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External Implications of Domestic Reforms in Azerbaijan

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The restructuring of the governance system, the appointment of Western-educated young professionals to the leading positions, and more decisive fight against corruption in energy-rich Azerbaijan promise a quicker betterment of the internal socio-political situation and allows the country to overcome the challenges posed by volatile energy prices in the global market. These developments in the South Caucasian country have, however, some implications for the wider region in general, for its immediate neighborhood in particular.

Azerbaijan’s political system has gone through a remarkably stable period since 1993 when Heydar Aliyev was elected the President of the then just two-years old republic in gravely troubled times for the country amidst the war with Armenia and tensed domestic situation. In a short period of time, President Aliyev managed to reach ceasefire with Armenia, quell separatist movement in the south, sign important contracts with Western oil companies, and navigate the country through troubled geopolitical waters. There have been few changes to the political system established at that time as it, supported by lucrative revenues from oil and gas exports, provided necessary conditions to implement the overall priorities of the country. As an American expert aptly observed, “There was simply enough money to keep almost everyone happy”.

The latest political and economic challenges the country confronted due to new realities in the international relations, however, revealed some shortcomings of this system and necessitated comprehensive reforms. Important to note that, this process had started even before the start of sharp fluctuations in oil prices since 2014. The optimization of the public services at an unprecedent pace exemplified by the establishment of the Azerbaijani Service and Assessment (ASAN) in 2012 strictly reduced the Soviet-style bureaucratic procedures marred by unbridled corruption. These measures were back then lauded by many international observers primarily for “eliminating the conditions that [were] conducive to corruption”.

The existence of strong centralized government has allowed the authorities to initiate and implement such amendments with immediate effect at all levels of the political establishment. The past year of 2019 marked the zenith of these changes in Azerbaijan. The replacement of the old cadres, some of whom held their positions at the highest posts in the government since 1990s,with younger and mostly Western-educated people, the dissolution of the unpopular parliament on the ground of its failure to catch up with the reform process and calling for snap parliamentary elections were some of the changes made in 2019. In the course of this process, in December, for the first time in the history of post-Soviet Azerbaijan, a regional executive head was arrested on charges of corruption and theft committed during his service.

The reforms have been, however, not confined to the political branch of the government. Over the last few years, the country has made immense efforts to diversify economy and reduce the dependency on oil and gas reserves that still supply major segment of national revenues. The government targets a quick development of the so-called non-oil sector which primarily includes tourism, agriculture, national industry, transport, logistics and communications. President Ilham Aliyev repeatedly highlighted in the recent year that the reforms would be expanded, and they are inevitable and irreversible.

 The provision of the favorable business environment and independent judicial system has been on the top of the agenda. The achievements reached have also reflected in the Economic Freedom report by the Heritage Foundation where Azerbaijan’s ranking progressed from 91stto 60th in 2019. According to the report, Azerbaijan’s “overall score has increased…, led by a dramatic rise in judicial effectiveness and higher scores for property rights and government integrity that offset declines in labor freedom and fiscal health.”The new situation makes it possible for the country to recover from the economic shocks of 2015 when it went through devaluation twice in a year.

These developments in Azerbaijan have, however, some implications for the wider region in general, for the country’s immediate neighborhood in particular.

First and foremost, as the reforms promise that the country will maintain its leading role in the economic map of the South Caucasus, Azerbaijan will likely continue to have necessary financial resources to invest in large-scale transportation and economic projects. The new generation of technocrats, transparency in financial management, and fair judiciary are other factors that bode well for the future of Azerbaijan’s economy. This is highly important for the South Caucasus as most of the monumental projects in the region would have not been possible without the financial backing of Azerbaijan.

 For example, the construction of the Baku-Tbilisi-Kars railway, which connects Azerbaijan with Georgia and Turkey and boosts the region’s appeal as a hub on the transportation route between Europe and China, has been financed solely by the Azerbaijani side. Likewise, the ongoing construction of a new Baku International Sea Trade Port (Alat), which targets to be the biggest multi-purpose port in the Caspian Sea, with a potential capacity to handle 25 million tons of cargo per year, will be completed thanks to economic recovery of the country.

In the meantime, Baku continued to expand its relations in the neighborhood with major partners like Turkey, Russia, Kazakhstan, Belarus and Ukraine, embarking in 2019 on ambitious transportation and energy projects, starting from China’s Belt and Road Initiative, and to launching TANAP gas pipeline on November 30, 2019, targeting the European market. These projects have a regional significance and are as hugely important for the economy of the participating countries from the region as for that of Azerbaijan.

The internal political and economic situation in Azerbaijan has also a very critical link with the regional security in the South Caucasus. The country’s multi-faceted relationship with its north-western neighbor, Georgia, has proved itself utmost important for the latter in the most troubled periods. Azerbaijan provided Georgia with crucial support in 2008 which helped its neighbor to overcome the challenges posed by sudden disruption of the trade with the country’s major partner Russia. Azerbaijan, with its oil and gas exports and investments, have often played an indispensable role for the Georgian economy. In 2019, Azerbaijanis ranked first in the number of foreigners visiting Georgia which provide an important contribution to its tourism revenues. The political stability and economic well-being in Azerbaijan aimed to be maintained by the recent reforms will boost the existing dynamics between the two countries which are vital for their national security in general.

The domestic reforms in Azerbaijan provides also a useful opportunity to revitalize the country’s relationship with its Western partners. The optimization of the public services, the rejuvenation of the government and the new political atmosphere built by the recent changes are all in line with the targets declared by the Eastern Partnership program of the EU and need to be supported. The new situation also promises a push for Azerbaijan’s relations with the United States as Svante Cornell, Director of the American Foreign Policy Council’s Central Asia-Caucasus Institute, suggested in October 2019: “The reform effort in Azerbaijan provides an opportunity for the U.S.-Azerbaijan political dialogue to be centered on positive cooperation, and thus to strengthen rather than weaken the bilateral strategic dialogue.”

Dr. Vasif Huseynov is a senior fellow at the Center of Analysis of International Relations (AIR Center) in Baku, Azerbaijan.

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Eastern Europe

Russia aids Italy in fight against COVID-19: Why we should be aware

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You’ve probably heard this week that Russia ­- with such ceremony, might I add – sent planes with its military medics to Italy to help in the fight against the coronavirus. This charity event was nothing more than a PR stunt by the Russian army, the sole purpose of which was to spread Moscow’s propaganda narratives and influence the Italian public, as well as politicians.  

It seems that some Italians are aware of this as well. The newspaper La Stampa cited high-ranking officials and reported that 80% of the aid sent by Russia turned out to be “completely useless”, adding that it is being used as a cover by Vladimir Putin to further his own political and economic ends. Right from the beginning, there was no humanitarian element to this charade.

Moscow, as one would expect, denied this, stressing the “good” nature of its intentions. Sadly, such sentiments are shared also by Italian politicians. As reported by La Stampa, the Italian prime minister agreed to receive aid from Russia to please Moscow and improve bilateral relations.

Currently, an increase in Russian disinformation can be observed in Italian social media – fake accounts are thanking Russia for the support, some are continuously slandering the EU and NATO about their inability and individual useful idiots are even tearing off EU flags and replacing them with Russian ones. And all of this is eagerly reported by the pro-Kremlin and anti-EU media outlets.

Unfortunately, a large part of Italians, crippled by the crisis, will believe the Kremlin’s propaganda campaign, and we can soon expect increased criticism of the EU and NATO coming from Rome along with improved relations between Italy and Russia. I think this will most likely begin by Rome attempting to cancel the sanctions imposed against Moscow.

The coronavirus is a global issue, but it seems that Moscow for quite some time has been lying about the spread of the virus in Russia in order to paint itself to the rest of the world as civilization’s last refuge. Rumors are spreading among Russian social media users about the special genes and formidable immune systems of the Russian nation, and this has resulted in many, including the elite, believing that COVID-19 will not affect them. At the same time, an unprecedented outbreak of “pneumonia” continues in Russia.

Despite Putin ordering to implement emergency measures to combat the coronavirus (the constitutional vote has been postponed and everyone in Russia received a paid week off from work), it is clear that the Kremlin’s primary objective is to exploit the new crisis to gain diplomatic advantage over the West.

This means that not long from now other EU and NATO member states could receive offers of “aid”, and this also includes Latvia. Let’s hope that our politicians, unlike the Italians, will have enough mental clarity to resist the Kremlin’s lies and refuse any ambiguous offers before it’s too late.

Imagine such a scenario: the crisis caused by COVID-19 in Europe continues to worsen: the US, the UK and other partners of Latvia are too busy with their internal problems and are no longer able to support Europe’s eastern flank against Russia. The response capabilities of NATO are paralyzed, and the West is unable to guarantee even diplomatic support for Latvia. Moscow understands this, and the Kremlin decides to act by turning to the Baltic states with an act of “goodwill” in the form of 10 military aircraft containing “humanitarian” aid.

Looking back at history, I clearly remember how “humanitarian aid” trucks from Moscow helped during the Ukraine crisis when Russia occupied Crimea. Kremlin-hired trolls worked even more vigorously by glorifying the Kremlin, which had no issues of using the pretext of humanitarian aid to occupy the Crimean Peninsula.

Italy saw this scenario and clearly lost. What would our own government do in such a situation?

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Eastern Europe

Defeating Systemic Corruption? Anti-Corruption Measures in Post-Revolution Ukraine and Armenia

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Ukraine and Armenia offer case studies on the challenges of recovering from post-Soviet authoritarian legacy, fraught with rampant corruption. As a matter of fact, systemic corruption has long condemned the two post-Soviet countries to a vicious circle of underdevelopment, bad governance and inability to implement fundamental economic and political reforms. Not surprisingly, the anti-corruption reforms have been put at the heart of post-revolution state-building in both countries.

Notably, Ukraine’s former President Petro Poroshenko’s government significantly reduced the corruption, particularly in the gas, banking, and government procurement sectors. As a sign of moving the fight against corruption to the highest possible policy agenda, the Ukrainian government introduced the National Anti-Corruption Bureau  and the Specialized AntiCorruption Prosecutor’s Office NABU as well as Specialized Anti-Corruption Prosecutor’s Office (SAPO)  established in 2015 with the participation of civil society and donor countries. Yet, the effectiveness of these institutions has been questioned by several observers, pointing to insufficiency of anti-corruption measures amidst unrelenting efforts by power  groups to retain their outsized influence over law enforcement and justice. In essence, Poroshenko’s steady decline as a political powerhouse significantly owed  to his failure to eradicate corruption.

Meanwhile,  VolodymyrZelensky’s promises of defeating rampant corruption resonated with Ukrainians, who placed a great deal of faith in his ‘game-changing’ agenda.

The Rada’s first day was marked with the adoption of important pieces of anti-corruption legislation, including the removal immunity from prosecution for MPs and the proposal to provide the National Anti-Corruption Bureau of Ukraine (NABU) with the right to undertake autonomous surveillance.

Moreover, Zelensky’s anti-corruption efforts resulted in investigations and subsequent arrests of  some of President Poroshenko’s associates, including Oleg Hladkovsky, a top Defense official; a People’s Front party MP and the former head of the Rada’s defense committee SerhiiPashinsky; ex-deputy minister for the occupied territories Yuri Hrymchak; and Poroshenko Bloc MP YaroslavDubnevych, etc. Furthermore, Zelensky put the High Anti-Corruption Court into action,  that passed a bill   reinstating criminal liability for the illicit  enrichment of officials.

Similarly, the post-revolution government in Armenia criminalized  illicit enrichment and intensified its anti-corruption campaigns. The government pushed for a series of high-profile trials against former senior officials, most notably ex-president  Robert Kocharyan, former high-ranking officials Manvel Grigoryan,  Aram Harutyunyan, Seyran Ohanyan and others. This extended to former defense minister and outstanding former ruling Republican Party member, Vigen Sargsyan, who was charged with “abuse of power,”  as well as to former  Chief of Police Alik Sargsyan  –  charged   with   covering up  illegal post-election crackdown on opposition protesters in Yerevan in 2008 and with  destroying evidence of the “overthrow of the constitutional order” led by then President Kocharyan. However, these arrests and investigations have not yet led to court rulings. Essentially, both Pashinyan’s and Zelensky’s fight against corruption has so far focused on punishing former governments’ members or associates. The question remains if the anti-corruption measures will move beyond selective prosecution of former officials to the unequivocal application of “zero tolerance for corruption” principle.

This, in turn comes down to the furtherance of democratic reforms , leading to the advancement of good governance  practices and eradication of the systemic corruption in both countries.Some  critics have been skeptical about the effectiveness of anti-corruption reforms in these countries, positing that while governments   embark on “crowd-pleasing affairs,” much needs to be done to address the more systemic problems that the new governments inherited.

Both Zelensky and Pashinyan have placed a special emphasis on defeating judicial corruption. While former Ukrainian President Poroshenko hailed the  judicial reform  as “the mother of all reforms,” there was not much to reinforce government’s pledges of fundamental reforms.

In an effort to rectify this, in autumn 2019, President Zelensky embarked on judicial reforms. More specifically, he dismissed the High Qualification Council of Judges (the body responsible for attestation and selection of judges), announced plans to reload the Higher Council of Judges (the highest self-governance body of judges) and halved the number of Supreme Court judges.   Remarkably, while the Venice Commission, an advisory body of the Council of Europe,  praisedZelensky’s government’s judicial reform, it expressed concern over certain aspects of the reform, pertaining to “important issues of the rule of law” in Ukraine. The Commission criticised the situation, where the politicians are seen to get too much power to determine whether the sitting judges remain in their position or not. Similarly, the judicial corruption is one of the most harrowing challenges facing Pashinyan’s government. Following the controversial release of second President Robert Kocharyan in May 2019, Pashinyan contended that the judiciary is a remnant of the former corrupt system which would cook up conspiracies against the Armenian people.  As a result, he called for a mandatory “vetting” of all judges to the all the courts in the country because of their ties to the previous regime. The tension between Pashinyan’s government and the “remnants” of the former regime reached a point, where the Armenian parliament adopted a bill on holding a referendum on suspending the powers of a majority members of the Constitutional Court. Pashinyan would largely treat the current Constitutional Court as an impediment to completing the revolution in Armenia. More specifically, it was regarded as an instrument that prevented the people from exercising their right to form a government in the country in the 1996, 1998, 2003, 2008, 2013 presidential elections. Notably, PACE co-rapporteurs for the monitoring of Armenia, called on Armenian political players to refrain from actions and statements that could be perceived as exerting pressure on the judiciary.  Essentially, Pashinyan threw his weight behind changing the Constitutional Court, contending that the latter represents the corrupt regime of Serzh Sargsyan, rather than the people of Armenia. Furthermore, he regarded the opponents of the referendum as “anti-state” forces.

Overall, the judicial reform remains as big challenge in both countries, as its success is critical to breaking with the authoritarian legacies.

 Based on the comparative analysis of anti-corruption strategies in developing countries, there are three main  observations to make regarding  Ukraine’s and Armenia’s trajectories.

First, in both countries corruption has been deeply entrenched and a result of the post-soviet authoritarian legacy. Essentially corruption has permeated every section of society and become a way of life in both countries . A major impediment to democratic state building, including fight against corruption in Armenia  and Ukraine is related to prevailing post-Soviet “informality”. The use of informal networks and connections in exchanges of favours, gift-giving along with other informal activities have been been deeply ingrained in both Ukrainian and Armenian societies. Therefore, the state apparatus, as well as education, healthcare, judiciary and law enforcement have long been dominated by informality.Thus, quite often the  institutions that have been set up to fight corruption  run up against deeply entrenched habits of graft in society and politics. Even though it would be an oversimplification to contend that Armenian and Ukrainian societies are congenitally hooked on graft as a way of life, the “culture of corruption” will not disappear overnight. Studies show that Ukrainian citizens tend to  “condemn” high-level corruption”  yet “regard petty corruption as a justifiable evil”. As a matter of fact, countries with long histories of informal illiberal practices and corruption often face tremendous challenges in eradicating these blights .Therefore eradicating the culture of corruption and informality should be an urgent priority on the reform agendas of new Ukrainian and Armenian governments.

 Second, one of the biggest challenges of anti-corruption reforms in developing and particularly transitional countries is the persistence and prevalence of corrupt practices by political and economic elites. More specifically, the residual influence of oligarchy presents a threats to the fight against systemiccorruption. Clearly, the political elite’s robust commitment to eradicating systemic corruption is indispensable. Meanwhile, inconsistencies and the weakness of a commitment lead to a situation, under the banner of “zero tolerance for corruption” governments keep playing a “tolerant corruption” game. Although political will may not be sufficient, it is a necessary condition to defeat corruption. The case of Romania demonstrates that the political will to defeat corruption may well make up the absence of a tradition of the rule of law and democracy. More specifically, the European Union pressure, along with the electoral pressure and the political will of the domestic political elite combined to ensure the establishment of the rule of law and defeating corruption in the Romanian judiciary .

Third, external factors including the anti-corruption programs of international donors have proved conducive to the fight against corruption.  While Ukraine’s choice for Europe and fervent desire to irreversibly depart from the orbit of the Russian influence is a crucial impetus to defeat corruption, Armenia’s centrality in the Russia-led socio-political order has remained intact. Nevertheless, Pashinyan’s government’s anti-corruption efforts prompt to posit that international efforts may well resonate with prevalent social norms in Armenia. A question remains if the legitimacy of the anti-corruption norms promoted particularly by the European Union will lead to their smooth implementations in Ukraine and Armenia.

Last but not least, the lessons from the successful anticorruption crusades of Singapore and Hong Kong show the need for anticorruption reform initiatives to be participatory and inclusive of all stakeholders including public and private sectors as well as civil society. Thus, it is absolutely essential for Armenian and Ukrainian civil society organizations to further develop institutional and professional capacity to contribute to anti-corruption reforms and influence their implementation.

Overall, the grounds for cautious optimism need to get reinforced to ensure that systemic corruption will no longer undermine democratic state-building in both countries.

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Eastern Europe

The EU Introduces New Vision for Eastern Partnership States

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The EU has published an Eastern Partnership (EaP) policy which outlines the Union approach for 2020 and beyond towards the six former Soviet states bordering Russia. This comes amid fears that the EU has not been able to fully implement its previous Eastern Partnership policy as Georgia and Ukraine, the states which most successfully implemented the reforms, have not become EU members.

The new policy document is therefore an important step, serving as a continuation of the EU’s resolve to further integrate the 6 former Soviet states into the Union’s institutions.

The new policy document is a result of consultations launched in 2019 by the European Commission. The previous document made an emphasis on engaging with civil society to ensure effective reforms. There also was a focus on increased public accountability, advanced human rights and local development.

The new policy document outlines changes in 3 out of 4 priority areas. The EU again will work on building stronger economy, connectivity and stronger society as a guarantee.

In the new policy, bilateral cooperation will remain the main way to ensure the implementation of policy recommendations. According to the document, “the EU will continue to provide support in bilateral, regional and multi-country fora, including targeted sectoral assistance in line with the principles of inclusiveness and differentiation. In addition, the EaP will continue to be flexible and inclusive, allowing countries to tackle common and global challenges jointly in a wide range of areas, fostering regional integration”.

Overall, there are the following long-term Eastern Partnership policy objectives the EU plans to implement beyond 2020: building resilient, sustainable and integrated economies, accountable institutions; increasing the rule of law and general security; making progress in building environmental and climate resilience; implementing a resilient digital transformation; building a fair and inclusive societies.

There are also purely geopolitical clauses. For example, “the EU and the partner countries will invest in physical connectivity and infrastructure (in transport, energy and digital) as underpinning conditions for economic development”.

The new document also underlines the importance of increasing bilateral trade which builds upon the previous progress. For example, in the 2010s, EU-EaP trade has nearly doubled, turning the partner countries into the EU’s 10th largest trading partner.

This has the geopolitical ramification of Russia gradually losing the economic battle as the EaP states diversify their economies. The EU is the first trading partner for four partner countries (Azerbaijan, Georgia, Moldova and Ukraine), while for Armenia and Belarus the EU is the second biggest trading partner.

The diversification in exports of goods of EaP states helps to better integrate those states into the global value chains. Another sign of closer interaction between the EU and EaP states is the number of companies trading with the Union. In Georgia, the number increased by 46%, from Moldova by 48% and from Ukraine by 24%.

Building upon this achievement, the new document calls for deepening of “the economic integration with and among the partner countries, particularly that of the three associated countries through continued support for the full implementation of the current DCFTAs”.

Another geopolitical realm covered by the new document is transport. The EU will be focusing on upgrading key physical infrastructure in road, rail, port, inland waterway and airport facilities, and logistics centers, in order to further strengthen connectivity between the EU and the partner countries and among the partner countries themselves. This is in connection with the energy connectivity in the South Caucasus, as the Southern Gas Corridor is nearing completion with first gas from Azerbaijan likely reaching the EU in 2020.

Yet another important sphere of cooperation will be strengthening the EU’s cooperation with the partner countries to create a strong financial system for sustainable economic growth.

Within the measures to minimize organized crime, the EU will continue its support for the EaP states to cooperate with EU justice and home affairs agencies to fight human trafficking and trafficking of illicit goods (notably drugs and firearms), etc.

Among other policies the EU’s support for the cyber resilience of the partner countries stands out. This is particularly important for Georgia as the country was recently subject to massive external cyber attacks.

Author’s note: First published in Georgia Today

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