Azerbaijan: Building Bridges for President Aliyev's Re-Election?

An ambitious infrastructure upgrade campaign has taken Azerbaijan by storm in recent months, but some economists point to the 2008 presidential vote as the prime reason for the state-funded building boom and question the projects' transparency.

Infrastructure projects will account for a staggering 87 percent of this year's government investment programs, recently revised to total $2.2 billion (1.9 billion manats), according to Oktai Ahverdiyev, chief of the Cabinet of Ministers' finance department.

Under this plan, by the end of 2007, Azerbaijan will have five new airports – some in the remotest parts of the country. Aside from existing international airports in the western town of Ganja, Azerbaijan's second largest metropolitan area, and the exclave of Nakhchivan (bordering Armenia and Iran), an international airport is planned for the southern town of Lenkoran, close to the Iranian border. Airports in Sheki, a popular tourist destination in northern Azerbaijan, and Zaqatala, a small nearby town, will handle smaller planes. The cost for these facilities has not been made public.

Extensive highway and bridge projects are also in the works. In 2007, the government plans to spend $500 million on the construction and repair of highways – a figure that is 80 percent higher than 2006 expenditures, APA news agency reported, citing the Ministry of Transportation. Ten new bridges and 18 underpasses are planned for Baku to lessen the city's growing traffic congestion. In addition, repairs will be carried out on 40 bridges between Baku and the Russian border, and a new highway will be built from the Azerbaijani capital to the Iranian border.

At an opening ceremony for one of Baku's new bridges in March, President Aliyev declared that the bridge building shows Azerbaijan's economic muscle. "It means that we are becoming strong," media outlets reported him as stating. The 200 million manat ($232 million) allocated for the bridges and underpasses "will not be to make a profit," he elaborated, stressing that "[a]ll of this is done for the people's welfare."

Senior government official Ahverdiyev has stated that "poverty reduction" will also be included in the campaign. Planned expenditures will target improvement of "the water supply, sanitation systems, education [system] and healthcare," Aheverdiyev told Trend news agency recently.

Some questions, however, surround the details.

"Azerbaijan's infrastructure needs to improve, but first it should be seriously studied to define priority highways and bridges [for work], which of them can really eliminate problems with traffic jams," argued economist Azer Mehtiyev, deputy chairman of Baku's non-governmental Center for Economic Research. Money for these improvements has so far been allocated without such a hit list, he added.

That leaves particular questions about the viability of the five new airports, observed Zohrab Ismaylov, head of the non-governmental Center for Market Economy Assistance in Baku. "I am not sure that airports in Zaqatala or Lenkoran can give a profit even in the mid-term future," Ismaylov said. Zaqatala has a population of around 26,000 people, according to official statistics. Lenkoran's population stands at under 50,000. Both towns are in non-industrial areas with no emphasis on exports.

Both Mekhtiyev and Ismaylov, however, contend that the large-scale investment projects have as much to do with the 2008 presidential elections as they do with infrastructure improvements.

Decisions about the infrastructure projects "come suddenly during [Aliyev's] trips to the regions and in meetings with residents," observed the Center for Economic Research's Mehtiyev. "There is no clear