AZERBAIJAN:Oil and gas have given Azerbaijan the fastest-growing GDP in the world, writes Arthur Beesleyin Baku
President Ilham Aliyev has lofty plans for Azerbaijan, a post-Soviet state on the cusp of great wealth thanks to its abundant reserves of oil and gas.
Squeezed between Russia and Iran on the eastern shores of the Caspian sea, Aliyev's secular Muslim country of 7.9 million people is in the midst of a vigorous boom that has hugely increased its strategic importance. Aliyev commands a deeply authoritarian regime that suppresses dissent at home but has many friends in the West because its provision of energy helps reduce Russia's leverage in international markets.
The opening in 2005 of a 1,768km (1,100-mile) oil pipeline linking the Azeri capital, Baku, with Ceyhan on Turkey's Mediterranean coast - via Tblisi in Georgia - provided the first opportunity for Caspian producers to bypass Russia when exporting to Europe and further afield.
With multinational groups such as BP arriving en masse in Baku to trade with the state oil company, Aliyev's low profile on the global stage is at odds with his increasingly powerful position in the international energy market.
Describing oil as a gift from God, he said Azerbaijan has the potential to produce nine billion barrels of the stuff - current production is almost 800,000 barrels per day - and enough gas to maintain supplies for 150 years at current extraction rates.
That's a glittering prize in energy terms, although rampant corruption in Azerbaijan and an ambivalent attitude to democracy are a big cause of concern to the international community.
A further concern is Aliyev's belligerent rhetoric about Armenia's occupation of Azerbaijan's territories in Nagorno Karabakh, over which the countries went to war between 1989 and 1994. With peace talks inconclusive since then, Aliyev has relentlessly ramped up his annual military budget to the tune of $1 billion (€702 million). "Next year it will be much higher . . . We must be ready for any outcome," he said in a group interview for European journalists.
Aliyev inherited power in a disputed 2003 election from his late father, Heydar, a Soviet grandee and former chief of the local KGB who dominated Azeri politics for more than 30 years. It was the first such transfer of power in the former Soviet empire.
Even today, his father's image hangs prominently on posters throughout the dusty streets of Baku in the mode of dear leaders elsewhere. On those same streets, the presence of sleek Mercedes beside fruit-laden Ladas is evidence of a chasm between the wealth of the country's elite and those left behind by the boom.
Aliyev will stand for a second and final term in a presidential election next year, a contest he is widely expected to win. On the sixth floor of the enormous presidential palace overlooking Baku, his remarks do not augur well for the democratic cause. "Frankly speaking, I don't believe that international observers will say that these elections were in full accordance with international standards," he said.
While observers of the 2003 poll for the Organisation for Security and Co-operation in Europe (OSCE) witnessed ballot-box stuffing and tampering with result protocols, Aliyev claims such statements were "politically motivated" and far from reality.
Igbal Agazadeh disagrees. An opposition MP who was severely beaten during the 17 months he spent in prison after disputing the outcome of the 2003 poll, he plans to contest next year's election. Agazadeh speaks in confident terms about his prospects, but readily highlights a litany of shortcomings in political and budgetary accountability in the Aliyev regime. "It's an imitation form of democracy," he said.
For all that, Aliyev insists he is moving his country decisively towards greater transparency and openness and said he wants to go much further.
Lauding the EU for providing the "best experience in the world" in terms of economic development, political freedom, living standards and security, he said Baku was keen to develop ever closer ties with the union.
So does Aliyev want Azerbaijan to join the EU? "In principle yes sure, but we must be realists," he said. "If the EU is ready, or when it's ready, we will of course be happy to be part of this structure."
The reality is that Azerbaijan itself is far from ready for the EU. Aliyev recites impressive figures about Azerbaijan's rapid economic advance - a 35 per cent rise in gross domestic product last year, the fastest in the world - but it remains unclear as to whether his government will successfully manage the growth.
Public spending next year will rise to the equivalent of $12 billion, up from $1.4 billion as recently as 2003. While such an expansion would challenge even the most advanced administration, Aliyev said the construction of new schools, roads, hospitals and power stations was all for the benefit of the Azeri people.
Aliyev's government maintains it is fighting a noble fight against corruption, but his critics charge that such a rapid uplift in expenditure provides ample scope for the illicit siphoning off of public money for private gain.
"The spending area is totally corrupt. Money is stolen - not in the oil well - in government spending. It is becoming uncontrollable," said political analyst Ilgar Mammador, a member of the Azerbaijan Euro-Integration National Committee.
The committee cannot provide concrete examples of corruption, although its concerns are shared by the EU and other international organisations. In Baku, the boom continues. The city has more cranes over its skyline than Dublin ever had in the heyday of the Celtic Tiger.