The government failed to prevent Holland disease (end)

The fever concerned with the forthcoming European Games has reached its peak in May 2015. The Azeri officials have shown using all the methods that with their efforts the Games will be held with perfection. Good sports infrastructure, the access roads to the Olympic facilities and good sports villages for the sportsmen have been built. But the recent fire took lives  and even President offered his condolences to the families of the victims and admitted that this is a very unpleasant event on the eve of the European Games. The families that have lost their homes have been provided temporary dwelling and financial assistance. The builders have started removal of polyurethane coating from 250 houses, which facades have been decorated like this illegally. This is a crying example of how monopoly in any field could be dangerous by imposing standard and cheap product.

The “second row” of the Azerbaijan economic establishment, which seemed to be stable till recently, has rocked. We knew even earlier that not everybody and always pays off debts to the banks. SOCAR could just not pay off its debt to International Bank of Azerbaijan (IBA). But one could understand this situation – the company has a good paying capacity, its correspondent accounts were in the same bank, which is already a good support for the bank. The company could enlist support of the government – this is the biggest company in the country. International auditors warned about accumulation of overdue debts to IBA from time to time. But later on these negative indexes mysteriously reduced: the credits could have been paid off, but it is not ruled out that they have been simply re-structured.

The situation in IBA has shed the light to some other serious problems of the country bordering on politics. It is clear now that this is the matter of repayment of credits worth hundreds of millions AZN. The Department to Combat  Gangsterism acted as the bank collector, which helps to get money from the clients. Some of them have been offered “the remedial agreement”, which  has been in effect in Georgia for a while: partial compensation of damage in exchange of freedom. It is not stipulated by the law, but it was introduced on the spur of the moment. A significant number of “credit oligarchs” had gone through unpleasant days, but they are free again. By the end of the month the problem has become less urgent. But reputation of the IBA has been damaged, because this is a backbone bank of the country. Several big factories stood idle for several weeks and even some “captains” of our economy have been called to interrogation to the “gangster department.” This is, definitely, failure of the system.

The authorities feel offended when the western countries say that many arrests of human rights NGOs are politically motivated. Then why are these arrests are very often discussed in the context of struggle against the “color revolutions”? If the famous human rights activists are tried for tax violations, why they are no offered the “remedial agreement”  as well – pay off the debts and you are free?

It is, probably, the matter of political logic, the goal of which is to suppress dissent and sow the seeds of uncertainty in the society. But the authorities simply must draw a clear line between political struggle and struggle against dissent, because struggle against dissent is an ungrateful business from the economic viewpoint. We always talks about economy of knowledge. It is impossible without various view points. If it becomes “criminal”, then it narrows the field of alternative proposals for the economy. Many organizations, which had useful ideas about economic development and improving legal culture in the society, have fallen under the category of NGOs. Some trials are simply absurd and the lawyers  have no power: one cannot use logic to fight absurdity. This again undermines the trust of the institution of legal profession and the entire judicial system. Who is going to invest capital into the country, in which your rights are not protected?

The pro-governmental media often write about inevitability of authoritarianism for our country. One can cite examples of great economic results of authoritarianism – from China to South East Asia. But in these countries the right of property was protected and the judicial system worked, so it was easier to attract foreign investors. But the system of government, in which the authorities are supported by a narrow group of the economic establishment, becomes inefficient and sometimes even dangerous for the government. There are talks about de-offshorization and even rumors that the law will be passed in the near future. But as the issue is urgent and has to do with the amnesty of capital, the parliament postponed discussion of the law till autumn. Right after the fire in the multi-storey residential building President Aliyev complained about inactivity of the municipal agencies and even called the museum exhibits of the executive authorities. The executive authorities have been blocking development of municipalities for years. In other words, there is time to make changes here. Another interesting news is that at the end of May Kazakhstan President Nursultan Nazarbayev said that the presidential power in Kazakhstan has exhausted its possibilities and it is time to give more powers to the parliamentary branch of power. It is hard to imagine that such a politician needs political rhetoric, especially after the elections. This statement is most likely caused by the desire to leave a stable political system after himself.

In May we have again felt the role of demonstrative gestures in politics. Russia did not like that against the background of confrontation with Russia, the West takes efforts to diminish Russia’s role in victory over the fascist Germany. Russia has not heard the appeals of the West to celebrate May 9 as the memorial day of the war victims or reconciliation. Russia has preferred to intimidate the West with its power by organizing an impressive military parade on the Red Square devoted to the 70th anniversary of the Victory. The parade was different from the previous ones against the background of events in Ukraine.

It is getting harder for Azerbaijan to pursue multi-vector policy against this background, which was successful in the past. President Ilham Aliyev refused to attend the summit in Riga. The Eastern Partnership project has been undergoing through a serious crisis. Some Ukrainian politicians have even offered to remove Belarus, Azerbaijan and Armenia from the project. The European Union intends to develop bilateral relationships with six countries-members of the Partnership. But Azerbaijan delays signing of the agreement with EU on strategic upgrade of the relationships, though the idea itself belongs to our country. The Azerbaijan government officials continue attacking the western institutions. Does this mean an objective turn towards the Eurasian society or simply the attempts to play up to Russia? It is hard to answer this question. The Azerbaijani authorities continue speaking about independent foreign political course of the country, though it is obvious the relationships of Russia have improved. May be the anti-western sentiments draw the countries closer together, or may be Azerbaijan secretly hopes to find the key to solution of the Karabakh conflict in the Kremlin.

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