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Caucasus Report: August 8, 2003

8 August 2003, Volume 6, Number 28

AZERBAIJANI OPPOSITION MULLS OPTIONS. At press conferences in Baku on 5 and 6 August, leading Azerbaijani opposition politicians announced their intention to convene mass protests against the appointment of ailing octogenarian President Heidar Aliev's 41-year-old son, Ilham, as prime minister.

Other opposition politicians have embarked on a hunger strike in protest. But it is by no means clear whether the population at large feels strongly enough to take to the streets and protest. And deep-seated rivalries among the various opposition parties and groupings are likely to preclude their closing ranks behind a single candidate to challenge Ilham Aliyev in the presidential ballot scheduled for 15 October, a failure that may in turn fuel popular apathy.

Opposition groupings were swift to denounce the parliament's 4 August endorsement of Ilham Aliev's nomination as prime minister and the ensuing decree confirming his appointment. The Opposition Coordinating Center (MKM) comprising nine opposition parties, the Amal movement that represents the Azerbaijani intelligentsia, and the Monitoring Group of Human Rights Organizations all termed the appointment a coup. The MKM issued a statement saying it will not recognize the legality of any decrees purportedly issued by President Aliyev until the state of his health is clarified. Musavat party Chairman Isa Gambar and Azerbaijan National Independence Party (AMIP) leader Etibar Mamedov both argued that Ilham Aliev's appointment as premier violates Article 69.2 of the Election Code, according to which a registered presidential candidate cannot subsequently be appointed to a senior government post.

But the opposition did not take any immediate steps to mobilize the population to protest Ilham's appointment. In an interview carried on 7 August by the online daily, Ali Kerimli, who heads the reformist faction of the divided opposition Azerbaijan Popular Front Party (AHCP), acknowledged that such a failure was a tactical mistake, but at the same time explained that opposition parties can mobilize far more people when they act together, and that it invariably takes time to coordinate a mass protest.

During further consultations, opposition leaders reached consensus on three issues. They agreed to send representatives to Ankara to ask the management of the Gulhane military clinic to release comprehensive information on President Aliev's condition and treatment; to stage protests on 8 August outside the U.S. and Turkish embassies against the failure of either government to condemn Ilham Aliev's appointment as prime minister as unconstitutional; and to organize protest marches in Baku and across the country on 9 August.

Several opposition leaders have expressed confidence that the population at large is unhappy with Ilham Aliev's appointment and that the opposition will be able to tap into that discontent. Musavat party head Gambar told on 8 August that "society as a whole is unhappy with this attempt to turn Azerbaijan into a monarchy. And the MKM is formulating its policy and planning its actions in accordance with that discontent." Kerimli, for his part, said in his interview with on 7 August that "if tens of thousands of people take to the streets on a sweltering August day, that will be a signal to those circles that are following developments in Azerbaijan. They...will understand that our society is resisting, is struggling against a second attempt to usurp power."

AMIP Chairman Mamedov told that "personally I am prepared to take radical action," explaining that "society should resist attempts to impose [the authorities'] will on it." Kerimli, more circumspect, affirmed that "we are prepared for any radical steps within the framework of the constitution."

But the one thing which opposition leaders are clearly reluctant to do is to close ranks behind a single presidential candidate -- a possibility that has been on the agenda for months. Kerimli, Gambar, and Mamedov have all registered to contest the ballot, and while none of them has said as much, all three clearly consider themselves the best-qualified candidate to represent the opposition. Gambar told he is confident that "democratic forces" will triumph on 15 October, adding that while he considers Heidar Aliyev "a more serious rival," he does not doubt his own ability to defeat Ilham. He dismissed questions about the possibility of a single candidate as inappropriate in present conditions. Mamedov, who ran against Heidar Aliyev in the 1998 presidential ballot and claimed to have polled 35 percent of the vote, said that the public is demanding that the opposition align behind a single candidate. But he added that reaching consensus will take time, and doing so is not part of the MKM's mandate. Kerimli, at 38 the youngest of the three, has said earlier he is ready to withdraw from the ballot in favor of a single opposition candidate, should one be chosen.

The Azerbaijani authorities, for their part, have downplayed the likelihood that the opposition will mobilize the population at large in mass protests against Ilham Aliev's appointment. Ilham himself told journalists on 7 August that he believes his appointment has given people a sense of security (see "RFE/RL Newsline," 8 August 2003). But other members of the leadership could adduce the affirmed readiness of Kerimli and Mamedov to take "radical steps" as a pretext for a crackdown, or for preemptive arrests. Interfax on 6 August quoted Fazail Aghamaly, leader of the pro-presidential Ana Vatan party, as telling journalists that "according to information provided by reliable sources, some opposition parties, anticipating their defeat at the elections, are working on a plot to seize power by illegal means."

In the short to medium term, political stability in Azerbaijan may hinge less on the actions of opposition parties than on a combination of other factors: the extent to which the present ruling elite closes ranks behind the new premier in order to protect their own political and financial interests; whether Heidar Aliyev resigns, thereby necessitating the setting of a new election date; and whether, if that happens, Russia considers it expedient to intervene and back one or the other opposition candidate.

A detailed analysis published in on 2 August -- prior to Ilham's appointment -- concluded that the foundations of political power for the next two decades, a period that will decide Azerbaijan's future, are being laid now. For that reason, it is a propitious time for the far-thinking members of the current leadership to join forces with the opposition on the basis of purely political, rather than clan-based interests. But the authors admit that there is little chance of that happening, given the absence of competing national ideologies that could inspire and mobilize an electorate that, for the most part, is accustomed to relying on the country's rulers to provide for its needs, and thus fears radical change. (Liz Fuller)

AZERBAIJANI PRESIDENTIAL ELECTION UPDATE. The date for persons whose nomination as a candidate for the 15 October presidential election to submit to the Central Election Commission (CEC) the minimum 45,000 signatures required in their support expired at 6 p.m. Baku time on 6 August. By that date, 18 of the 19 candidates whose nomination was approved by the CEC managed to do so; the only one who failed was the Namus Party's Togrul Ibragimli. Shadman Guseinov, who submitted the required signatures on 4 August, died of a heart attack the following day (see "RFE/RL Newsline," 6 August 2003).

To date, the CEC has verified the authenticity of the signatures submitted by, and confirmed the registration of, the following five candidates:

* President Heidar Aliev

* Prime Minister Ilham Aliev

* Opposition Musavat party Chairman Isa Gambar

* Abutalib Samedov, chairman of the pro-presidential Alliance for Azerbaijan

* Gudrat Gasankuliev, leader of a pro-presidential splinter group that split from the Azerbaijan Popular Front Party

In addition, a further 11 candidates have submitted signatures that still have to be verified. They are:

* Chingiz Sadykhov, chairman of the Taraggi (Progress) party

* Sabir Tanriverdiev, chairman of the National Statehood party

* Elshad Musaev, nominated by the Great Azerbaijan voters' group

* Araz Alizade, co-chairman of the Social-Democratic Party

* Tair Kerimli, Vahdat party leader

* Hafiz Hadjiev, chairman of the pro-presidential Modern Musavat party

* Yunus Oguz, chairman of the Unity Party

* Ilyas Ismailov, Adalet party chairman

* Ali Kerimli, chairman of the progressive wing of the opposition Azerbaijan Popular Front Party

* Etibar Mamedov, chairman of the Azerbaijan National Independence Party

* Lala Shovket Gadjieva, nominated by a group of citizens

NEXT IMF LOAN TO ARMENIA CONDITIONAL ON FURTHER TAX REFORM. The International Monetary Fund said on 6 August that the release of its next $13 million loan tranche to Armenia is conditional on more government efforts to address "significant shortcomings" in the collection of taxes and customs duties.

While praising the country's "strong" macroeconomic performance this year, the IMF said it has not yet reached agreement with the Armenian government on the terms for the disbursement of the fifth installment of its $95 million Poverty Reduction and Growth Facility (PRGF), a three-year lending program launched in May 2001.

"Discussions will continue during the next few weeks on measures to improve tax administration, remove exemptions, and increase tax collection in 2004," the fund's Yerevan office said in a statement. "Once understandings have been reached, the IMF Executive Board will consider...allowing Armenia access to the fifth tranche under the PRGF arrangement equivalent to about 13 million."

The statement followed two weeks of talks in Yerevan last month between senior Armenian officials and a visiting IMF mission. It said that although the two sides reached "understandings" on several policy areas, the Armenian authorities should do more to improve tax collection and ensure equal treatment for all taxpayers.

The amount of taxes and import fees collected by the government has increased steadily in recent years. Still, it totaled a modest 198 billion drams ($341 million) or about 15 percent of the gross domestic product in 2002. That proportion is low even by ex-Soviet standards, and reflects the widespread tax evasion that takes place in Armenia.

The government intends to raise revenues to 287 billion drams this year and says it is on track to meet the target, helped by a continuing robust economic growth, which hit 14.8 percent in the first half of 2003. But the IMF believes that while the government has improved the administration of the vital value-added tax, its proceeds from the corporate profit tax remain "weak." It wants the elimination of some tax exemptions that "create distortions in the economy and hinder the efficiency of the tax system."

"The authorities stated their intention to move decisively in this area to ensure uniformity of treatment among taxpayers and harness efficiency gains," the IMF statement said. They also promised to unveil their strategy for reducing poverty and widespread government corruption later this year, it said.

The drawing up of a comprehensive anticorruption plan is also one of the key conditions for the release of the second half of a $40 million loan by the World Bank, which is due to cover a large part of Armenia's 2003 budget deficit. The bank's representative in Yerevan, Roger Robinson, told RFE/RL last week that the authorities must also improve the investment climate and amend the banking and labor legislation.

Unlike the World Bank loan, the IMF money is designed to shore up the hard currency reserves of the Armenian Central Bank and thereby sustain the relatively stable exchange rate of the national currency. Armenia has received four PRGF tranches worth approximately $53 million over the past two years. (Emil Danielyan)

QUOTATION OF THE WEEK. "Georgia cannot import electricity by the basket-load from Washington." -- Anatolii Chubais, chairman of Russia's Unified Energy Systems, commenting in Tbilisi on 6 August on his company's acquisition of a controlling stake in a Georgian energy distribution network (quoted by Caucasus Press).