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Gubad Ibadoghlu. The Mechanisms and tools of Authoritarian Control in Resource-Rich States:A Case Study of Azerbaijan.



 

Dr. Gubad Ibadoghlu, Visiting Senior Fellow at London School of Economics and Political Science (LSE), before becoming current academic position at LSE, he was an affiliated postdoc fellow in the Rutgers' Centre for European Studies. E-mail: g.ibadoghlu@lse.ac.uk


Abstract

This article examines the dynamics of authoritarian rule through the example of Azerbaijan, aiming to uncover patterns typical of resource-rich autocracies. In countries where state budgets heavily rely on revenues from oil, natural gas, and other mineral resources, specific mechanisms emerge that consolidate power. Azerbaijan serves as a case study, illustrating how these mechanisms operate in practice, exposing the intricate interactions between state control over the economy, restrictions on civil liberties, and the state's role as a primary employer.


The analysis delves into how these factors strengthen authoritarian regimes, addressing the roles of corruption, electoral manipulation, and international diplomacy in preserving governmental stability and legitimacy. By exploring these interconnected dynamics, the article sheds light on broader strategies used by authoritarian governments to maintain dominance and suppress dissent.


The article also provides a forward-looking perspective, projecting how a potential decline in oil revenues over the next decade might impact Azerbaijan’s economic landscape and political stability.

 

Keywords: Azerbaijan, resource-rich states, rentier state, oil-gas revenues, authoritarian governance, corruption, election, judiciary, court, state-owned companies, budget, finance, monopoly, freedom of speech and press, international diplomacy

 

Аннотация


В данной статье рассматривается динамика авторитарного правления на примере Азербайджана, чтобы выявить общие закономерности, характерные для богатых ресурсами автократий. В странах, где доходы от добычи и экспорта нефти, природного газа и других минеральных ресурсов составляют основную часть государственного бюджета, складываются специфические механизмы консолидации власти. Пример Азербайджана демонстрирует, как эти механизмы проявляются на практике, раскрывая сложное взаимодействие между государственным контролем над экономикой, подавлением гражданских свобод и зависимостью занятости в государственном секторе.


Анализ углубляется в изучение того, как данные факторы способствуют укреплению авторитарного режима, а также в рассмотрение роли коррупции, манипуляций на выборах и международных отношений в поддержании стабильности и легитимности власти. В ходе исследования этих взаимосвязанных факторов статья выявляет более широкие стратегии, применяемые авторитарными режимами для сохранения своего доминирования и подавления инакомыслия.


Кроме того, статья представляет авторское видение ближайшего будущего: прогнозируется, как предполагаемое сокращение нефтяных доходов в течение следующего десятилетия может повлиять на экономику и политическую устойчивость Азербайджана.


Ключевые слова: Азербайджан, богатые ресурсами государства, государство-рантье, нефтегазовые доходы, авторитарное управление, коррупция, выборы, судебная власть, суд, государственная собственность. компании, бюджет, финансы, монополия, свобода слова и печати, международная дипломатия

 

Introduction

 

Azerbaijan's substantial oil and natural gas reserves play a central role in the nation's economy and governance. According to the BP Statistical Review of World Energy (BP, 2021:18), the country's oil reserves stood at 7 billion barrels by the end of 2020, representing 0.4% of global reserves. Oil production occurs both onshore and offshore in the Caspian Sea, with offshore operations accounting for approximately one-quarter of the total output.


The importance of the oil and gas sector to Azerbaijan’s economy is undeniable; over the past 15 years, these resources have consistently comprised at least 90% of the country's exports. In 2023, the sector accounted for 33.82% of the nation's GDP and 30.87% of total investments in fixed capital. Moreover, oil and gas revenues contributed 51.52% of the state budget's revenues. (Ibadoghlu, 2024A) This heavy reliance on resource wealth has fueled economic growth, attracted foreign investment, and maintained fiscal stability. However, it has also reinforced authoritarian governance.


Azerbaijan's energy resources are primarily destined via Georgia and Turkey to European markets. According to Eurostat, Azerbaijan exported energy resources worth over 18.8 billion euros to the European Union (EU) markets in 2023. Two thirds (65%) of this amount, 12.6 billion dollars, was derived from selling crude oil and oil products in European markets. A third (35%) of Azerbaijan's income from the EU is composed of natural gas. In the previous year, Azerbaijan's revenues from gas supplies to the EU amounted to 6.2 billion euros, 2.5 times less than in 2022. (Eurostat, 2024).


Azerbaijan exemplifies a "rentier state" where authoritarian governance is reinforced by revenues from natural resources. Such states typically exhibit characteristics including pervasive corruption, election fraud, extensive state intervention in the economy, and suppression of civil liberties. The regime also dismantles independent media, curtails judicial independence, and experiences significant brain drain, while seeking foreign support to legitimize and consolidate its power.


Resource-rich post-Soviet states often share strategies for undermining democratic institutions, exchanging expertise on authoritarian practices. For Azerbaijan, these tactics have become core mechanisms for entrenching authoritarian rule.


1.     Corruption as a Tool of Governance 

 

Transparency International's 2023 Corruption Perceptions Index placed the country 154th out of 180, suggesting a high prevalence of corruption (Transparency International, 2023). Additionally, the World Bank’s Worldwide Governance Indicators ranked Azerbaijan 152nd globally in the "Control of Corruption" category for 2022 (World Bank Group, 2023). These rankings highlight a lack of meaningful anti-corruption measures, which is characteristic of authoritarian regimes where corruption is often systemic and deeply ingrained.


Authoritarian governments, such as Azerbaijan's, typically avoid combating corruption due to their vested interest in preserving a system that enriches the ruling elite. In highly corrupt states, the head of state is often acutely aware of the extent of corruption, as they oversee centralized systems that manage the collection and distribution of illicit funds, which ultimately benefit the ruling family. This centralization ensures that corruption is not merely tolerated but is an integral part of governance.


A key strategy employed by authoritarian leaders to maintain control involves keeping the salaries of civil servants, teachers, and healthcare workers below the national average. As a result, these professionals often resort to accepting bribes as a means of supplementing their inadequate income. In 2023, the State Statistical Committee reported that the average monthly nominal wage in Azerbaijan was ₼933.9 (approximately $550). However, the average wages of doctors and nurses at ₼804.4 ($473), and teachers earning ₼712.6 ($419)—both below the national average.  The median salary remained at ₼410 ($241) in 2022 (State Statistical Committee of Azerbaijan, 2024A:66).


The systemic underpayment of essential workers leads to a dependency on bribery, gradually co-opting them into the authoritarian structure. Fear of reprisal, including arrest and torture, further discourages these individuals from engaging in reformist activities. Consequently, their economic vulnerability and fear-driven loyalty make them valuable assets to the regime, particularly during electoral manipulation and other illegal activities aimed at consolidating power.


Authoritarian leaders often equate financial wealth with political longevity, believing that sufficient capital can resolve any political or social challenge and thus prolong their rule indefinitely. As the ruling elite accumulates more wealth, their sense of invulnerability intensifies, further distancing them from the general population. This detachment fosters an environment where dissent is managed primarily through financial means, such as bribery or suppression, rather than through legitimate governance or dialogue.


In highly corrupt systems, authoritarian leaders exercise strict control over corrupt networks, overseeing the centralized collection and distribution of bribes. These networks are not merely tolerated but are actively managed to ensure that wealth generated through corrupt practices is channeled back into sustaining the regime's power and influence. Such control underscores the leaders' complicity in maintaining and benefiting from corruption, while also perpetuating a cycle of dependency among those involved.


The regime's strategy of underpaying key sectors and promoting a culture of corruption ensures the entrenchment of authoritarian rule. Those who rationalize accepting bribes due to low wages—particularly teachers and healthcare workers—find themselves economically and politically bound to the regime. This reliance, coupled with the fear of harsh reprisals, prevents significant portions of society from participating in reform movements. Thus, corruption not only enriches the elite but also acts as a mechanism for maintaining political control.


In conclusion, leaders of authoritarian regimes operate on the belief that accumulating wealth directly correlates with the longevity of their rule. They maintain a steadfast confidence that financial resources can resolve any political or social issue, and this conviction only grows stronger as their capital increases. As a result, corruption becomes more pervasive, compelling individuals, particularly those in underpaid professions like teaching and healthcare, to support the regime. These officials, who rationalize accepting bribes as compensation for their inadequate wages, find themselves economically bound to the system. Their dependency, coupled with the fear of arrest and torture, discourages them from aligning with reformist movements or opposing the regime.

Systemic corruption in Azerbaijan, therefore, serves not only as a symptom but also as an instrument of authoritarian governance. The regime's intentional neglect of anti-corruption efforts, along with the deliberate underpayment of public sector workers, perpetuates corrupt practices and embeds them within the fabric of the state. This strategy enables the ruling elite to manipulate the flow of wealth, maintain loyalty among key groups, and suppress dissent. By exploiting corruption in this manner, the regime fortifies its grip on power, ensuring the continued entrenchment of its authoritarian rule.


2.     The Manipulation of Electoral Processes 


Groups prone to accepting bribes—such as teachers, doctors, and government officials—are frequently mobilized by the government to manipulate election outcomes. These individuals often engage in illegal activities to demonstrate their loyalty and usefulness, ensuring they fulfill the regime's expectations. For those serving as chairpersons and members of constituency and precinct election commissions, a primary objective is to secure career advancement by falsifying election results in favor of the ruling party and its candidates. Positions within state institutions are perceived as lucrative opportunities, further motivating them to engage in electoral fraud.


This pattern has been evident in every election in Azerbaijan, including even local municipal elections at the village level, where electoral malpractice remains pervasive. Regardless of the election scale, widespread fraud erodes public trust in the electoral system, leading to a steady decline in voter turnout. This decreased participation further facilitates manipulation, as a lower number of voters creates more opportunities for electoral fraud to go undetected, thereby perpetuating a cycle of corruption and undermining democratic processes.


To suppress voter turnout, authoritarian regimes often call snap elections with little advance notice. In Azerbaijan, snap elections are typically scheduled during extreme weather months, either hot or cold, to further discourage participation. The last two presidential and parliamentary elections were held as snap elections: the presidential elections took place in April 2017 and early February 2024, while the parliamentary elections occurred in February 2020 and September 2024.


Officially, the Central Election Commission reported a 37.24 percent voter turnout for the snap parliamentary election on September 1, 2024 (Central Election Commission, 2024). However, independent observers estimated that actual participation was closer to 10 percent. Numerous video recordings surfaced during the election, revealing instances of ballot-stuffing and "carousel voting," where the same individuals were transported between polling stations to cast multiple votes (OSCE/ODIHR & OSCE PA, 2024).


Moreover, in many cases, individuals who did not actually participate in the election were recorded as having "voted" in favor of the ruling party's candidate. This manipulation was often carried out by election commission members, who filled in ballots on behalf of non-participating voters to ensure a favorable outcome for the regime. Such practices contribute to the erosion of electoral integrity and further diminish public confidence in the democratic process.


3.     State-Owned Enterprises and Political Control


Authoritarian regimes are not interested in the commercialization, shareholding, or privatization of state-owned companies. They are especially interested in keeping state-owned companies in monopolies and thus in their personal control. In authoritarian regimes, state-owned companies receive large subsidies from the budget furthermore, they finance quasi-fiscal activities in the interests of the authoritarian regime, social and popular programs, maintain sports teams, create television channels, and allocate funds to media portals. They usually get more from the budget than they pay to the budget.


In 2020, over 40 large state-owned companies and enterprises, as well as economic societies with state ownership, were transferred as a portfolio companies  to the management of Azerbaijan Investment Holding (Azerbaijan Investment Holding, 2024). However, none of these entities have yet been privatized. Moreover, there have been no significant efforts to implement progressive corporate governance principles or to enhance management practices within these organizations. In authoritarian regimes, state-owned companies are not only utilized for economic purposes but also serve social and political objectives. The state's ownership of these enterprises provides various opportunities for authoritarian governments to pursue political goals.


Firstly, the leaders of these companies are appointed and dismissed at will by the head of the authoritarian regime, ensuring their dependence on the government. Secondly, the lack of accountability and transparency in these companies facilitates corruption through covert operations and questionable activities. Thirdly, employees of these companies, along with their families, are closely monitored by special services. This control extends throughout state institutions, from universities to energy and natural resources, state-owned production, logistics, public sector service delivery and financial enterprises, where the introduction of state security appoints a second-in-command. For instance, in state universities, one of the vice-rectors is appointed by the introduction of the state security service, with the primary responsibility of overseeing not only the speeches and discussions of faculty and students but also their activities outside the university, such as social media posts and comments.


Finally, in authoritarian regimes, employees of state-owned enterprises are often coerced into joining the ruling party and are required to participate in events that serve the regime's interests, including political, cultural, artistic, and sports activities. Such mass events are frequently organized with the participation of these employees, further reinforcing the regime's control.


4.     Fiscal Governance and Budgetary Control

 

According to the Ministry of Finance, more than half of Azerbaijan's direct budget revenues for 2022 (Ministry of Finance of Azerbaijan, 2023) and 2023 (Ministry of Finance of Azerbaijan, 2024) originated from the oil and gas sector. In addition, personal income tax represented just 4.7 percent of the budget, while corporate income tax contributed 22.7 percent. These statistics illustrate Azerbaijan's characteristics as a rentier state, where the economy relies heavily on income from natural resources rather than diversified revenue sources. Such reliance has profound political implications, influencing public participation in the budget process, as well as the transparency and accountability of fiscal governance.


In authoritarian regimes that depend primarily on oil revenues instead of direct contributions from taxpayers, resource income and state budgets are often treated as assets controlled by the ruling authorities. This structure diminishes the government's accountability to citizens when it comes to budget allocation and implementation. Instead of open, competitive tenders, procurement processes frequently involve awarding contracts through non-transparent methods, such as single-source procurement.


The Chamber of Accounts' Annual Report on the Execution of the State Budget for 2023 highlights this issue (Accounting Chamber of the Republic of Azerbaijan (2024:128). Of the ₼7,545.5 million (approximately $4,438.5 million) in public procurement expenditures, only ₼3,657.7 million ($2,151.6 million), or 48.4 percent, was allocated through open tenders. In contrast, ₼2,855.6 million ($1,679.7 million), or 37.8 percent, was distributed via single-source procurement, ₼972.6 million ($572.1 million), or 12.8 percent, through requests for proposals, and ₼59.6 million ($35.1 million), or 0.8 percent, via requests for quotations.


These figures indicate that merely half of the budgeted funds were allocated through open tender processes, which does not necessarily imply competitive or transparent practices. The prevalence of non-competitive procurement mechanisms further diminishes transparency and raises concerns about the fair distribution of public resources.


In conclusion, the budget's heavy reliance on indirect taxes and transfers from the Oil Fund, coupled with the low proportion of direct tax contributions, significantly affects governance in Azerbaijan. This fiscal structure shifts the government's financial dependence away from direct taxpayers toward consumers and the Oil Fund, thereby weakening the accountability of the regime to its citizens. When combined with procurement practices that bypass open tenders, this environment fosters conditions conducive to corruption and misuse of public funds.


5.     Public Sector Employment as a Tool for Control


As of September 1, 2024, the number of employees in Azerbaijan's economy totaled 1,754.9 thousand, according to the State Statistical Committee (State Statistical Committee of Azerbaijan, 2024B). Of this total, 878.3 thousand (50.05%) were employed in the public sector, while 876.6 thousand (49.95%) were in the private sector. In regional areas, public sector employment is even more dominant, with two out of every three employees working for the government.


The high level of state involvement in employment serves not only economic but also political purposes, especially in authoritarian regimes where unemployment is prevalent. In such systems, extensive public sector employment allows the government to exercise greater control over individuals. Public sector workers are often subjected to continuous political engagement, including participation in state propaganda and advocacy activities supporting the regime. Furthermore, government employees, along with their family members and relatives, are closely monitored by special services operating within their institutions. Surveillance extends to their activities on social media, where their posts and affiliations with various groups and individuals are scrutinized.


These measures are implemented at both central and local executive levels, functioning as a systemic approach to deter anti-government activities among public sector employees and their families. The extent of surveillance and control is more stringent at the local executive level, and this can be attributed to three key factors:

  1. Limited Access to Employment and Alternatives: Employment opportunities in regional areas are scarce, making public sector jobs a primary source of income.

  2. High Proportion of Public Sector Jobs: In the regions, two out of every three available jobs are within the public sector, which amplifies the state's influence over the workforce.

  3. Smaller Populations and Geographical Areas: The smaller size of regional areas and fewer number of employees make it easier for authorities to observe and monitor individuals at the local level.


Consequently, the combination of limited employment alternatives, high public sector dominance, and localized surveillance enables the government to maintain a high degree of control over regional populations, reinforcing the authoritarian system and restricting dissent.


6.     Monopolization on Private Sector and Financial Control


In authoritarian regimes, the suppression of economic freedoms and business initiatives serves dual purposes: to exert control over financial flows and revenues in the private sector and to reduce the proportion of private sector employment. By restricting private sector growth and steering job seekers toward the public sector, authoritarian governments can exercise greater control over individuals through mechanisms such as special services. This approach helps prevent the rise of economically independent individuals who could potentially challenge the regime’s power, as property rights are often linked to personal freedoms. The government also fears that wealth generated from entrepreneurial activities could be used to support political opposition. To counter this, authoritarian regimes seize lucrative sectors within the private economy and create barriers to entry for outsiders, thereby maintaining monopolies controlled by the state or affiliated entities.


A key strategy for maintaining authoritarian rule is the monopolization of economic sectors and control over financial resources. In these regimes, economic power is concentrated in the hands of monopolistic companies owned or controlled by the ruling family and their associates. This includes strict regulation of financial institutions, particularly the banking sector, which is closed off to foreign investors and independent operators. The financial monitoring services in these countries wield extensive powers, often confiscating funds deemed to be outside the official system under the guise of combating smuggling, terrorist financing, and money laundering. Such practices exemplify the extent of financial control exercised by these governments (The Financial Monitoring Service of the Republic of Azerbaijan, 2024).


Azerbaijani banks are mainly controlled by the ruling family and state officials in the form of Pasha Holding. Even so, under the political control of Pasha Holding, the Central Bank is interested in continuing the policy that will lead to a monopoly in the banking sector in Azerbaijan. This allows us to predict that in the near future, new banks will not be created, foreign banks will not be admitted to the financial market, and existing small and medium-sized banks will be closed. With this move, after a few years, the HHI index of the Azerbaijani banking market will complete the transition from a moderate to a high concentration level (Ibadoghlu & Bayramov, 2023).


Moreover, regulatory frameworks, such as the "Regulation on Currency Exchange Transactions and Control of Currency Exchange Activities by Licensed Persons," issued by the Central Bank of Azerbaijan, play a significant role in controlling currency exchange activities (Central Bank of Azerbaijan, 2024). For instance, the regulation mandates enhanced customer due diligence for individuals conducting transactions of   ₼ 20000 ($11764) or more in a calendar year. This regulation is part of a broader strategy to monitor and control the movement of money, reinforcing the regime’s financial monopoly.


In authoritarian systems, internal financial flows, as well as cross-border money transfers, are tightly monitored and politically controlled through the banking sector. Funds that are not integrated into the official financial system are subject to confiscation by the financial monitoring authorities. Additionally, strict regulations are imposed on the movement of foreign currency in and out of the country. Since March 2020, in Azerbaijan, land borders have remained closed to limit foreign currency transactions and prevent individuals from bringing in or taking out foreign currency via road or rail (Cabinet of Ministers of the Republic of Azerbaijan, 2024). As a result, airports have become the only points of entry and exit, where foreign exchange activities are closely monitored through surveillance measures.


In conclusion, authoritarian regimes consolidate economic control by monopolizing key industries, regulating financial flows, and implementing extensive surveillance and monitoring of currency transactions. This concentration of economic power ensures that the regime retains its grip over the economy, while also minimizing the risk of financial resources being used to support opposition activities. The resulting financial environment is one of restricted competition and pervasive state control, designed to sustain the regime’s dominance.


7.     Suppression of Freedom of Speech and Press

 

Azerbaijan consistently ranks among the world’s most repressive regimes in terms of political freedom and press freedom. According to Freedom House's Freedom in the World index, Azerbaijan scored just 9 out of 100 points in 2023, indicating a “not free” status (Freedom House, 2024). Although this score is slightly higher than the previous year's, it does not reflect any significant improvement in the country’s freedom status. Similarly, Reporters Without Borders places Azerbaijan at 164th out of more than 180 countries on the Press Freedom Index, reflecting severe restrictions on media freedom (Reporters Without Borders, 2024). As COP29 approaches, the situation remains dire, with the country detaining 319 political prisoners (Turan IA, 2024), underscoring ongoing human rights abuses.


Authoritarian regimes, in their relentless efforts to suppress dissent, often underestimate the resilience and determination of those they seek to silence. Despite systematic attempts to isolate journalists, social activists, political leaders, and critics from society, these individuals continue to find ways to express their concerns. The regimes' strategies to keep dissent leaderless, fragmented, and disorganized are consistently challenged by the resolve of these individuals to mobilize and resist.


Globally, authoritarian regimes extend their influence through the enactment of repressive laws targeting media, non-governmental organizations (NGOs), and political parties. These legal measures, often inspired by or directly influenced by the Kremlin, are designed to suppress independent voices, non-systemic opposition, and the free press. The exchange and implementation of such repressive tactics among authoritarian governments, with the Kremlin often playing a central role, represent a significant threat to civil society institutions worldwide.


In their pursuit of total control, authoritarian regimes seek not only to dominate media and political opposition but also to manipulate these spheres to secure illicit gains. This control extends beyond maintaining political power, encompassing efforts to misappropriate state resources, conceal wealth obtained through corruption, and prevent public awareness of such activities. Media control begins with censorship, evolves into bribery, and extends to regulating internet broadcasting through the licensing of audio and video channels. The ultimate aim is to curtail the flow of information that exposes the regimes' corrupt practices, thereby shielding them from public outrage.


A case in point is Azerbaijan's Law on Media adopted in December 2021 without public debate or consultation with international experts (Law on Media, 2021). This law subjects all forms of information exchange, excluding personal correspondence, to state regulation, imposes licensing requirements on internet-based platforms, and places journalists under the authority of a state body with executive powers. These measures significantly undermine press freedom. In a context where independent civil society is dismantled, political opposition is marginalized, and civic activism is weak, the executive-dominated parliament swiftly and unanimously passes such laws.


Similarly, Azerbaijan’s Law on Political Parties (Law on Political Parties, 2023), which took effect in January 2023, introduced more stringent requirements for state registration, created legal grounds for the subordination of political parties to the central executive authority, and prohibited the operation of unregistered parties. Meanwhile, amendments to the Azerbaijan’s Law on NGOs (Law on NGOs, 2000)  in 2009 effectively crippled the activities of independent organizations, particularly by banning the use of foreign grants.


The confluence of these legal measures demonstrates a deliberate and coordinated strategy to undermine democratic principles, weaken civil society, and entrench authoritarian rule. The international community must recognize the dangers posed by these tactics and respond accordingly to safeguard the values of free expression, political pluralism, and civil liberties.


8.     The Judiciary as an Instrument of the Regime

 

The power of authoritarian regimes is rooted in the concentration of authority, where the separation of powers is deliberately eroded to ensure that legislative and judicial branches are controlled by the executive. This consolidation of power begins with the appointment process, as deputies and judges are selected through sham elections designed to create the appearance of democratic legitimacy while ensuring loyalty to the regime. In this system, pseudo-courts play a crucial role, serving not as independent arbiters of justice, but as instruments of authoritarian control.


There are two primary objectives behind maintaining a judiciary that is subservient to the executive in authoritarian regimes. First, the judiciary provides a legal shield for the regime, preventing court decisions from addressing corruption, embezzlement, or other illicit activities. This legal protection ensures that the ruling elite can act with impunity. Second, the judiciary is weaponized to suppress political dissent. Courts are used to target opposition figures, activists, and critics, removing them from the public sphere through politically motivated prosecutions and imprisonment. This transformation of the judiciary into a tool for repression eliminates any notion of justice and serves the regime's broader aim of stifling dissent.


In such regimes, the judiciary also acts to protect the business interests of the ruling elite, often at the cost of justice and equity. Economic rivals and political adversaries are frequently targeted through legal measures such as tax penalties and sanctions, ensuring that threats to the regime's financial interests are swiftly neutralized. Judicial appointments are heavily biased, with candidates required to pass examinations that favor loyalty to the regime, effectively excluding anyone associated with the opposition or with independent views. Consequently, the judiciary is composed of individuals who prioritize regime interests and rarely, if ever, challenge government bodies, regardless of whether cases are political or non-political.


The judiciary's subservience was particularly evident during events such as the 2020 early parliamentary elections, where local courts consistently upheld the decisions of the Central Election Commission without questioning or overturning a single ruling. This pattern of deference demonstrates how the judiciary serves as a legitimizing force for the regime rather than as an independent check on power.


Corruption is pervasive within the judiciary, where legal outcomes can often be influenced through bribery. The corruption extends to the execution of court judgments, where enforcement processes are compromised by corrupt practices in executive offices. As a result, violations of the right to a fair trial are widespread, leading to a significant number of cases being referred to the European Court of Human Rights (ECtHR). This systemic lack of judicial independence poses a serious threat to the rule of law and undermines public trust in the legal system.


9.     International Diplomacy and Authoritarian Legitimacy 


Authoritarian governments frequently host prestigious international sporting and cultural events to project an image of modernity and integration with the global community. By organizing events like Formula 1 races or sponsoring major art competitions, they aim to present themselves as tolerant and progressive on religious, cultural, and national issues (Ibadoghlu, 2024B). These regimes also engage directly with Western politicians, using various diplomatic strategies to secure political support and legitimize their rule on the international stage.


In Azerbaijan, the government employs a range of strategies to cultivate international support and sympathy from diverse communities. It appeals to the global sports community by hosting annual Formula 1 races and seeks recognition from United Nations institutions and environmental organizations by hosting significant events such as COP29. The government also seeks favor with the Catholic community through church restoration projects in the Vatican and with the Jewish community by capitalizing on historical ties.


Azerbaijan engages in "caviar diplomacy" (European Stability Initiative, 2012) and "pipeline diplomacy" (Politico.eu, 2024) as part of its efforts to influence Western politicians, using gifts, incentives, and energy partnerships to gain political leverage. Additionally, it bolsters its connections with the British royal family by conducting business with entities like the United Kingdom's real estate sector. The regime further strengthens its international alliances by collaborating with multinational corporations, offering lucrative oil and gas contracts, and investing in foreign economies—often using capital obtained through opaque or questionable means.


These multifaceted strategies collectively enable the Azerbaijani government to secure international legitimacy, extend its influence, and consolidate its authoritarian rule.


Authoritarian regimes also employ diplomatic channels to secure foreign support, cultivating relationships with diplomats from influential countries who serve as ambassadors. These diplomats, after completing their tenures, often continue to advocate for the country. For instance, former U.S. ambassador to Azerbaijan Matthew Bryza (2011–2012) and former U.K. ambassador James Sharp (2019–2022) have continued to promote Azerbaijan's interests following their diplomatic service. Such advocacy plays a significant role in shaping global perceptions and bolstering the international standing of authoritarian governments.


Azerbaijan's ambassadors in Western nations further contribute to this effort by building networks with influential, and sometimes corrupt, politicians. They establish contacts with political figures in organizations such as the Parliamentary Assembly of the Council of Europe (PACE), the Organization for Security and Co-operation in Europe Parliamentary Assembly (OSCE PA), and the European Parliament, often inviting them to visit Azerbaijan or serve as international observers during elections. These activities help to expand the regime's network and exert influence on the international stage.


It is important to acknowledge the role of the international community in enabling authoritarian and corrupt regimes to avoid scrutiny despite their repeated violations of human rights. When international actors overlook these regimes' abuses or actively support them, they become complicit in perpetuating authoritarian practices and undermining the principles of democracy.


10.  The Consequences of Brain Drain


Authoritarian regimes often encourage the emigration of two particular groups: young people and highly qualified professionals. The first group, young people, frequently seek to study abroad due to the poor quality of the domestic education system. The government appears to tacitly support this trend, as evidenced by the lack of measures to retain students educated overseas. For instance, under the state program for education abroad (2007-2015), more than 3,500 young people received funding to study in foreign countries without any formal requirement to return upon completing their education (SOFAZ, 2020). This policy suggests a calculated expectation that many would choose not to come back.


The second group consists of qualified professionals, whom the government effectively pushes to emigrate by maintaining low salaries and poor working conditions. The regime perceives highly educated and experienced individuals as a potential threat due to their independence and capacity for critical thought. By keeping wages low, the government indirectly incentivizes these skilled workers to leave the country in search of better opportunities abroad. In many cases, this strategy succeeds, as educated and qualified personnel, particularly those who value professional autonomy, find more favorable prospects outside the country.


Thus, in authoritarian regimes, the emigration of young people and skilled professionals serves to reduce potential sources of domestic dissent and minimize the risk posed by an independent, educated populace.


Conclusion: The Perpetuation of Authoritarian Rule 


The governance strategy of the Azerbaijani regime, orchestrated by the ruling elite, is a stark demonstration of how authoritarian rulers manipulate resources, institutional corruption, electoral processes, and international diplomacy to perpetuate their power. Corruption serves as a tool for the enrichment of the ruling elite and a strategic mechanism for co-opting key sectors and neutralizing dissent. The manipulation of electoral processes further erodes democratic principles, while diplomatic engagement is utilized to legitimize the regime on the global stage. These interconnected practices unveil a broader pattern in which authoritarian leaders equate wealth accumulation with political longevity, believing that financial resources can shield them from challenges to their rule. This mindset perpetuates a cycle of corruption that cements the regime's power, making substantial reforms improbable and authoritarian practices deeply entrenched.


The international community's tolerance or tacit support for such regimes exacerbates the problem, allowing authoritarianism to persist with minimal challenge. However, the power to counter these trends lies within the international community. By holding authoritarian regimes accountable, advocating for substantive anti-corruption measures, and actively supporting the development of democratic institutions, international actors can effectively undermine the hold of autocratic governments and promote stability, democracy, and human rights. Failure to do so risks perpetuating cycles of corruption and repression, with significant implications for regional and global stability.


The persistence of authoritarian regimes is marked by systematic erosion of judicial independence, the rule of law, and fundamental civil liberties, such as freedom of speech and press. Widespread human rights abuses, including politically motivated arrests and torture, contribute to long-term instability, often leading to unrest, anarchy, or turbulent transitions to democracy—sometimes through revolutionary upheaval. However, there is hope for change. It is increasingly necessary for the political elites within these regimes to demonstrate a genuine commitment to reform. This includes upholding the rule of law, protecting human rights, and fostering an environment conducive to democratic governance. Only through such measures can the severe consequences of systemic repression and corruption be mitigated, paving the way for a more stable and just society.

 

Prospects for Transition amid Declining Revenues

 

Azerbaijan relies heavily on traditional oil and gas production, exporting these resources primarily westward to markets in Georgia, Turkey, the Balkan states, and European Union member countries via pipeline infrastructure. Despite steady growth in natural gas output, with a significant increase of 19.7 billion cubic meters from 2010 to 2023, fossil fuel export revenues have declined annually due to price volatility and external economic pressures (Ibadoghlu, 2024C).


In 2023, Azerbaijan produced 48.3 billion cubic meters of natural gas, yet its crude oil output dropped significantly, falling by 20.6 million tons—from 50.8 to 32.2 million tons—compared to 2010. Compared to 2010, commodity oil production in Azerbaijan decreased by over 20.6 million tons, or more than 1.5 times, to 32.2 million tons, directly linked to the reduction in oil production in projects implemented with foreign companies. While the country's oil production was 44.6 million tons in 2013, this figure dropped to 32.2 million tons in 2023, marking the lowest recorded figure in the reporting period. This decline indicates challenges impacting production levels and revenue potential (Ibadoghlu, 2024D).


Projections by S&P Global indicate that Azerbaijan's commodity gas production may peak around 2031 (S&P Global Commodity Insights, 2023). However, the country faces substantial obstacles in exploitation and transporting its nagas to the European market including limitations in transportation infrastructure capacity (Ibadoghlu, 2023), elevated transit tariffs, and political pressures, such as calls from members of the European Parliament to reduce the EU's reliance on Azerbaijani gas (European Parliament, 2024). Additionally, the anticipated increase in U.S. oil production, should former President Trump return to office, may drive global oil prices further downward, compounding revenue declines for Azerbaijan (Ibadoghlu, 2024E).


A 2021 report from Carbon Tracker titled Beyond Petrostates: The Burning Need to Cut Oil Dependence in the Energy Transition categorizes Azerbaijan among the most vulnerable oil-dependent states. The report places Azerbaijan in "Tier 5," identifying it as one of the seven nations expected to experience over a 40% shortfall in government revenue from oil and gas over the next decade. This places Azerbaijan alongside Angola, Bahrain, Timor-Leste, Equatorial Guinea, Oman, and South Sudan. The report notes that 40 oil-dependent states globally may face a severe 46% drop in revenue due to climate policy shifts and technological advancements in alternative energy, with potential losses amounting to $9 trillion. Over 400 million people live in the 19 countries most at risk, where such revenue declines could lead to significant public service cutbacks and widespread job losses, including in Azerbaijan, where projected revenue shortfalls could reach as high as 68% (Coffin & Grant,2021).


World Bank simulations from the Long-Term Growth Model (LTGM) project an economic stagnation for Azerbaijan, predicting only 0.5% average GDP growth from 2024 to 2050 if current economic policies remain unchanged. Per capita GDP is estimated to increase by only 11% over the next three decades. The 2022 World Bank Azerbaijan Country Economic Memorandum underscores that without transformative policy shifts, Azerbaijan faces compounded challenges from a declining and aging population and the exhaustion of hydrocarbon reserves. These factors and a lack of diversification in the non-oil private sector are expected to weigh heavily on future growth (World Bank, 2022).


Azerbaijan's political stability remains closely tied to its hydrocarbon revenues, as empirical research suggests a negative correlation between oil dependence and democratic development (Ibadoghlu & Sadigov, 2023). The predicted decrease in hydrocarbon revenues over the next decade threatens to increase job losses in publicly funded sectors and delay wage payments, affecting professionals such as teachers and healthcare workers, who often constitute a supportive base for the authoritarian regime. Additionally, the prospect of devaluation looms as oil revenues dwindle, leading to increased demand for imported goods and a potential imbalance in the real effective exchange rate. The national currency's purchasing power continues to decline, raising expectations for a devaluation decision, typically under political leadership's control rather than economic institutions (Ibadoghlu, 2024F).


Devaluation, if implemented, could accelerate capital flight, increase inflation, and heighten public dissatisfaction, further challenging the regime's stability. There is also the ongoing concern regarding capital transferred abroad by the ruling elite, particularly the Aliyev family. According to the Atlas Project on  Aliyev Empire, two sisters belong  148 companies and  $13 billion fortune (Atlas Sentry, 2024).  Enhanced international anti-money laundering measures could expose and reclaim billions in assets potentially siphoned from Azerbaijan's economy, escalating socio-economic and political tensions domestically. While such a crisis might destabilize the current administration, a regime change would not necessarily lead to democratization. Research on authoritarian regimes indicates that in most cases, transitions replace one authoritarian system with another; only 23% of authoritarian transitions globally from 1972 to 2003 led to democratic governance, and among 344 authoritarian regime periods that ended regime change resulted in democracy in 79. (Hadenius & Teorell, 2006).


As a rentier state, Azerbaijan's political transformations will likely be driven by economic crises rather than international democratic pressures. In response to financial hardships, authoritarian regimes play a significant role, often increasing taxes, fees, and sanctions rather than privatizing state-owned enterprises or selling fiscal assets. Azerbaijan's regime leadership does not immediately respond to oil and gas depletion; they do not feel the post-oil era is approaching.  Former Saudi oil minister Sheikh Zaki Yamani said, "The Stone Age didn't end because we ran out of stones, and the oil age will end, but not because we ran out of oil" (Susan Ratcliffe, 2016).

 

References

 

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