Cheap Oil Turns into a Bullet: Why did Azerbaijan Shoot at this Very Moment?
In early March I (together with other 2 experts from Armenia) was invited to one of CIS countries to participate in a seminar-discussion, mainly devoted to regional cooperation and integration issues. Central Asian countries, as well as 3 Caucasian states—Armenia, Georgia and Azerbaijan—were among the participants.
Formerly, years ago, I had the opportunity to take part in discussions with Azerbaijanis. I was convinced: if there are no cameras and an issue of publicizing, they usually show normal behavior and try not to touch upon Karabakh conflict (if the discussion doesn’t cover the topic). However, they are more cautious not towards us—Armenians, but towards their authorities. Even being sure for 100%, what they say will remain within those walls, they don’t slightly criticize their authorities.
This was a real surprise for me. Azerbaijani delegates—a young man and a girl, were criticizing Aliyev’s regime in such a way, that it was quite unexpected.
They said economic condition of Azerbaijan, slightly said, is sad. They said, by not implementing any serious reform for years, and by not initiating any structural changes in economy, Aliyev’s regime relied only on petrodollars. And the country faces problems as a result of drop in price for oil. They added, to implement the budget, state racketeering is performed, tax enterprises are charged with penalties comprising a few tens of million dollars. In their words, workplaces are reduced; there is a company which has reduced 6000 workplaces. These words, if necessary, may be proven by my Armenian partners present there.
Surely, we have known before, that state of affairs in Azerbaijan isn’t so well. However, learning this at first hand, that was really something. Frankly speaking, I hardly restrained myself not to ask which companies they were talking about. It’s difficult to understand, whether rejoice or upset by such information. Unfortunately, experience showed that under domestic policy and social issues in Azerbaijan, border provocations become more frequent. They attempt to divert people’s attention to the direction of an external enemy.
I consider, nobody will deny that one of the reasons of unleashed activities by Azerbaijan is economic hardship (slightly said). However, recent tension has deeper reasons. Economic Activity Index (EAI) of Azerbaijan since 1996 is introduced in the chart below.
Throughout these years, by selling oil, Azerbaijan has increased its GDP, budget entries and military budget. In this period, it purchased a large amount of military equipment, being sure that the fighting outcome will be decided by the number of tanks and multiple rocket launchers at their disposal. They didn’t hurry, and waited to more and more increase the arsenal, being convinced that oil will always provide touchable incomes to them. Then the reverse process started—economic growth slowdown (the curve on the chart shows growth tendency). This country came to a standstill.
Azerbaijan concluded 2015 with only 1.1% economic growth. International structures anticipate maximum 0.6% growth for 2016. However, judging from current developments, growth in this country is less possible to be recorded. The country’s GDP reduced by more than 3% throughout January-February. Price for oil doesn’t persistently restore. Everybody says—oil era is in the past.
Azerbaijani officials, who are used to easy money, start to realize that time already works against them. Taking a glance backward, they clarify that they missed the peak of their economic power. If in mid-2000s 25-35% economic growth was recorded in Azerbaijan, currently the situation will more worsen (they have neither a political will nor a desire for a good economy). And it turns out, that, this is the moment, then it may be late. And we have what we have on border now.
Of course, this isn’t a scientific analysis, moreover, hardly it’ll be possible to seriously analyze marasmic mentality and motives of the country’s authorities. This is simply an opinion grounded by indices. However, in any case, one shouldn’t underestimate economic incitements. Current escalation is the last chance for Aliyev’s regime, not to lose power. Which, however, will approach to their end.
P.S. Name of the country at the beginning of the article wasn’t mentioned, as the identity of those criticizing the country will be uncovered, and they’d have problems. The reason isn’t only the fact that all the details, upon agreement, weren’t to be published, but also, that we need likewise persons in the neighboring country, who at least, may try to impose something on their compatriots.
By Babken Tunyan
