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Expanding regional rivalries: Saudi Arabia and Iran battle it out in Azerbaijan

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Credit: Wikimedia Commons

It’s the pot calling the kettle black. As Saudi Arabia accuses Iran of seeking to encircle it with its support for Houthi rebels in Yemen as well as Qatar, the kingdom and the Islamic republic are extending their bitter rivalry beyond the Middle East into the Caucasus.

The two countries’ latest battleground is oil-rich Azerbaijan, an authoritarian, majority Shia Muslim but secular former Soviet republic on Iran’s northern border with a substantial ethnic population in Iran itself. Recent Saudi overtures came amid reports that Azerbaijan’ s security services had warned the government about Iran’s growing influence in the country.

The report suggested that an informal lifting in 2013 of a ban on preaching by Islamic scholars linked to Iran that had been quietly imposed in a bid to stem the flow of Azerbaijani Sunni Muslims joining the Islamic State in Syria and Iraq had enabled the Islamic republic to make inroads.

“Iran’s religious activities have become particularly successful,” said Azerbaijani journalist Kenan Rovshanoglu in a study of religious freedom in the country.

Published by Turan, an independent news agency, the study noted that 22 of Azerbaijan’s 150 madrassas or religious seminaries were controlled by Iran.

Iran and Azerbaijan have long tiptoed around each other with both countries concerned that the other could use its religious and/or ethnic affinities to stir trouble. Azeri speakers account for at least a quarter of Iran’s population.

Azerbaijan is, for its part, worried about Iran’s close ties with Armenia. Azerbaijan and Armenia are locked into a decades-long conflict over Nagorno-Karabakh, a disputed Armenian enclave in Azerbaijan.

Iranian concerns about Azeri nationalism were fuelled when supporters of Tractor Sazi FC, a top club in Tabriz, the capital of the Iranian province of East Azerbaijan, that is a symbol of Iranian Azeri identity, chanted Azeri nationalist slogans three years ago during protests against the government’s environmental policy and alleged anti-Azeri corruption in soccer .

Azar News, leaked in 2015 a letter allegedly written by Brigadier-General Gholam-Asgar  Karimian, the club’s former chairman, detailing how Traktor Sazi could be used to unite Azeris against what the general termed “racist and separatist groups.”

Azar is operated by the National Resistance Organization of Azerbaijan (NROA), a coalition of opposition forces dominated by the Mujahedeen-e-Khalq, a group that enjoys Saudi support but was tainted when it moved its operations in 1986 to Iraq at a time that Iraq was at war with Iran.

The letter said the groups were campaigning for a “study the mother tongue day.” It suggested that the mother tongue referred to was Talysh, a dying northwest Iranian language that is still spoken by at most a million people in the Iranian provinces of Gilan and Ardabil and southern Azerbaijan. The letter implied that the groups General Karimian was concerned included Azeri separatists.

The letter appeared to advocate measures to weaken the separatists by combatting widespread racist attitudes towards Azeris and improving services in East Azerbaijan. Racial attitudes towards Azeris is something Traktor Sazi knows a lot about.

“Wherever Tractor goes, fans of the opposing club chant insulting slogans. They imitate the sound of donkeys, because Azerbaijanis are historically derided as stupid and stubborn. I remember incidents going back to the time that I was a teenager,” said a long-standing observer of Iranian soccer.

Discussing Azerbaijani policy towards Iran, Elkhan Sahinoglu, head of the Center for Applied Politics at Baku’s Western Caspian University, noted that Azerbaijan had no intention of interfering in Iran’s domestic affairs, but could not “disregard the future of the Azeris who reside in Iran.”

Iran’s Islamic Revolution Guards Corp said in November that it had “dismantled a terrorist team” in East Azerbaijan that was “affiliated with global arrogance,” a reference to the United States, and its allies, including Saudi Arabia. The announcement came weeks after Iran said that it had eliminated an armed group in a frontier area of the province of West Azerbaijan that borders on Iraq, Azerbaijan and Turkey and is home to Azeris as well as Kurds.

Columnist Huda al-Husseini highlighted Saudi interest in Azerbaijan in a recent column on Al Arabiya, the television network owned by Middle East Broadcasting (MBC) in which the government reportedly obtained a majority share as a result of Crown Prince Mohammed bin Salman’s recent asset and power purge packaged as a campaign against corruption.

In an article entitled ‘Will Iran turn Azerbaijan into another Iraq?’, Ms. Al-Husseini, quoting an anti-Iranian Iraqi author, Raghd Abdel Rida al-Jaberi, asserted that Azerbaijan feared that it would follow in the footsteps of Iraq where Iran allegedly had destroyed the Iraqi military and turned Iraqis into slaves who had been convinced “that washing and rubbing the feet of Iranians who are heading to visit (Imam) Hussain’s tomb brings them closer to heaven no matter what they do afterwards.”

In a media environment that appears to be pre-occupied with supporting the government’s often sectarian-tinted, anti-Iran policy rather than reporting facts, Ms. Al-Husseini suggested that Azerbaijan President Ilham Aliyev’s recent attendance of a cultural festival in the kingdom at King Salman’s invitation was part of an effort to resist Iranian encroachment.

Military delegations from the two countries earlier this month discussed closer military cooperation including holding joint military exercises “as well as a number of other issues of mutual interest,” according to Azerbaijani media.

Azerbaijan has also over the years built close military ties to Israel, which like Saudi Arabia, is staunchly opposed to Iran. Israel and Azerbaijan discussed, prior to the 2015 international agreement that curtailed Iran’s nuclear program, using Azerbaijani airbases had it opted for taking out the Islamic republic’s nuclear facilities. The agreement put an end to talk about a military strike.

The bottom line is that if Iran is seeking to encircle Saudi Arabia, Saudi Arabia and Israel are trying to encircle Iran. The mirror image of Saudi Arabia’s belief that Iraq is Iran’s model for Azerbaijan is an Iranian suggestion that Lebanon is Israel’s model.

“Tel Aviv wants to Lebanonize (Azerbaijan) under a ‘new periphery doctrine.’ This means that Tel Aviv intends to create a new periphery region and encircle Iran through its presence in the (Iraqi) Kurdistan Region and Azerbaijan,” said Iranian analyst Salar Seifoddini. Mr. Seifoddini was referring to Israel’s policy of periphery that seeks to forge relations with those bordering on Israel’s enemies.

Dr. James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies, co-director of the University of Würzburg’s Institute for Fan Culture, and the author of The Turbulent World of Middle East Soccer blog, a book with the same title, Comparative Political Transitions between Southeast Asia and the Middle East and North Africa, co-authored with Dr. Teresita Cruz-Del Rosario and three forthcoming books, Shifting Sands, Essays on Sports and Politics in the Middle East and North Africaas well as Creating Frankenstein: The Saudi Export of Ultra-conservatism and China and the Middle East: Venturing into the Maelstrom.

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Eastern Europe

As Georgians Fight Each Other, Russia Gleefully Looks On

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Earlier today, the leader of Georgia’s major opposition party – United National Movement (UNM) – was detained at his party headquarters by government security forces, the most recent escalation in a drawn-out political crisis. This could well be the beginning of a new troubled period in the country’s internal dynamics, with repercussions for the country’s foreign policy.

The optics favor the opposition. Images of armed and armored police storming UNM’s headquarters was damaging to the ruling party, Georgian Dream (GD). Western diplomats expressed grave concern over the events and their repercussions. Protests have been called, and will likely be covered closely in Western media.

What comes next, however, is not clear.

Much will depend on what long-term vision for the country the opposition can articulate in the aftermath of the most recent events. It was not that long ago that UNM was declining as a political force in Georgian politics. There is a real opportunity here. But the burden is on the opposition to make a play for the loyalty of voters beyond its circle of already-convinced supporters.

Appealing to ordinary Georgian voters is ultimately the key to resolving the crisis. Beyond the intra-party clashes about the legitimacy of the most recent elections, there is a growing chasm between political elites and the challenges faced by people in their daily lives. And tackling these challenges successfully will not be easy.

Both the ruling party and the opposition have been facing declining support from the public at large. Long-term economic problems, which have been greatly exacerbated by the pandemic, have not been credibly addressed by either side. Instead of solutions, both sides have engaged in political theatrics. For many voters, the current crisis is more about a struggle for political power, rather than about democracy and the economic development of the country. No wonder that most people consider their social and economic human rights to have been violated for decades no matter which party is in power. These attitudes help explain high abstention rates during the most recent election. Despite remarkable successes in the early years after the Rose Revolution, Georgia has lacked a long-term policy for reimagining its fragile economy since its independence and the disastrous conflicts of the 1990s.

None of this, however, should minimize the threats to Georgian struggling democracy. Today’s arrests reinforce a longstanding trend in Georgian politics: the belief that the ruling party always stands above the law. This was the case with Eduard Shevardnadze, Mikheil Saakashvili, and is now the case with the current government. For less politically engaged citizens, plus ça change: Georgian political elites for the last 30 years have all ended up behaving the same way, they say. That kind of cynicism is especially toxic to the establishment of healthy democratic norms.

The crisis also has a broader, regional dimension. The South Caucasus features two small and extremely fragile democracies – Armenia and Georgia. The former took a major hit last year, with its dependence on Moscow growing following Yerevan’s defeat in the Second Karabakh War. Today, Russia is much better positioned to roll back any reformist agenda Armenians may want to enact. Armenia’s current Prime Minister Nikol Pashinyan has been weakened, and easily staged protests are an easy way to keep him in line.

Georgia faces similar challenges. At a time when Washington and Brussels are patching things up after four years of Trump, and the Biden administration vigorously reiterates its support for NATO, Georgia’s woes are a boon for Moscow. Chaos at the top weakens Georgia’s international standing and undermines its hopes for NATO and EU membership. And internal deadlock not only makes Georgia seem like a basket-case but also makes a breakthrough on economic matters ever more unlikely. Without a serious course correction, international attention will inevitably drift away.

At the end of the day, democracy is about a lot more than finding an intra-party consensus or even securing a modus vivendi in a deeply polarized society. It is about moving beyond the push-and-pull of everyday politics and addressing the everyday needs of the people. No party has risen to the occasion yet. Georgia’s NATO and EU aspirations remain a touchstone for Georgian voters, and both parties lay claim to fully representing those aspirations. But only through credibly addressing Georgia’s internal economic problems can these aspirations ever be fully realized. The party that manages to articulate this fact would triumph.

Author’s note: first published in cepa.org

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Eastern Europe

A Fateful Step Towards Annexation

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It’s easy to lose sight of regional developments amid high political drama. The story of Alexei Navalny’s poisoning, flight to Germany, return, and arrest has dominated Russia coverage in the West. Specialists have also been focusing on the struggle over the Nord Stream 2 pipeline, and the fallout of the Nagorno-Karabakh War. Meanwhile, when in November of last year Georgia’s Russian-occupied region of Abkhazia signed a 46-point agreement to create a unified socio-economic space with Moscow, not many took note. While pitched as a move to alleviate the territory’s economic troubles, the program marks a huge step toward eventual annexation of Georgia’s region by Russia.

Multiple new provisions feature in the new document which were absent in the 2014 military agreement. The new pact creates various provisions for the sale of local real estate, among them a stipulation on dual citizenship allowing Russians to get Abkhaz passports. A whole range of laws will be introduced whereby Russian investors will be able to invest money into and buy majority shares in what still remains valuable in Abkhazia.

The latest agreement also proposes allowing the Russians to buy into Abkhazia’s energy sector. Additionally, the Abkhaz will make legislative and administrative amendments according to the Russian law in social, economic, health, and political spheres. There is also a stipulation on simplification of law procedures for Russian investors.

While this may end up giving a shot in the arm to a decrepit Abkhaz economy, the high level of harmonization with Russian laws lays the groundwork for a future merger with Russia. It is this dilemma between closer cooperation with Russia and deep fear of Russian intentions that will haunt the Abkhazian political class for the foreseeable future. Though officially the new “socio-economic” program does not involve a change in Abkhazia’s political status, Abkhaz elites fret they are heading down the path to eventual incorporation into Russia.

Criticism of the pact in Abkhazia forced the region’s leader Aslan Bzhania to forcefully deny that Abkhazia was losing any sovereignty. Instead, he emphasized the positive elements of the document, especially the re-opening of Sukhumi airport. Bzhania also cited Abkhazia’s chronic energy shortages and the acute need for Russian assistance as justification for the deal. Still, fears persist. After all, unlike South Ossetia, the other Russian-occupied region in Georgia, Abkhazia has never entertained the idea of merging with Russia.

But Russia is playing a long game. Pressure on Abkhazia has been building up gradually over the course of 2020. After the resignation of Moscow’s preferred client Raul Khajimba, Bzhania’s candidacy was regarded with suspicion by Kremlin officials. As a result, when he won, Bzhania had to make multiple visits to Moscow to kiss the ring, even as Russian funding continued to dry up amid the pandemic. The cost of resuming aid, it appears, was increasing economic harmonization and with the looming threat of eventual assimilation.

With Russian investments into the energy sector and land purchases, Abkhazia will slowly lose its last vestiges of de-facto independence. On an economic level, Abkhazia is far richer than South Ossetia. But controlling it has other virtues. Out of all the separatist regions Russia controls, Abkhazia is arguably the most strategically located. A passage from the North to the South Caucasus, the region is also famous for its harbors and military infrastructure. Control over it gives Russia capabilities to check NATO/EU expansion into the region.

Russian plans in Abkhazia should be also seen within the context of Russia’s push to solidify its presence in the South Caucasus, especially in the aftermath of events in Karabakh and Russia’s peacekeeping mission there. Economic inroads into Abkhazia also mean a further distancing of other potential players such as Tbilisi and the collective West.

Author’s note: first published in cepa.org

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Eastern Europe

In Azerbaijan, Human Capital Investments are the Key to Resilient Growth in the era of COVID-19

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Photo: World Bank

By limiting access to health, education, social protection, and jobs, the COVID-19 pandemic threatens to reverse human capital gains in Azerbaijan. In a recently published report, Survive, Learn, Thrive: Strategic Human Capital Investments to Accelerate Azerbaijan’s Growth, the government of Azerbaijan and the World Bank identify the main challenges to building and activating human capital and put a spotlight on high-impact interventions that respond to constraints.

Fadia M. Saadah, World Bank Human Development Regional Director for Europe and Central Asia, reflects on the success and challenges of the past, and opportunities for the World Bank Group to partner with the government of Azerbaijan in ensuring resilient growth, powered by human capital investments.

Q. What do you see as the main challenges facing human capital formation and activation in Azerbaijan?

The government of Azerbaijan has achieved a great deal in terms of human capital development. Over the last five years, enrollment in higher education rose 21 percent. The introduction of mandatory health insurance supported an increase in the use of essential primary care level and improvements in efficiency. Contributory pensions and poverty-targeted social transfers raised the incomes of the bottom 40 percent substantially, facilitating household-level investments in health and education.

Despite this progress, gaps in human capital investments persist. On standardized tests, students from wealthier families score the equivalent of three years of schooling above students from poor families, an indication of wide inequalities in learning outcomes. Out-of-pocket payments remain high, despite the launch of mandatory health insurance, reducing access to services needed to control the rise of noncommunicable diseases. Only one in five households in the poorest quintile benefits from the targeted social assistance program, and labor force participation remains low, especially among women.

Azerbaijan’s Human Capital Index is 0.58, meaning that a child born today in Azerbaijan would be 58 percent as productive as she could have been as an adult if she had enjoyed full health and had benefited from a complete education. The COVID-19 pandemic has reduced access to social services and is projected to lead to an economic contraction of 4.2 percent in 2020. The government has risen to the challenge of recovering the gains in health and learning outcomes and ensuring that human capital development remains central to the political agenda.

Q. Azerbaijan faces the dual challenge of recovering from the COVID-19 pandemic and strengthening health, education, learning, and employment services to facilitate growth. What strategic investments do you recommend for the human development sector in the short and medium term?

The government aims to balance the medium-to-long term objective of reforming social systems with the ongoing COVID-19 pandemic response. Hence, in the health sector, we recommend the digitalization and interoperability of health information systems to support comprehensive surveillance and facilitate continuity of care in the treatment of noncommunicable diseases. Reforming health financing to increase public health spending and protect households from out-of-pocket costs will be important to increase health care access.

As schools reopen, Azerbaijan is investing in remediating learning losses. Doing so may involve ensuring that schools follow health protocols to reduce their risks of becoming the source of group infections, providing students with financial and nonfinancial incentives not to drop out of school, and equipping schools and training teachers to better manage in-person and distance learning. We also recommend establishing a fund to support innovation in higher education.

Social assistance will be essential to ensuring that the most vulnerable households are able to access social services. Improving the coverage of the targeted social assistance program and increasing public financing for these transfers will further improve households’ resilience to consumption shocks. Including employers in the design and implementation of active labor market programs will help link people to jobs.

The potential for human capital investments to drive growth and resilience in Azerbaijan is significant. An analysis by the World Bank, The Changing Wealth of Nations 2018, reports that human capital comprises 64 percent of global wealth. If Azerbaijan ensured complete education and healthcare among children and adults, its long-run per capita gross domestic product could be 1.67 times higher than it is today.

Q. The World Bank has partnered with Azerbaijan on landmark reforms since independence. How do you see the engagement evolving over the next few years?

The next phase of the human capital policy dialogue in Azerbaijan can benefit from a focus on putting this agenda into practice through investments in human capital. The World Bank Group remains committed to providing technical and financial support for operationalizing and implementing this ambitious strategy. We highlight important areas of engagement in education, health, social protection, and jobs below.

Education: The World Bank Group has long supported the government in the development of the education system, including reforms in general education and formulation of the country’s education sector development strategy. The government has introduced per capita financing in tertiary education and a remuneration and quality assurance system in secondary education.

The Second Education Sector Development Project, which closed in 2016, focused on improving the quality of teaching and learning in general education. Through ongoing policy dialogue, the World Bank Group will continue to support education reforms, especially to increase access to early childhood education and spur innovation in tertiary education.

Health: The World Bank Group has engaged in the health sector over the past few years through policy dialogue and provision of technical expertise to support health financing reforms. At the request of the government, it is facilitating knowledge exchanges that may inform the implementation of mandatory health insurance, drawing on the experiences of Kazakhstan, the Republic of Korea, and Costa Rica.

With funding from the Japan Policy and Human Resources Development Fund, the World Bank Group is supporting efforts to improve the governance of digital data and leverage claims data to strengthen provider payment mechanisms within the mandatory health insurance system. Over the next few years, the World Bank Group will continue to engage in policy dialogue on priority issues, including health insurance, e-health and telemedicine, and the development of an integrated claims management system.

Social Protection and Labor: In the past few years, the World Bank Group has supported efforts by the government to raise the most vulnerable people in Azerbaijan out of poverty, by investing in the implementation of the National Employment Strategy and critical social assistance and disability reforms.

A recently approved Employment Support Project aims to improve vulnerable people’s access to employment by enhancing the scope and effectiveness of the government’s Self-Employment Program, enhancing employment services and programs, and building public sector capacity.

The Internally Displaced Person Living Standards and Livelihoods Project and Additional Financing, which closed in 2019, helped improve the living conditions and increase the economic self-reliance of internally displaced persons. The World Bank Group will continue to support Azerbaijan through ongoing policy dialogue to strengthen the social protection system as a platform to improve human capital outcomes and households’ resilience to shocks.

World Bank

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