Azerbaijan's Stability: A Comprehensive Overview

Azerbaijan is a transcontinental country in Eastern Europe and Western Asia with a tumultuous history. It has been ruled by various empires, including the Persian and Russian empires, and was incorporated into the Soviet Union in the 20th century. Since gaining independence in 1991, Azerbaijan has faced several challenges, including conflict with neighbouring Armenia over the Nagorno-Karabakh region.

Azerbaijan is a unitary semi-presidential republic with a strong executive branch and limited political opposition. The country has been accused of authoritarianism and human rights abuses under the Aliyev family, who have been in power since 1993.

Azerbaijan's economy is heavily dependent on the oil and gas sector, which has led to economic instability and a lack of economic diversification. Despite this, the country has solid macroeconomic fundamentals, with low public debt and substantial foreign currency assets.

Azerbaijan's stability is influenced by its geopolitical position, with tensions between neighbouring countries, particularly Armenia, and the presence of Russian troops in the region. The country's commitment to democratic principles and human rights has been questioned, with reports of restricted civil liberties and media freedom.

Overall, Azerbaijan faces challenges in terms of political and economic reform, human rights, and regional tensions, which impact its stability.

The Nagorno-Karabakh conflict

The First Nagorno-Karabakh War (1988-1994)

In February 1988, the enclave's parliament, the Nagorno-Karabakh Autonomous Oblast (NKAO), voted to unite with Armenia, citing self-determination laws in the Soviet constitution. This act was met with a series of pogroms against Armenians across Azerbaijan. Violence was committed against both Armenians and Azerbaijanis, and the tensions gradually grew into an increasingly violent conflict between ethnic Armenians and ethnic Azerbaijanis.

Amid the Soviet Union's collapse in 1991, Nagorno-Karabakh officially declared independence, and full-scale war erupted. The first Karabakh war resulted in roughly 30,000 casualties and hundreds of thousands of refugees. By 1993, Armenia had gained control of Nagorno-Karabakh and occupied 20% of Azerbaijan's geographic area. A Russian-brokered ceasefire, known as the Bishkek Protocol, was signed in 1994, leaving Nagorno-Karabakh de facto independent, with a self-proclaimed government in Stepanakert, but still heavily reliant on Armenia.

Intermittent Clashes and Border Violations (1994-2020)

Since the bilateral acceptance of a ceasefire in 1994, which formally remained in force until September 2020, the use of attack drones, shelling, and special operations activities by Armenian and Azerbaijani troops have led to intermittent clashes. Early April 2016 witnessed the most intense fighting since 1994, leading to hundreds of casualties along the line of separation. After four days of fighting, a ceasefire was agreed upon, but tensions remained high, with both sides accusing each other of violations.

In 2018 and 2020, several clashes occurred, particularly heavy in July 2020. In September 2020, heavy fighting broke out along the Azerbaijan-Nagorno-Karabakh border, with thousands of soldiers and civilians killed and wounded. Both countries initially rejected pressure to hold talks and end hostilities. The conflict escalated further when both sides switched to longer-range artillery and other heavy weaponry. After several failed attempts, a ceasefire was finally brokered by Russia on November 9, 2020, ending the six-week Second Nagorno-Karabakh War. Azerbaijan reclaimed most of the territory it had lost, and the agreement established the Lachin corridor, a strip of land monitored by Russian peacekeepers, to serve as a transit route connecting Armenia to Nagorno-Karabakh.

The Blockade of Nagorno-Karabakh (2022-2023)

In December 2022, Azerbaijan launched an illegal blockade of Nagorno-Karabakh under the guise of "environmental protests." Azerbaijani citizens, disguised as "eco-activists," blocked the Lachin corridor, the only road connecting Artsakh to Armenia and the outside world. This blockade had severe consequences, as the importation of food, fuel, and medicine was blocked, creating a humanitarian crisis.

The 2023 Offensive and Dissolution of Artsakh

On September 19, 2023, Azerbaijan launched a military offensive in Nagorno-Karabakh, resulting in the flight of almost the entire population of Nagorno-Karabakh to Armenia within a week. A ceasefire was reached the following day, and negotiations began over the disarmament of Armenian separatists and the reintegration of Nagorno-Karabakh into Azerbaijan. Artsakh was officially dissolved on January 1, 2024.

International Mediation and Future Prospects

Negotiation and mediation efforts, led primarily by the Minsk Group of the Organization for Security and Co-operation in Europe (OSCE), have failed to produce a permanent solution to the conflict. While the group has successfully negotiated ceasefires, territorial disputes remain unresolved.

Following the 2020 war, both Russia and the European Union have increased their presence in Armenia to improve border stability and deter Azerbaijani offensives. However, despite these efforts, full-scale warfare has not been prevented. The future of the region remains uncertain, with ongoing border tensions and the risk of further escalation.

Azerbaijan's economic dependence on oil and gas

Azerbaijan's economy is highly dependent on its oil and gas sector, which has brought about a sharp rise in living standards since the late 1990s. Oil and gas comprise two-thirds of Azerbaijan's GDP, making it one of the top ten most fossil fuel-dependent economies in the world.

The country's oil wealth has significantly strengthened the stability of President Ilham Aliyev's regime and enriched the ruling elites. However, this heavy dependence on the hydrocarbon sector has left Azerbaijan vulnerable to the negative effects of oil price volatility. While oil and gas exports continue to dominate the economy and provide the majority of government revenue, the long-term outlook for this economic model is uncertain. Oil production is declining, and major oil and gas-importing countries have pledged to reduce greenhouse gas emissions to net-zero by 2050, implying little demand for oil or gas without carbon capture and storage.

Azerbaijan's oil and gas sector is predominantly government-owned, with the State Oil Company of the Republic of Azerbaijan (SOCAR) being the country's national oil company. Oil and gas bring in around 90% of Azerbaijan's export revenues and finance around 60% of the government budget. They also supply 98% of primary energy and more than 90% of the country's electricity.

The transition to oil production in the late 1990s led to rapid economic growth over the period 1995-2014. However, since 2014, GDP growth has slowed down substantially. The completion of the Baku-Tbilisi-Ceyhan Pipeline, which transports Caspian oil to the Mediterranean, has been particularly significant in this regard.

Azerbaijan has recognized the need to reduce its economic dependence on oil and gas exports and has started taking steps towards diversification. The government has drafted proposals for electricity and gas market reforms and is working on the country's first specific energy strategy. There is also potential for renewable energy development, with excellent solar and wind resources and significant biomass, geothermal and hydropower prospects.

To attract new market entrants and investments, Azerbaijan needs to increase the efficiency and diversity of its domestic energy supply and use. This includes improving energy efficiency, reducing subsidies, and encouraging the use of renewable energy sources.

The Aliyev regime

Azerbaijan is a unitary semi-presidential republic, with a government that functions as an authoritarian regime in practice. Since 1993, the country has been ruled by the Aliyev political family and the New Azerbaijan Party (NAP), established by Heydar Aliyev. Heydar Aliyev's son, Ilham Aliyev, is the current president of Azerbaijan.

Ilham Aliyev's presidency has been marked by the stabilisation of the country's political life and economic growth driven by oil exports. However, this stability has come at the cost of consolidating authoritarian rule, suppressing freedoms, and increasing reliance on corruption and patronage networks to dominate public life. The international community has little leverage to pressure the regime, but experts argue that it is in the regime's self-interest to liberalise and open up political space to prevent a surge in radicalism and instability in the medium to long term.

• Authoritarian Rule: The Aliyev regime has been described as authoritarian, with power concentrated in the hands of President Ilham Aliyev and his extended family. The regime has been accused of suppressing opposition parties and free press, arbitrary arrests, and human rights violations, including torture and harassment of journalists and non-governmental organisations.
• Economic Growth and Oil Dependence: Azerbaijan's economy is heavily dependent on the oil and gas sector, which has resulted in volatile GDP growth. While oil revenues have contributed to stability, the country faces structural weaknesses, sluggish growth, and a significant level of perceived corruption.
• Political Stability and Suppression: The Aliyev regime has successfully stabilised the country's political life, but this has been accompanied by the suppression of freedoms. The government has effectively prevented political forces, civil groups, media, and religious communities from becoming self-sustainable challengers. Opposition demonstrations are regularly prevented or violently broken up, and civil activists often face restrictions.
• Corruption and Patronage Networks: The Aliyev regime has been criticised for its high levels of corruption and the use of patronage networks to dominate various aspects of public life. The ruling elite, including the Aliyev family, have enriched themselves through ties to state-run businesses and hidden their wealth through offshore companies.
• International Relations: Azerbaijan has sought to strengthen its international relations, including cooperation with the European Union, Russia, and NATO. However, its foreign relations have been tainted by allegations of "caviar diplomacy," where the regime allegedly bribed foreign officials and journalists to promote a positive image.
• Human Rights Violations: The Aliyev regime has been accused of severe human rights violations, including torture, arbitrary arrests, and suppression of freedom of expression and the press. Discrimination against LGBT individuals is also prevalent in the country.
• Lobbying and Money Laundering: The regime has been implicated in money laundering scandals, such as the "Azerbaijani laundromat," where they allegedly paid off European politicians to deflect criticism and promote a positive image.
• Electoral Fraud: Elections under the Aliyev regime have been marred by fraud and irregularities. The ruling New Azerbaijan Party, led by President Aliyev, has maintained its grip on power through undemocratic means.
• Geopolitical Conflicts: During Aliyev's presidency, Azerbaijan has been involved in conflicts with Armenia over the Nagorno-Karabakh region, resulting in territorial gains for Azerbaijan but also contributing to instability in the region.

Azerbaijan's international relations

Azerbaijan has diplomatic relations with 185 United Nations member states, the State of Palestine and the Holy See. It does not have diplomatic relations with the Central African Republic and the Federated States of Micronesia.

Azerbaijan is a member of the United Nations, the Non-Aligned Movement, the Organization for Security and Cooperation in Europe, NATO's Partnership for Peace, the Euro-Atlantic Partnership Council, the World Health Organization, the European Bank for Reconstruction and Development, the Council of Europe, the CFE Treaty, the Community of Democracies, the International Monetary Fund, and the World Bank.

Azerbaijan has an embassy in Addis Ababa, Ethiopia; Rabat, Morocco; Baku, Georgia; Ankara, Turkey; Tehran, Iran; Baghdad, Iraq; Buenos Aires, Argentina; Brasília, Brazil; Ottawa, Canada; Santiago, Chile; Bogotá, Colombia; Havana, Cuba; Mexico City, Mexico; Washington, DC, USA; Montevideo, Uruguay; Baku, Azerbaijan; Riyadh, Saudi Arabia; New Delhi, India; Jakarta, Indonesia; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; Baku, Azerbaijan; 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Civil liberties and human rights

Azerbaijan's civil liberties and human rights situation has been a cause for concern for several international bodies and governments. The country's civil liberties index, which evaluates freedom of expression and belief, associational and organizational rights, rule of law, and personal autonomy and individual rights, has shown a declining trend, falling from a score of 16 in 2014 to 8 in 2020, with the latest value from 2020 being 6 points.

The government has been criticized for severely restricting the freedoms of expression, assembly, and association. This includes the repression of activists, journalists, and opposition leaders, both within Azerbaijan and abroad. The authorities have also targeted government critics, with critics being jailed for up to 30 days and facing charges such as criminal hooliganism and disseminating prohibited information online. The government has also been accused of promoting a sense of impunity and encouraging self-censorship among the public, as well as denying the right to freedom of assembly by preventing and violently breaking up opposition demonstrations.

There have also been reports of torture and ill-treatment in police custody and places of detention, with human rights groups and media outlets reporting on credible allegations of torture. LGBT individuals also face ill-treatment, extortion, arbitrary detention, and discrimination by state and non-state actors.

The European Parliament and other international bodies have called on Azerbaijan to address these human rights concerns, improve the overall human rights situation in the country, and implement legal reforms. They have also encouraged EU leaders to use upcoming gatherings, such as the United Nations Climate Change conference (COP29) in Baku, as opportunities to address Azerbaijan's poor track record in the field of human rights.

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