An International Monetary Fund team is currently on a “fact-finding” mission at the Azerbaijan government’s request, The Financial Times reports.
According to the report, investigative journalists from the Organised Crime and Corruption Reporting Project (OCCRP) and elsewhere have for years observed the ruling clan and its acolytes dominate through opaque business practices and autocratic abuses.
Reportedly, a WikiLeaks cable sent from global intelligence company Stratfor via SIPRNet, the classified US Department of Defence computer network, commented that Azerbaijan is run like a medieval feudal system shared by several clans.
According to the article, a low oil price threatens this cosy arrangement and has sparked popular protests. This is no small development given the government’s own hostility towards an oppressed society. OCCRP journalist Khadija Ismayilova has just begun a seven-year jail sentence after regularly exposing the corruption at the heart of the Aliyev regime — joining nearly 100 other journalists and activists behind bars.
“Western taxpayers should be appalled that they are being asked to fix the problems of the feudal elite. OCCRP has revealed the regime’s corruption in exhaustive detail,” the authors of the article point out.
Meanwhile, according to the article, corporate ownership information has been confidential in Azerbaijan since 2012. This means there is no simple way to check who benefits from any transactions with the government. These moves are designed to prevent any public scrutiny or government accountability. A bailout without stringent reform will be caught in the same web of systematic corruption. IMF and the World Bank must avoid siphoning yet more money, this time from western taxpayers, into the coffers of a wealthy autocracy.
The website of the American TV channel CNBC writes that more countries are expected to join oil-rich but cash-poor Azerbaijan and Nigeria in asking for international financial help if the price per barrel continues to show no sign of recovering. “After Azerbaijan and Nigeria requested international financial aid in January as oil prices wallowed around, and even dipped below, the $30 a barrel mark, all eyes are on other struggling oil-producing nations to see who might be next to go cap in hand to such organisations as The World Bank or International Monetary Fund,” CNBC reports.
According to the Economy Watch , Azerbaijan faces greater hardship than other commodity-driven nations because of the social and political unrest unravelling as the economy falters. Police throughout the Caspian country have been dispersing unruly protesters who are angry over skyrocketing unemployment and price hikes.
S&P expects inflation to rise to 15% in 2016, which is well above the traditional two percent seen in previous years. Officials first responded to the crisis by announcing an austerity program that would last for three years, but only time will tell if such policies will work. President Ilham Aliyev announced a 30% increase in public salaries and pensions, a dangerous promise to make at a time of low funds and public outrage. Policymakers risk stoking further unrest if they fail to deliver on their promises, which seem more likely given the current state of the economy, Economy Watch points out.
The website of The Jamestown Foundation, a US non-governmental think tank, writes that the Azerbaijani public felt the negative impact of the devaluation of the country’ national currency. Panic and frustration led to protests by local populations across several regions countrywide against the increase of prices of essential goods and unemployment. Although the protests are not politically motivated in the narrower sense, and they developed sporadically, the Azerbaijani Prosecutor General’s Office and as well as the Ministry of Interior issued a joint statement accusing the opposition parties and radical and religious extremist groups of organising the protests.
“The population’s concerns have only increased due to the multiple and often contradictory statements by government officials, as well as the obvious breaches of promises. Essentially, the absence of a clear anti-crisis plan and agenda for economic liberalisation has fuelled public concern that the government is not acknowledging the reality of the crisis,” the foundation writes.