Activists jailed in Azerbaijan, the house that BP built

A protest against Azerbaijan’s crackdown on political dissent will be staged in London this Friday, 12 June, as the first European Games open in Baku.

At least 33 human rights defenders, youth movement activists, bloggers, journalists and others have been jailed in the last year in Azerbaijan – where the UK-based oil group BP is the largest foreign investor.

Campaign groups and media have been shut down, and dissidents forced to leave the country, just as economic problems have brought large numbers of Azeris out to protest.

There has been a “major escalation of government repression, pressure and intimidation, directed at NGOs, civil society activists, journalists and human rights defenders”, a resolution of the European Parliament said in September last year. It highlighted:

■ Some of Azerbaijan’s most prominent human rights defenders, including Leyla Yunus of the Institute of Peace and Democracy, and her husband the historian Arif Yunus, have been imprisoned on “apparently politically motivated charges”;

■ “Eight activists of the non-governmental youth movement NIDA were convicted on [trumped up] charges of hooliganism, drug possession and possession of explosives” after a wave of demonstrations in 2013;

■ The Oil Workers Rights Protection Organisation, the only independent group championing the labour rights of Azeri oil workers, has had its bank accounts frozen and faced other forms of harassment; and

■ Many more journalists, human rights defenders and activists are facing trumped-up legal charges, and “dozens” of others have been imprisoned on charges such as “hooliganism, drug possession, tax evasion and even treason”.

Despite international criticism, the regime has stepped up repression as next week’s games have drawn nearer. Rasul Jafarov, who organised the “Sing for Democracy” protest when the Eurovision song contest was held in Baku, and then took forward that campaign with “Art for Democracy” was sentenced to six and a half years in jail on 16 April, the same day that BP held its annual shareholders’ meeting in London.

On Friday demonstrators in London will go to the corporate headquarters of BP. It’s an excellent choice: there can not be many economies so completely dominated by one foreign company as Azerbaijan’s is by BP.

Oil and gas account for 95% of Azeri exports, 75% of the government’s income and 40% of the whole economy (as measured by Gross Domestic Product (GDP)) – and BP operate the largest oil project, the Azeri-Chirag-Guneshli (ACG) field; the largest gas project, the Shah Deniz field; has investments in oil and gas processing; and took the lead in building the Baku-Tbilisi-Ceyhan pipeline that pumps Azeri oil to the Mediterranean. In partnership with the Azeri national oil and gas company, Socar, BP is now building pipelines to bring gas to Europe. (BP’s own info here.)

The British government played a key part in opening Azerbaijan up for BP. In 1992, as BP battled with US oil companies to scoop up deals in the former Soviet Union, foreign office officials even flew former prime minister Margaret Thatcher to Baku to help seal the deal on ACG.

In the mid 2000s, when oil prices were high and the Baku elite was getting rich, BP often boasted of its role in the boom. But now that’s over. Social tensions and protest movements are very likely to grow this year, as the sharp fall in oil prices has shaken the economy and state finances.

The devalution by one third of the national currency, the manat, in March was a big shock.

More than 10,000 people turned out in Baku – many shouting “Stop the plunder! Thieves in power, go! Resign!” – when a moderate opposition coalition staged a legal protest against cuts in living standards and rising prices, Index on Censorship reported. Many shouted slogans about human rights and waved banners supporting the imprisoned dissidents.

There may be worse to come for ordinary Azeris. The effect of lower oil prices (which are wreaking havoc on many oil producing countries’ economies) is combined with the effects of the natural decline in oil production (the biggest and easiest-to-reach deposits have been used up, meaning that the fall in revenue will be permanent).

Oil production hit its peak in 2010, then fell by almost 15% in three years – from 50.8 million tonnes in 2010 to 43.4 million tonnes in 2013 – and is still falling. The country may soon have “serious problems” producing even 40 million tonnes per year, the Baku-based Centre for Economic and Social Development said in December, because the oil companies now have to drill deeper to find new deposits.

Azeri government officials have claimed that natural gas can make up for the decline in oil revenues. But they are exaggerating. There is a significant new gas project – the second phase of the Shah Deniz field, operated by BP – due to come on stream in 2019. But once you count up the huge infrastructure costs (in particular, for pipelines to take the gas to Turkey and south-eastern Europe), and the likelihood that low gas prices will persist right into the 2020s, the benefit to the Azeri elite looks minimal compared to what they made from the now-receding oil boom.

The International Monetary Fund warned in a report in 2013 that oil reserves “could be depleted in 15-20 years. Despite anticipated increases in gas production, gas revenues are unlikely to help offset the oil revenue decline due to price differentials and rapid changes in gas markets.”

The Fund’s economists told president Aliyev and his ministers that “oil dependence and fiscal vulnerabilities [that means, risks that you won’t have the cash to fund the state budget] are rapidly increasing”.

Then, in 2013, the government set the budget assuming they were getting $100/barrel for oil. For this year, 2015, they have assumed an average $90/barrel oil price – but the pundits expect it to be more like $60.

So in February, Azerbaijan’s Central Bank devalued the manat. “Stunned” savers queued for hours to withdraw their money from banks, and president Aliyev said in March that they were taking $500 million a day.

As well as the demo in Baku, protests were reported by a Eurasia.net correspondent in Lankaran, a Caspian coastal city. Budget cuts are “unavoidable”, he wrote. Ludicrous infrastructure projects – e.g. the Khazar Islands plan to build 41 artificial islands in the Caspian, and a big luxury building development in Baku – would probably be shelved.

He added that the government could “survive low oil prices for a year or two without serious risks to social stability” – because it has $37 billion in its rainy-day oil fund. But if low oil prices persist after that, living standards are “likely to fall sharply”. I think that’s a fair assessment – and many Azeris probably do too.

The sense that the party is over, and that the elite has eaten most of the cake, is surely widespread.
One gloomy thought is that the elite could stoke up its “frozen conflict” with Armenia – over the disputed territory of Nagorno Karabakh – to divert attention from its domestic problems. Twenty thousand people were killed in 1992-94, and about a million turned into refugees, after Armenia, with Russian support, occupied the mainly Armenian-speaking enclave.

In the 20 years since the “hot” war ended, fire has routinely been exchanged on the front line but casualties have been counted in dozens per year. In 2014, they went up to 60: “it’s not just snipers any more. It’s attack helicopters, artillery and more”, the Financial Times reported.

Russia has already provided a ruinous example of an oil-rich nation that has stoked up military conflict with a neighbour at least in part to divert people’s attention from economic crisis at home. Let’s hope Azerbaijan does not follow suit.

■ London demo on Friday 12 June. Details on the Platform London site here.

■ The Caspian region’s longest-running oil workers’ strike, a seven-month stoppage in 2011 in Kazakhstan, ended with a police massacre of workers and jailings of activists. There has been a campaign for justice. All highlighted on here.

First published on People & Nature