The city has been a battleground since oil was first discovered. Marco Polo noted, ‘Near the Georgian border there is a spring from which gushes a stream of oil, in such abundance that a hundred ships may load there at once. This oil is not good to eat; but it is good for burning and as a salve for men and camels affected with itch or scab. Men come from a long distance to fetch this oil, and in all the neighbourhood no other oil is burnt but this’ In fact every traveller who visited the region recorded the Fire Temples and patches of seemingly permanently burning ground. Villagers and towns people used to dig a hole, scoop up the oil using their hands and sell it at markets in urns. These may possibly qualify as the world's oldest petrol stations.
The early 1800s saw the arrival of the Russians, who brought a structure and industry to the business of oil. The west arrived later that century and the Nobel brothers set up in business, both the Rockerfellers and Rothschilds were financing drilling and exporting. Everyone had a piece of Baku, and soon the city produced 80% of the world’s oil. The city grew, oil boom mansions of great style appeared, the wide boulevards were reminiscent of 19th Century Paris and quickly expanded out from the coast line.
In 1903 a young Georgian oil worker in Baku began to mobilise and agitate against the appalling working conditions and organised strikes against the Rothschilds. His name was Joseph Dzhugasvili. As early as 1905 ethnic warfare between Azeris and Armenians and the beginnings of the Russian Revolution had seen oil wells set alight and the westerners flee. The first boom was over and ruin set in. Stalin however, as Dzhugasvili became, never forgot the oil of Baku.
At the end of the Second World War Stalin, realising the potential power of the Caspian Oil wealth, knew that his Soviet production needs depended on operations at Baku. He instigated the single biggest offshore installation ever seen: hundreds of kilometres of roads, over six hundred oil wells and thousands of workers. Baku itself never saw any return, the city decayed and crumbled. It was simply a means to an end, one of the many, many Soviet sites of industrial production.
Lots of travel writing uses the cliché ‘East Meets West’. If you believe them all then the east / west frontier is rather extensive indeed: Budapest, Istanbul, Sarajevo, Almaty, Tripoli, Beruit, Cario all get a nod. Although it is becoming a meaningless cliché, Baku is very much in this gang. The Turkic influence in language, culture and the artful stone clutter of the old town is evidently east. The 18th century oil mansions and earlier developments look very much like the streets of Paris or of the Austro-Hungarian boulevards of Budapest. But this current boom has fuelled development on a scale perhaps never seen before. It is a fun city too, there is opera on the sea front every night and singing and dancing everywhere there is a spare space. The enthusiasm is catching.
The blatent and modern consumerism of the west shows itself in the rows of designer stores, over priced, over hyped restaurants and five star hotels by all the big name chains. The architecture has gone hyper glass and steel, the new Flame Towers rise over the city illuminated with the colours of the Azerbaijani flag at night. It really is quite impressive, if you look at it for what it is. It is beautifully dramatic. People should come here on holiday more, they would have a great time. Shame you can’t swim in the sea though.
Azerbaijan became an independent country in 1991 following the break up of the Soviet Union. There was war with Armenia, corruption, spiralling economic chaos and black market criminals prospered. Like Nazerbaev in Kazakhstan, Heydar Aliyev had impeccable Soviet credentials and was elected leader in elections in 1993. His son (and current president, following his fathers death in 2003) found himself Director of Socar, the state Azerbaijani oil company. And so the pattern continues.
The Azeris were terrified of Russian control. They threw their lot in with the American led Western Oil companies and handed over the keys to their chunk of the Caspian in 1994. This, they felt, guaranteed their independence and their economy. It does, this is true, but only partially and definitely temporarily. It means they get paid a shockingly low base rate for their natural resources because the expensive Baku-Tbilisi-Ceyhan pipeline is the route of American control, it cost in the region of $5billion to construct. Other options to reach the market, open to the independent Azeris, would have been a shorter, cheaper and possibly safer Iranian route or the existing Novorossiisk pipeline controlled by the Russians. Believing in America they chose the first option. The BTC pipeline has been described as ‘potentially the greatest industrial ruin in history’. Other references include ‘The Contract of The Century’, it’s only Americans who say this though.
You try valuing the cost of America releasing itself from Middle-Eastern oil dependency and see how important the Azeri fields become.
BTC explains many odd actions, its existence has a huge effect on the dynamic of power in a historically troubled region. For example, on completion of the line in 2007/8 President Saakashvili of Georgia ordered his armed forces into South Ossetia and Abkhazia expecting the west the help him reclaim the disputed territories. They took no action. The Russians unleashed a terrifying assault and the Georgians were humiliated. That gamble on the security of the pipeline leverage has probably cost Saakashvili his control over the country.
Similar simmering resentment and aggression is felt towards the disputed Nagorno-Karabakh region on the boarder of Armenia. Recent hikes in military spending on the part of the Azeris would suggest there is trouble brewing.
One day the wells will run dry, in fact the decline has already started. The Centre for Social and Economic Research reports that 2010 was the peak year for Azeri oil. Year on year fall in revenue is predicted to be 10% from here on in. We’ll worry about that later. Keep building those tower blocks. The Azeris continue to spend, they hosted Eurovision with great kitsch, flashing lights and universal acclaim to those who pay attention to such things. They bid relentlessly for the Olympics and other high profile sporting events, without success it should be noted. They host world Art shows, fashion weeks and other trifles of western excess. In the ultimate irony, wealthy Russians now come here on holiday. There is even talk of a ski resort.
However, this is only in Baku. The construction of paradise on earth is not going to extend to the rest of Azerbaijan. The towns and villages outside of Baku have no other economic stimulus, there is very little to the rest of the economy. Despite the instigation of a Norwegian style ‘oil fund’ to prevent the onset of Dutch Disease (where debt and poverty prevail as no other functional economy exists) there is no evidence of any trickle down effects. There is, instead, increasing unemployment and in turn fundamentalism. It was quietly under reported but on Monday night there was a 500 strong protest against the Burka ban for women in state employment with public facing jobs. Equally typical is that the police were less than even handed in their disbursement of the crowd.
Azerbaijan consistently scores almost rock bottom on various world indices. Press Freedom House ranks countries in order according to the openness of their press, tv and other media. Azerbaijan scored a lowly 171th out of 182 countries. Their neighbours Georgia compare favourably at 118th. In indices of corruption reported by Transparency International, Azerbaijan scored 143rd of 182 countries, again compare this with Geogria at 64th. These statistics are based on 2011, but after the elections this month Georgia may, yet again, be on the brink of serious change.
Amnesty International reported on the façade of democracy and the internment and crackdown on Baku residents who tried to draw attention to state corruption during the 2012 Eurovision Song Contest. It received little press attention. You will find oil renders basic western human rights concepts such as freedom of speech and democracy unnecessary. For precedent see Saudi Arabia.
Remove all this and Baku is great. It’s a wonderful place to go on holiday. Go now though, in a few years the lights will go out.