Azerbaijan is being forced to cut its defense budget, once the pride of the nation, as a result of the collapse in oil prices.
Other oil-dependent states in the region like Kazakhstan and Russia also will likely have to make across-the-board budget cuts because of the drop in oil prices. But the situation appears most dire in Azerbaijan, not least because it is locked in a conflict with Armenia over the disputed territory of Nagorno Karabakh.
Azerbaijan's government has consistently bragged about its defense budget, which, starting in 2011, it claimed exceeded Armenia's entire state budget. Azerbaijan's Foreign Ministry spokesman Hikmat Hajiyev told the American newspaper Defense News in a story published this week that that "defense spending had enabled the Azerbaijani armed forces to be supplied with requisite advanced weaponry needed to re-take 'its Armenian-held territories.'"
“It is our priority and we will continue to increase military spending," said Azerbaijan President Ilham Aliyev in 2014. "Over the past 10 years, our military spending has increased more than 20-fold, and our spending allocated to the armed forces is approximately twice as large as Armenia’s overall state budget."
Russia's post-Soviet security alliance is showing more and more signs of fracturing along regional, cultural, and political fault lines, as Armenia criticizes other members for not taking its side against Azerbaijan.
Armenia is probably the most loyal member of the alliance, the Collective Security Treaty Organization. And Yerevan has long complained about the fact that some of the other CSTO members, like Kazakhstan, Kyrgyzstan, and Tajikistan, have supported Azerbaijan in its conflict with Armenia in Turkic and Muslim fora.
That tension has been heightened recently as a result of increasing violence along the line of contact between Armenian and Azerbaijani forces around the disputed Nagorno Karabakh territory, as well as the fallout between Russia and Turkey.
The CSTO's Turkic members, Kazakhstan and Kyrgyzstan, have sympathized with Turkey over Russia in that dispute to a degree that is suprising given Russia's far stronger economic and strategic ties in Central Asia. And if they're not willing to support Russia -- which really has the ability to either pressure or help the Central Asian states -- they are certainly far less likely to support Armenia, which which they have little in common other than a fading Soviet legacy.
The schism doesn't have only to do pan-Turkic sympathies between Kazakhstan, Kyrgyzstan, Turkey, and Azerbaijan. Belarus, too, has refused to take the Kremlin's side against Turkey. Just as important as any cultural ties is a reluctance among all of Russia's allies to sign up for Moscow's increasingly unpredictable foreign policy ventures.
Azerbaijan on January 28 denied reports of having asked for billions of dollars in aid from the International Monetary Fund and World Bank to avert an economic crisis amidst plunging oil prices.
“Requesting a $4-billion aid package is out of the question,” claimed Azerbaijan’s Finance Minister Samir Sharifov. “We ourselves lend money to others,” he said, dismissing reports by The Financial Times and Reuters. Citing the International Monetary Fund, the reports said that the IMF and the World Bank were considering requests from Azerbaijan for loans of $3 billion and $1 billion, respectively.
A decade ago, booming oil and gas sales allowed Azerbaijan to stop borrowing from the IMF, and the Caspian-Sea country began to turn from international borrower to international lender. Low oil prices, though, have depleted Azerbaijan’s wellspring and led to dramatic depreciation of the energy-propped national currency, the manat.
The Financial Times said that the donor groups were scheduled to arrive in Baku on February 4 to discuss options for slowing the country’s economic tailspin. Sharifov ardently denied these reports.
Azerbaijan also has rejected thoughts that the oil-price crunch could force it to scale back on another upcoming mega-vanity project. Plans to host a Formula-1 race in the capital, Baku, this June. remain on track, a project spokesperson insisted, Motorsport.com reported.
The United States Congress has held a rare closed hearing on the Nagorno Karabakh conflict, as leading members of Congress are pushing for new conflict-resolution measures favored by Armenia but opposed by Azerbaijan.
The House Foreign Affairs Committee held the hearing last week, with James Warlick, the U.S. co-chair of the OSCE Minsk Group, testifying. Warlick did not comment on the content of the hearing, except to tweet: "I thank the @HouseForeign affairs committee and its chair @RepEdRoyce for hosting me to discuss #NKpeace. We agreed to work for a settlement."
It's not clear why the hearing was closed, or why it was held now. But tension has been getting worse along the so-called "line of contact" between the Armenian and Azerbaijani sides. Armenian forces won control of the territory, which is de jure part of Azerbaijan, in a war in the early 1990s, but the ceasefire that has held since then has become increasingly tenuous, with violence along the line at its highest level since the war formally ended in 1994. "This is a war, and I would ask you to use the term ‘war’ and not to use the phrase ‘ceasefire violation’ because, in effect, we don’t have a ceasefire anymore,” Defense Ministry spokesperson Artsrun Hovannesyan told reporters in December.
They blame the opposition. Or “religious radicals.” Or even poachers. But whatever they do, even as oil prices dip to record lows, officials in energy-rich Azerbaijan are not blaming a recent string of regional protests on the economy.
Azerbaijani police on January 14 reported making 55 arrests connected to protests over the last two days in towns to the north, south and east of the capital, Baku.
Protesters in Siyazan, a town 115 kilometers north of Baku, clashed with riot police equipped with tear gas and rubber bullets. The Kavkazsky Uzel news service reported that some 300-400 residents rallied in front of Siyazan’s town hall on January 12 and 13 against continued inflation and a massive recent depreciation of the manat, the national currency. The Azerbaijani service of RFE/RL carried footage of what appeared to be military trucks entering Siyazan.
In the opposite corner of the country, protesters on January 12 blocked a highway in the town of Liman, about 215 kilometers south of Baku. Regional officials met the demonstrators to hear their concerns over growing consumer prices and a ban on cash-sales of tobacco and alcohol (since “temporarily” lifted).
Official suspicion for the disruptions has fallen on alleged activists from the opposition Popular Front of Azerbaijan and Musavat Parties — one young Popular Front activist, Turan Ibrahim, has been arrested for seven days — as well as “various radical and religious extremist forces.”
Citing police sources, the pro-government news site APA claimed that “more than 60” people had been detained, and 50 subsequently released. An exact tally was not immediately available. The government itself has not released an official statement.
Scores of arrests appear to have been made in Nardaran, located about 30 kilometers northeast of the capital, Baku, since a raid last November that left at least six dead. Among others, the head of the town’s council of elders, Natig Karimov, was detained last week on charges of treason and espionage. Local spiritual leader Taleh Bagirzade was arrested in November.
Authorities claim that the town’s residents harbored plans for an armed coup and colluded with an unnamed foreign power — believed to mean Azerbaijan’s southern neighbor, Iran -- against Azerbaijani security interests. Claims long have run rampant in Azerbaijan, a predominantly Shi'a country, that Iran’s Shi’ite government tries to influence or stir up trouble in Nardaran.
As Iran expressed an interest in monitoring the actions taken in Nardaran, Baku started to pull back from recent expressions of chumminess over potential joint energy-export projects.
In the two weeks since Saudi Arabia announced that it was forming a yet another "coalition" to combat Islamist terror, the allegiances of the former Soviet states have come under increasing scrutiny. All of them, however, appear to believe that they have little to gain from picking a side and continue to spurn the advances from various suitors, including Russia and the United States in addition to the Saudis.
When Saudi Arabia announced its 34-member coalition of majority-Muslim states, there was a conspicuous lack of any post-Soviet republics in its ranks. Azerbaijan said it was considering the idea, and apparently still is.
A Saudi newspaper reported that Tajikistan's ambassador to Riyadh said that Dushanbe was considering the idea, and that President Emomali Rahmon would discuss the idea during his visit to Saudi Arabia in January. But the same day, that was denied by the country’s deputy foreign minister, Parviz Davlatzoda, who told the Russian news agency TASS, "We do not consider this at all."
Part of Tajikistan's reluctance is no doubt due to Moscow's hostile attitude toward the Saudi coalition. The Russian press has heaped scorn on the notion of the coalition; one journalist asked President Vladimir Putin about it, noting that "This will be an anti-Russian alliance, and it includes Turkey. This is very dangerous." Putin played the good cop, though:
Saudi Arabia on Tuesday announced the creation of a 34-country coalition of Muslim states aimed at fighting terrorism. Those 34 countries did not include the six Muslim-majority states of the former Soviet Union, though Azerbaijan said that it was considering joining in.
It's not yet clear what exactly the coalition will do: "It remains unclear what the Sunni kingdom is asking the other countries to do—whether it is a loose grouping to talk strategy and share intelligence or the first step to establishing a fighting force against the Sunni militant group," the Wall Street Journal reported.
The geopolitics of the new coalition suggest the emergence of a sort of new Cold War bloc arrangement in the region. The United States praised the creation of the new group. "In general it appears it is very much in line with something we've been urging for quite some time, which is greater involvement in the campaign to combat ISIL (Islamic State) by Sunni Arab countries," said U.S. Defense Secretary Ashton Carter.
Discussion of the draft comes right after a fatal police raid last week, when special troops were sent to “quell rebels” in the Baku suburb of Nardaran, home to a conservative Shi’a community. Two law-enforcement officers and four men tagged as alleged militants were killed. Police arrested a local spiritual leader, Taleh Bagirzade, and members of his Movement for Muslim Unity. They accused the group of plans to overthrow the government and establish a sharia state.
Given the government’s practice of running roughshod over critics, some question its motivations in the Nardaran raid. The town, EurasiaNet.org has reported, has generally been seen as “a different world” from the rest of Azerbaijan, with no national police allowed on its territory.
A fire that left most of Azerbaijan offline on November 16 appears to speak to the insecurity of the Internet supply in the South Caucasus, where nationwide Internet dim-outs are nothing new.
Early on Monday, a cable caught fire in a ganglion of lines belonging to Delta Telecom, Azerbaijan’s all-but-monopoly Internet supplier. The blaze eventually affected roughly 90 percent of the country’s networks, according to internet connectivity tracker Renesys.
Careful in its wording, the communications ministry termed the problem “a partial breakdown” in equipment, caused by a melting cable and smoke.
The incident lead to a roughly seven-hour-long Internet outage and brought down many locally hosted websites. As Azerbaijan’s main gateway to the Internet, Delta Telecom sells international traffic to nearly all internet service providers. The company also hosts on its servers several government websites.
Azerbaijani officials stressed that mission-critical operations — banking and the country’s bread-and-butter, oil-and-gas extraction – were not affected. The Internet connection was mostly restored late on the same day, but the outage left Internet users, both corporate and individual, in a huff.
“The government should take immediate measures to prevent such incidents from happening again and also to make the field more competitive and make alternative infrastructure available,” advised the Azerbaijan Internet Forum, a non-governmental coalition.