Georgia remains ever-present.

In a socially conservative country such as Georgia, antagonism to all things liberal can run deep. Resistance to non-traditional sexual and religious mores divides society. This in turn causes political tension and polarization and can drown out discussion of other problems the country is marred in. It very obviously damages the country’s reputation abroad, where the treatment of minorities is considered a key marker of democratic progress and readiness for further involvement in European institutions.

That is why this violence should also be seen from a broader perspective. It is a challenge to liberal ideas and ultimately to the liberal world order.

A country can be democratic, have a multiplicity of parties, active election campaigns, and other features characteristic of rule by popular consent. But democracies can also be ruled by illiberal methods, used for the preservation of political power, the denigration of opposing political forces, and most of all the use of religious and nationalist sentiments to raise or lower tensions.

It happens across Eurasia, and Georgia is no exception. These are hybrid democracies with nominally democratic rule. Armenia, Georgia, Kyrgyzstan, and others have increasingly more in common, despite geographic distance and cultural differences.

Hungary too has been treading this path. Its recent law banning the supposed propagation of LGBT+ materials in schools must be repealed, European Commission President Ursula von der Leyen said on July 7. “This legislation uses the protection of children . . . to discriminate against people because of their sexual orientation . . . It is a disgrace,” she said.

One of the defining features of illiberalism is agility in appropriating ideas on state governance and molding them to the illiberal agenda.

It is true that a mere 30 years since the collapse of the Soviet Union is not enough to have built a truly liberal democratic state. Generations born and raised in the Soviet period or in the troubled 1990s still dominate the political landscape. This means that a different worldview still prevails. It favors democratic development but is also violently nationalistic in opposing liberal state-building.

Georgia’s growing illiberalism has to be understood in the context of the Russian gravitational pull. Blaming all the internal problems of Russia’s neighbors has become mainstream thinking among opposition politicians, NGOs, and sometimes even government figures. Exaggeration is commonplace, but when looking at the illiberal challenge from a long-term perspective, it becomes clear where Russia has succeeded in its illiberal goals. It is determined to stop Georgia from joining NATO and the EU. Partly as a result, the process drags on and this causes friction across society. Belief in the ultimate success of the liberal agenda is meanwhile undermined and alternatives are sought. Hybrid illiberal governments are the most plausible development. The next stage could well be a total abandonment of Euro-Atlantic aspirations.

Indeed what seemed irrevocable now seems probable, if not real. Pushback against Georgia’s Euro-Atlantic choice is growing stronger. Protesters in front of the parliament in central Tbilisi violently brought tore the EU flag. Twice.

The message of anti-liberal groups has also been evolving. There has been significant growth in their messaging. The anti-pride sentiment is evolving into a wider resistance to the Western way of life and Georgia’s Western foreign policy path, perhaps because it is easily attacked and misrepresented.

To deal with this, Western support is important, but much depends on Georgian governments and the population at large. A pushback against radicalism and anti-liberalism should come in the guise of time and resources for the development of stronger and currently faltering institutions. Urgency in addressing these problems has never been higher — internal and foreign challenges converge and present a fundamental challenge to what Georgia has been pursuing since the days of Eduard Shevardnadze – the Western path to development.

Author’s note: first published at cepa

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