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AZERBAIJAN - Profile - Gaidar Aliyev.

Also called Haydar and in power since June 1993, President Aliyev controls Azerbaijan. He tries to decide all things, big and small. This slows decision making as some ministers only get to see him once every few months. When he is out of the country, "everything stops", according to a foreign ambassador in Baku. "People hardly even dare to fix a toilet without his approval". But Eldar Namazov, one of his close aides, says: "People gravitate towards him because he has such a huge personality".

Aged 77, Aliyev is vigorous and has few thoughts about his mortality, bristling at any discussion of who his successor might be. He was re-elected to a second five-year term on Oct. 11, 1998. Soon thereafter Elgar Kerimov, head of the new AzerShah political party, told reporters in Baku that Aliyev was so vital to Azerbaijan's stability that he should be made monarch under the constitution. Aliyev is grooming his only son, Ilham, to succeed him. Ilham is the first vice president of Socar and deputy chairman of the ruling Eni Azerbaijan (New Azerbaijan) Party.

Aliyev uses tactics he applied as KGB chief of Baku in the 1970s. While harsh, these tactics have managed to create some degree of stability - the last failed coup attempt was in March 1995 - compared to the chaotic situation before. Between 1991 and June 1993, the country had four changes of government amid much bloodshed. Aliyev has consolidated his hold on power since that ceasefire. The key opposition figures are either in exile or in prison. Demonstrations by the tolerated opposition in May 2000 were broken up and were followed by a systematic crack down on their leaders. The demonstrators wanted electoral reforms and better human rights policy.

Azerbaijan fought a war with Armenia sporadically from 1989, ending in a ceasefire on May 12, 1994 as a result of which Armenia occupies about 20% of Azerbaijan's territory. To tilt the balance in favour of Baku as well as keep Russia and Iran on their guard, Aliyev has even urged the US to have military base facilities in Azerbaijan. But the request was promptly turned down.

Aliyev's focus is to turn Azerbaijan into a wealthy country rivalling the rich Arab Gulf oil states. Under him, Azerbaijan has the greatest number of E&P deals of any Caspian country. In dealing with the big powers, companies and the country's neighbours, Aliyev keeps in mind that petroleum and geo-politics have always been inter-related in Azerbaijan. Petroleum has been produced since 1870, with Baku then known as "the world's oil capital".

Oil consortia lined up in Baku, which is isolated from the major markets, reflect a balance between two blocs competing for influence in the Caspian: the US/Europe and Turkey on one hand, and Russia and Iran on the other. Aliyev is trying to keep good relations with all sides but he has had mixed success in trying to please everybody.

The biggest consortium groups companies from several countries, including the US, called Azerbaijan International Operating Co. (AIOC) and led by BP Amoco. AIOC has the blessings of Washington, the West European powers, Ankara and Moscow. Initially, Aliyev had intended to give Iran a 5% share out of Socar's 20% stake in AIOC. But US pressure forced Baku to abandon that plan, according to Aliyev in an interview with London's 'Financial Times' of June 8, 1995. He added in the interview that "the Iranians were very offended...but we do not want to complicate our relations with Iran, because we have a common border and we are joint users of the Caspian". The second consortium, for Shah Deniz, excludes US companies because it has an Iranian partner - Oil Industries Engineering & Construction Company (OIEC) - which is vetoed by Washington.

Another challenge for Aliyev is exporting the oil and gas to be produced by the consortia. Various pipeline routes have been considered, again reflecting the interests of the two main power blocs. Russia wants all Azeri exports to be routed through its own territory. The US prefers the Turkish route. Either side can block proposals by different means: the US/Europe/Turkey bloc controls the financing end, while Russia can undermine Baku's efforts to become the hub for Caspian energy supplies to the West by vetoing undersea oil and gas pipeline projects bound for Ceyhan, passing from Kazakhstan and Turkmenistan via Azerbaijan. Iran can challenge Azerbaijan's right to develop offshore petroleum because the legal status of the southern Caspian Sea is undecided.

Key players on the Azeri side in this matter are Shahin Aliyev, the president's legal advisor, and Vafa Goulizadeh, his advisor on geo-politics. In trying to overcome the challenges Aliyev would use his vast web of Russian, Azeri and ex-Soviet connections - including Azeri businessman Marat Manafov whom he appointed as chief negotiator for E&P deals after taking power in 1993. Aliyev often leads delegations to the West to attract foreign companies, and is usually accompanied by a number of ministers involved directly or indirectly in the petroleum sector. London is a location of choice for the Azeris.

Aliyev gains much from influential lobbyists in Washington, including Jewish leaders. Dick Cheney, currently US Vice President, was chairman of Halliburton which is operating in Azerbaijan. Former president Clinton's treasury secretary, Lloyd Bentsen, is a shareholder in Frontera Resources, an oil services company working in Azerbaijan. Frontera is chaired by another Texan, William White, a deputy secretary of energy in Clinton's administration.

Brent Scowcroft, national security chief under the previous Bush administration, was reportedly paid $100,000 in 1996 by Pennzoil for consulting on international projects and also earned a $30,000 director's fee from the company, with Pennzoil President Tom Hamilton having become a friend of Aliyev. AIOC is a client of former secretary of state James Baker's law firm. The previous Bush White House chief of staff John Sununu's management-consulting firm, JHS Associates, was contracted by the Azeri government during Aliyev's visit to the US in July/August 1997. Carter national security advisor Zbigniew Brzezinski is a consultant to BP Amoco, with AIOC promoting Baku's cause in Washington.

Aliyev's style of rule leaves a big question mark over the country's future, however. This is because no successor is likely to have his stature in the country, and a domestic power struggle could easily return the country to the situation in 1991-93. In 1997, Aliyev designated June 15 as a National Salvation Day and, like Ataturk in Turkey, his portrait is in every school or office.

Along many roadsides, billboards bear quotations from his speeches, such as, "I have devoted my entire life to my country". There are questions about Aliyev's health, however. Rumours have been circulating for some time about his diabetes, which is said to be complicated by a problem with his lungs. He had a heart attack in 1987 and was hospitalised in Turkey in early 1999.

Background: Born in Nakhichevan in May 1923, Aliyev was educated by the Soviet system and spent his career rising rapidly through Communist Party ranks. From 1941 he served in the Azeri State Security Organisation. In 1969 he became party first secretary as well as KGB chief at Baku. In the 1970s, then Soviet leader Brezhnev made him a member of the Soviet Communist Party Politburo, the most powerful body in the USSR.

At the time Azerbaijan experienced an economic boom. In 1986, about a year after Gorbachev took over, Aliyev was quietly pushed out of power in Baku. He spent the following years in Nakhichevan, where he became head of that republic.

From late 1992 to June 1993, Aliyev publicly carped at the style of leadership of Azerbaijan's then president Abulfaz Elchibey (who had been elected in June 1992, and was intensely pro-Turkish) and quietly but efficiently rebuilt his political base in Baku.

That base had timely use in June 1993 when Elchibey fled Baku to Nakhichevan, to escape a military rebellion led by Col. Suret Gusseinov, who was co-ordinating with Aliyev. As Aliyev later put it, he was "invited to return to Baku to keep the seat warm for Elchibey until the crisis is resolved".

Aliyev, as "acting president" and parliament speaker, organised a referendum on Elchibey's leadership. The outcome, on Aug. 28, 1993, was in Aliyev's favour. On Sept. 2 parliament set the date for the next presidential election. On Oct. 3, 1993 Aliyev was elected president by parliament. Immediately the former Soviet apparatchik took direct control of the oil sector.

Literature on Aliyev's rule distributed in Baku described how his determination to build the country's industries under the Soviets (he headed the first air-conditioner factory) had inspired confidence in him by the Azeri people and Moscow. Just before the November 1995 parliamentary elections, the discovery of a "plot" to kill Aliyev was followed by a crackdown on the opposition.

Western monitors expressed "unease" at the way the polls were conducted, but Aliyev's party won with a clear majority. In a parallel vote, Azeris gave 91.9% backing to a new constitution boosting Aliyev's powers at the expense of parliament. The next parliamentary elections are due in the autumn.

Natik Aliyev, made head of Socar in 1993 by Aliyev, is a geologist. His powers are limited. Ilham Aliyev, the first vice president of Socar in charge of foreign relations and the president's son, is far more powerful. Khoshbakht Yusifzadeh is vice president for exploration and geology and in charge of the divisions for production, economics, finance and processing.

The head of Socar's foreign investment division is Valekh Aleskerov. Rafik Abdullayev is Natik Aliyev's assistant and Socar spokesman. Socar, formed in 1992, has a monopoly of every aspect of the industry, with more than 75,000 employees, many subsidiaries, four scientific institutes, medical sanatoria and kindergartens. Much of its equipment is obsolete. Up to 40% is in need of repair.
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Publication:APS Diplomat Operations in Oil Diplomacy
Article Type:Statistical Data Included
Date:Jul 9, 2001
Previous Article:AZERBAIJAN - Part 1 - Decision-Makers.
Next Article:AZERBAIJAN - Profile - Ilham Aliyev.

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