Azerbaijan’s corruption of oil industry threatens country’s democracy

Dec 05, 2006 01:00 AM

Rajan Menon, an international relations professor, said the oil industry's corruption is rooted in a deeper network of political corruption that threatens the democracy of Azerbaijan. Menon led a discussion about oil and corruption in Azerbaijan in Lehigh University.
A documentary created by Czech journalists was shown before the discussion.

Menon visited Azerbaijan six years ago during a trip to explore post-Soviet countries, focusing on oil producing countries. He said he observed corruption in the country’s political system and its oil industry.
Azerbaijan's oil industry is flourishing and is supposed to profit the Azerbaijani people. In reality, he said about 90 % of the profit ends up in the pockets of government officials at the helm of the oil industry, while members of the working class struggle to pay for basic needs.

Menon said he observed the stark economic contrast on his visit to Azerbaijan, noting that although cities and oil-producing areas such as Baku seem modern, theoutlying lands where many working-class citizens live are highly underdeveloped. Menon said many Azerbaijanis exhibited cynicism toward the oil industry and the Azerbaijani government.
Although Azerbaijan is a republic with what Menon calls the "trappings of democracy," he said there is a swelling of the government and shrinking of the state.

The Aliyev family has created a dynasty in Azerbaijan with a firm grip on the lucrative oil industry through the State Oil Company of the Azerbaijani Republic, Menon said. Their power is maintained as elections are fixed in their favour. Menon said they have created a political vacuum with no way to pass over power.
"At the end of the day there's little check and balance on the government," Menon said. "The ability to get oil companies to act in a conscionable way is only as good as the state."

The acts of the oil industry are not solely related to finances and human rights. The documentary shown before the discussion pointed out that rampant pollution, contamination and radiation are major problems. Because of the poor conditions at oil platforms, oil and steam evaporate together, creating a gas that is difficult and hazardous to breathe. Meanwhile, officials in charge of the rigs claim they are maintaining ecological stability.
Menon said Azerbaijan's rigged elections are largely overlooked by the United States. Oil-dependent countries overlook the political corruption in Azerbaijan because some, such as the United States, are profiting from Azerbaijan's oil industry, Menon said.

Azerbaijan signs contracts with countries across the world, including a substantial contract with British Petroleum. Azerbaijan received loans from BP, the World Bank and the European Bank to build up its industry. The costs of interest on these loans are passed on to the working class, according to the citizens featured in the documentary.
This situation creates hostility within the Azerbaijani communities toward the United States and other oil-consuming nations. One Azerbaijani woman said in the documentary that US investments are supposed to benefit Azerbaijanis, but instead profit Americans. She also claimed BP, the World Bank and the European Bank know about the corruption in Azerbaijan's oil industry.

The Czech journalists who produced the documentary sent the film to those accused of knowing the corruption but have yet to receive a response. Menon said many oil-producing countries are like Azerbaijan in that immense profits are made on the sale of oil, but most of the money goes to wealthy officials while the average citizen receives just enough to survive. Although dissent is discouraged in Azerbaijan, at least it is allowed.
"To a certain limit you can meet with the political opposition," Menon said.

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