Eastern Europe November 24, 2009, 9:52AM EST

Rumblings of Instability in Azerbaijan

Rich on oil, the Caspian nation said it had escaped global downturn until the evidence was irrefutable. Now dissent is rising—and the call of Islam is growing

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Although it is just the beginning of June, the sun has instantly warmed the old Soviet buildings of Patamdart, a quarter of Baku located in the city's southern hills. Around noon staying inside becomes unbearable, and there has been no running water for the last few days. On some evenings the flat is lit only by the light of a cheap candle. The warm, dusty wind blowing from Iran rattles the windows and stirs up piles of rubbish. Dawn brings the crowing of cocks and the noises of cows and sheep that are being slaughtered and flayed in the street.

Jaga, a taxi driver, roams the streets of Baku every night, fighting for every fare with other self-appointed cabbies. In his spare time he visits his friend Ludmila in a neighboring block of flats or drinks vodka with his buddies, smoking marijuana and cheap cigarettes under the portraits of the ancient Shia imams Ali and Hussein that hang on the walls. They chat about the good old Soviet times, recalling their past Armenian neighbors, and mocking the TV news in which President Ilham Aliev once again promises to recapture Karabakh from the Armenians.

"They lie and deceive us every day," said Ramiz, who along with Jaga's two other friends helps build mobile phone towers. "It's all about money. You have to pay the doctors, clerks, police. Where am I supposed to get the money for all the bribes? Prices keep rising, but our salaries don't."

Economic data published by the government and international organizations are marvelous. In 2006, the country's GDP rose by 30.5 percent, in 2007, by 23.3 percent, according to the IMF. At that time Azerbaijan was the world's fastest growing economy. The country remains financially stable, its budget is balanced, and unemployment does not exceed several percent.

Baku flaunts its oil money. It's in the good road from the new airport, the skyscrapers springing up in the center, the lavish dachas by the seaside, villas belonging to government officials surrounded by several-meter-high fences with black Hummers parked in front. The fountains on Neftchilar Avenue, continually watered lawns surrounding the Old Town, and thousands of billboards showing old Baku that have recently been erected all around the city. The expensive perfume shops, the restaurants and air-conditioned hotels for foreigners.

Most of those foreigners will never come to Patamdart, nor to the villages of the Apsheron peninsula a few kilometers from Baku, where time stopped over a hundred years ago. Here, people live next to oil wells, children play in puddles of oil, and rivers look like a mixture of sewage and petrol.

In the wake of the global financial crisis the government remained silent about the effects on Azerbaijan and its economy.

"The whole world was already struggling with the crisis, but our government still claimed that it had miraculously bypassed Azerbaijan thanks to the weak integration of the Azerbaijani economy with the global market," said Hikmet Hajizade, director of the FAR Center for Political and Economic Research in Baku. "It wasn't until oil prices dramatically fell and Baku's construction sites came to a standstill that the government officially admitted that there was something to it."

The crisis is hitting ordinary people increasingly hard. Many factories have stopped production, the construction industry is plagued with enormous problems, wages are paid only after long delays, and, although down from about 20 percent in 2008, inflation is expected to remain troublesome this year, according to the IMF.

Compared with Georgia and Armenia, where opposition demonstrations and other destabilizing events happen relatively often, Azerbaijan seems stable. The country saw the last turbulent moments in 2003, when the authorities put down opposition protests staged after rigged presidential elections. But the lack of visible signs of potential destabilization in Azerbaijan is misleading.