This summer Azerbaijan was active in the international arena. The country’s delegation attended the first Caspian Economic Forum, Iran and Azerbaijan decided to create a joint industrialized zone to boost the trade between the two countries. Domestic agenda of Azerbaijan was dominated by the new charges of tax evasion that were brought against famous journalist Khadija Ismayilova. State Statistic Committee of Azerbaijan and independent think tank the Center for Economic and Social Development reported main economic indicators of the country in the first half of 2019.
DOMESTIC POLICY
New charges for Khadija Ismayilova
Khadija İsmayılova, award-winning journalist, reporter, and former Radio Free Europe/Radio Liberty Azerbaijani Service’s Baku bureau chief, faced charges of tax evasion from Azerbaijan’s Supreme Court in early August.
Previously she reported high-level corruption and secret financial links in different industries of the country. Furthermore, Ms Ismayilova uncovered property holdings which belong to government officials. After being arrested in 2014 and spending 583 days in prison, she was released in 2016 thanks to the international pressure from human rights organizations. However, she is still not allowed to move around the country and her assets and bank accounts have been frozen.
The new charge of tax evasion states that Ms Ismayilova needs to pay taxes for Radio Free Europe/Radio Liberty, which is a non-profit organisation. “Another conviction that I have is illegal entrepreneurship. The government says that since I don’t have international accreditation in Azerbaijan’s foreign ministry, all the money I earn from foreign media is illegal,” stated Ms Ismayilova.
Karin Deutsch Karlekar, director of Free Expression at Risk Programs at PEN America said that “For more than three years since her release from prison, Khadija has been subject to surveillance, a travel ban, financial restrictions, and other forms of harassment intended to intimidate her into silence. We call on authorities to drop these ridiculous charges and allow Khadija full freedom of movement and the ability to continue her work freely”.
Freedom House has published a press-release that condemns the Supreme Court’s decision. “This decision should be immediately overturned, the charges should be dropped, the travel ban imposed on her should be lifted, and her bank accounts should be unfrozen,” said Marc Behrendt, director for Europe and Eurasia programs at Freedom House.
ECONOMY
Economy in the first half of 2019
According to the State Statistic Committee of Azerbaijan, the country’s GDP increased by 2.4% in comparison to the same period of previous year and amounted to 37825.2 million manats (about $22184,87 mn) in the first half of 2019. The GDP growth in oil-gas and non-oil and gas sectors was 1.3% and 3.2% respectively.
Furthermore, the inflation rate for the first six months was 2.7% according to the Statistic Committee; however, a report published by Center for Economic and Social Development indicates that the inflation rate was 7.3%.
Moreover, an international rating agency Moody’s Investor Service’s has changed the outlook on Azerbaijan’s banking system from “stable” to “positive”. Starting from 2015 the outlook had been “negative” till last year’s August. On introducing measures to solve issues related to problem loans and restoration of banks’ profitability, Moody’s changed the outlook from “negative” to “stable” last year. This year’s report was published in July and presented expectations from the banking system for the next 12-18 months. According to the report, the main factors leading to the positive change were “continuous economic growth and unprecedented state support for households”. Furthermore, the report predicted 3% economic growth and 10% decrease in the amount of problem loans in 2019-2020.
FOREIGN POLICY
The first Caspian Economic Forum
Azerbaijani delegation led by country’s Prime Minister Novruz Mammadov participated in the first Caspian Economic Forum hosted by Turkmenistan in mid-August. Five countries located on the borders of the Caspian Sea gathered and discussed the legal status of the sea and future possibilities for economic development. Russian Prime Minister Dmitry Medvedev, Iranian Vice President Eshaq Jahangiri and Kazakh Prime Minister Askar Mamin were among the other representatives. The President of Turkmenistan, Gurbanguly Berdimuhamedow and the Prime Ministers of the other four countries discussed the importance of the Caspian Sea region in the international arena, expanding integration and interaction of countries’ economies, future opportunities for investment projects and simplification of visa regime.
Last year Russia, Iran, Azerbaijan, Turkmenistan and Kazakhstan signed a convention on how to divide territorial waters and fishing zone. However, the division of seabed rich in hydrocarbon resources was not agreed upon. Furthermore, two of the countries, Russia and Iran have not yet ratified the above-mentioned agreement. Since Azerbaijan and Turkmenistan have not agreed about the seabed division, the progress of Trans-Caspian natural gas pipeline has been delayed as well.
Joint Industrialized Area with Iran
Trying to decrease its oil dependency, Azerbaijan has cooperated with Iran in order to create a joint industrial zone. “This will create favorable conditions for the further development of the non-oil sector in both countries,” said Mohsen Salehinia, Iranian Deputy Minister of Industry in the opening ceremony of the new industrialized zone in Iran.
Farhad Dejpasand, Iranian Minister of Economic Affairs and Finance has also stated that Iran is interested in developing relations in the insurance sector and two countries have already agreed to create a joint investment fund. This fund will facilitate the cooperation among entrepreneurs and companies of the countries. Trading volume between Azerbaijan and Iran has reached about $440 million and is expected to exceed $600 million.
