Azerbaijan: out of tune?

Posted 21 May 2012

Despite its massive oil resources, Eurovision 2012 host Azerbaijan is plagued by endemic corruption that prevents ordinary Azerbaijanis from sharing in their country’s natural wealth and is a significant barrier to Azerbaijan’s development.

Azerbaijan is one of the lowest scoring countries in the Corruption Perceptions Index (CPI) to host the Eurovision Song Contest over the past ten years.

Graphic showing CPI scores in recent Eurovision host countries

A country/territory’s score indicates the perceived level of public sector corruption on a scale of 0 - 10, where 0 means that a country is perceived as highly corrupt and 10 means that a country is perceived as very clean. A country's rank indicates its position relative to the other countries/territories included in the index.

Anti-corruption activists are helping take post-communist Azerbaijan forward encouraging citizens to hold authorities to account, be it through mediation or the justice system.

Azerbaijan and corruption in figures

US$ 7.4 billion – the value of the deal signed with 11 Western oil companies in 1994

7 billion barrels of oil and 1.3 trillion cubic metres of natural gas – Azerbaijan’s proven natural resources as of the end of 2010

How Azerbaijanis see corruption according to Transparency International’s 2010/11 Global Corruption Barometer:

52 per cent – proportion of Azerbaijanis who say corruption in their country increased over the past three years
47 per cent – the proportion of Azerbaijanis who had paid a bribe to one of nine different service providers such as the police – the institution they consider to be the most corrupt in their country

2.4 – Azerbaijan’s score on Transparency International’s 2011 Corruption Perceptions Index, ranking it 143 out of 183 countries. Amongst countries in Eastern Europe and Central Asia, it ranked 13 out of 20 countries, tying with Russia and Belarus

8 out of 12 – the number of oil and gas companies operating in Azerbaijan that score below average on country-level corporate disclosure, according to Promoting Revenue Transparency in Oil and Gas Companies (2011)

Corporate disclosure of oil and gas revenue graphic

(Diagram taken from Promoting Revenue Transparency in Oil and Gas Companies (2011), p.38)

Anti-corruption milestones for Azerbaijan

2000 – Transparency Azerbaijan, the Azerbaijani chapter of Transparency International, is established

1 January 2005 – the Law of the Republic of Azerbaijan on Combating Corruption comes into force

2005 – Azerbaijan ratifies the United Nations Convention against Corruption

28 July 2007 – the National Strategy on Increasing Transparency and Combating Corruption is approved by the Decree of the President of the Republic of Azerbaijan

2009 – Azerbaijan is designated fully compliant with the Extractive Industries Transparency Initiative, meaning that it discloses payments from oil companies

2009 – Azerbaijan is “World’s Top Regulatory Reformer” according to the World Bank and IFC’s Doing Business 2009

2010 - Azerbaijan scores 75.1 in the 2010 Revenue Watch Index, which assesses information disclosure by governmental bodies in 41 resource-rich countries, placing it in the highest category

2011 – A report (PDF) by Transparency Azerbaijan monitoring Azerbaijan’s commitments to the European Neighbourhood Policy reveals substantial progress in the fight against corruption, and commends the creation of a national data base of corruption-related offences and government efforts to tackle money laundering.

The report also finds that the civil service has made some progress regarding the recruitment of young professionals and has increased ethics and integrity training, but that a lack of managerial skills continues to weaken the public sector.

However, the same report finds that the justice sector suffers from weak enforcement, lack of transparency and limited independence as the executive branch exerts strong control over judicial appointments. Better transparency in the system of public procurement is another must.

May 2011 – President Ilham Aliyev signs an order on improving e-government in the country. Whilst this is a promising development, Transparency Azerbaijan holds that without a concerted government effort to educate the population about e-governance, it will be difficult for the population to benefit.

Anti-corruption stories

Transparency Azerbaijan runs five legal advice centres which provide free and confidential legal advice to witnesses and victims of corruption.

The centres have logged 31,432 complaints since the first one opened in 2006. The judiciary attracted the most complaints (5414).

Among others, the centres assist small-time entrepreneurs, like Kerem and Hikmet, who are subject to land and property corruption.*

Kerem tried in vain to secure planning permission for his shop from local authorities. After his store was bulldozed, Kerem took his case to court but lost both initial case and appeal. He turned to Transparency Azerbaijan who forwarded an appeal to the State Anti-Corruption Commission, who in turn contacted the regional authorities. Kerem was later granted permission to rebuild his shop, and received free building materials as compensation.
Hikmet planned to convert the front room of his small apartment into a flower shop, like many other residents on his Baku street. After applying for planning permission, someone informally offered to ‘ensure his planning application was accepted’ in return for US$ 10,000, a figure that far outstripped his annual pension. He refused, and shortly afterwards his application to open the flower shop was deferred.

Hikmet appealed the decision in court, with Transparency International Azerbaijan’s support. The municipality was told to process his application fairly and Hikmet was soon given permission to open his flower shop.

* Names have been changed