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Waving The Banner Of Azerbaijan's New Oil Boom

Azerbaijani oil rigs in the Caspian Sea
Azerbaijani oil rigs in the Caspian Sea
Winston Churchill once said that "If oil is a queen, then Baku is her throne." Azerbaijan's oil wealth has a long and storied history. But its oil industry was born in the late 19th century. Initially dominated by British, Dutch, Swedish, and Russian companies, it later became a center of Soviet might. Azerbaijani oil fuelled Soviet tanks and aircraft during World War II and sated the domestic needs of the Soviet Union for decades.

Today, however, 20 years after Azerbaijan gained its independence, the country is experiencing a second oil boom. Only this time, Azerbaijan is in charge of its natural resources, and Azerbaijani citizens are reaping the benefits.

Oil To Education

The foundation of this boom was laid in 1994 when, despite resistance from many quarters Azerbaijan, managed to sign the "contract of the century" with leading oil companies. This document enabled the start of construction of the Baku-Tbilisi-Ceyhan (BTC) oil pipeline in 2000.

This second oil boom has changed the geopolitical and geoeconomic situation in the South Caucasus. After the (BTC) oil pipeline, the Baku-Tbilisi-Erzurum gas pipeline was laid. Now the Baku-Tbilisi-Kars railway, which will link China and Paris, is under construction. In terms of geopolitics, these projects open new opportunities for Euro-Atlantic integration. In terms of geoeconomics, they strengthen globalization, bringing continents closer and improving Europe's energy security.

The South Caucasus region has been engulfed in the flames of ethno-political confrontation and interstate conflict for the past 20 years. Foreign-policy clashes can easily sink economic stability. Development policies in such a complex geopolitical situation, even with the help of petrodollars, do not always yield positive results.

It is important for Azerbaijan to transform its "black gold" into intellectual potential. Therefore, 5,000 young Azerbaijanis will be sent to study abroad between now and 2015 under a decree by President Ilham Aliyev. Public democratization and economic transformation begin with public awareness, and this understanding shapes the agenda of Azerbaijan's government.

Building democracy is a gradual process, and it must be considered in parallel with political and economic reforms. Former U.S. President Franklin Roosevelt's statement that "misery and freedom are incompatible" sums up the challenge that Azerbaijan faced a decade ago. Over recent years, a great deal of effort and energy has gone into making the Azerbaijani citizen financially independent.


The country has been strengthened economically. In the past six to seven years, the poverty rate has been brought down from 49 percent to 11 percent. More than 900,000 new jobs have been created, 600,000 of them permanent. And some 5,000 new enterprises have started up.

Azerbaijan does not spend its petrodollars on increasing wages or social benefits that could lead to serious inflationary consequences. In the nearest future, Azerbaijan will become an international aid donor.

This is just a short list of the prospects that have been opened up by the second oil boom. These are not just words, but a record of real action.

Recently, the world's biggest flag (70 by 35 meters) was raised on the world's tallest unsupported flagpole (162 meters) in Baku. This is not only a sign of our economic strength, which allows us to implement such projects. This is neo-Azerbaijanism, which is present in the country's new politics, economy, and socio-cultural life. The world's tallest flagpole symbolizes a new understanding of the inner spirit and power of our national identity and a reassessment of Azerbaijan's place in the global context. Today it is clear that we are no longer just a bridge. From now on, we are a center of regional politics -- and this will form the basis of Azerbaijan's foreign policy for the coming decades.

Elnur Aslanov is chief of the Political Analyses and Information Support Department at the Office of the President of Azerbaijan and the author of "Globalization And National Development Strategy" (2006). The views expressed in this commentary are the author's own and do not necessarily reflect those of RFE/RL