150 KM – BIBI HEYBAT, AZERBAIJAN
It is now punishingly hot as we drink more tea and think of those Zoroastrian pilgrims, headed for Baku by ship and camel train. Suddenly, out of nowhere, comes the thundering sound of a helicopter heading towards the horizon and the platforms of ACG.
The final stretch of our journey by boat into Baki Buktasi would bring us past the shallow-water oil structures of Dash Zina, built in the early 1950s – a maze of pipelines, pump stations and drilling towers on wooden stilts, stretching far out into the sea. As we entered the final tack towards this Baku dockside, to our west we would see the headland of Bibi Heybat.
In 1848 the world’s first mechanically drilled oil well was sunk on this rocky shore, in what was then the Transcaucasian province of the Russian Empire. It was eleven years before Colonel Drake drilled for oil in Pennsylvania, although Drake is now claimed to have begun the Oil Age. Despite the head start, Azerbaijan is eclipsed in industrial history by the US, in part because allocation of capital for exploration was slow. Development accelerated after December 1872, when Tsar Alexander II ordered oil-bearing land to be auctioned off to entrepreneurs and investors. The declaration marked the arrival of finance capital.
Five technologies transformed Baku: drilling, which enabled wells to be sunk far deeper than anything dug by hand; refining, which created a fuel for lighting called kerosene; and, most importantly, the oil tanker, the railway and the pipeline, which enabled the distribution of vast quantities of crude and refined products. To generate profit, markets needed to be created for the sale of kerosene, of oil as a source of light. Across the world, in cities, towns and villages, from London to Shanghai, kerosene was promoted as the wonder fuel of the hurricane lamp. Replacing whale blubber, distilled alcohol and tallow, a global product had been created.
After the auctioning of the Tsar’s land there was frenzied speculation. Hundreds of oil derricks were constructed on the hills around Baku. Steam-driven drilling wells quickly proliferated. The toxic fumes from a multitude of small refineries were so polluting that the Baku authorities decreed that all the plants should be gathered in a new suburb east of the city that became known as Black Town.
To a city of merchants, craftsmen and labourers came a new industrial class of oil workers – peasants who had only recently been released from serfdom on the land.16 To the new streets of the Outer Town, built around the Old City, came Russians, Jews, Georgians, Armenians and ‘Tartars’ – as Muslim Azeri-speakers were then labelled.17 The population quadrupled in a decade.
In the late nineteenth century Baku became one of the great multicultural melting pots of the world economy. A visitor from Britain was struck by the vibrancy of the place, and wrote at the time: ‘One might almost fancy oneself in an American city out west. There is the same air of newness about everyone, the same sanguine atmosphere. Everyone is hopeful.’ 18
From the city arose another new class – the plutocracy of the Oil Barons, who quickly acquired staggering wealth, expressed in mansions built in the Outer Town in a myriad of styles: Arabic, Byzantine, Venetian and Gothic. Many of the Oil Barons were incomers like Ludvig Nobel, but among them were locals, the most famous of whom was Haji Zeynalabin Taghiyev. Born in Baku in 1823, the son of an illiterate shoemaker, Taghiyev initially worked as a stonemason, and slowly moved into trading. In the December 1872 auction he managed to obtain leases on land at the village of Bibi Heybat, considered to be of little oil value.
Fourteen years of futile prospecting followed, during which Taghiyev’s Armenian co-investor sold out, but on 27 September 1886 a gusher burst seventy metres into the air. A Baku newspaper described the resulting rain and rivers of crude: ‘A colossal pillar of smoke, from the crest of which clouds of oil sand detached themselves and floated away a great distance without touching the ground . . . Most of this was lost for want of storage accommodation. The oil simply poured into the Caspian Sea, and was lost forever to mankind.’19
Taghiyev became one of Baku’s wealthiest citizens, investing profits in a fleet of tankers and barges to take oil north across the Caspian and up the River Volga to Moscow. He built himself a fifty-room mansion in the Outer Town and developed a resort for the rich away from the city at the village of Mardakan, on the north-eastern shore of the Absheron Peninsula.
With his capital he financed the opening of a school of agriculture and an opera house modelled on the Casino et les Jardins in Monte Carlo.20 Despite his background of limited education, he persuaded Tsar Nicholas II to allow the foundation of a secular girls’ school, one of the first in the Muslim World. In all these acts Taghiyev was creating a culture of a new Russian–Tartar haute bourgeoisie, developing a vision of a new city. Baku was beginning to resemble the metropolises to which its resource was now marketed – the Belle Epoque cities of European Russia and Western Europe.
160 KM – BAKU, AZERBAIJAN
We hear music coming from the trees beyond the café. So we fold the maps and wander over to discover a band of four players seated under a clump of Corsican Pines. One man plays a saz, a long-necked lute, while another holds an electric Yamaha keyboard that drones beneath the melody. We sit mesmerised for an hour. The band pays little regard to any audience – and indeed there is no real audience, just people drinking tea and playing nard, a Persian game similar to backgammon. At the water’s edge, fishermen watch their rods and lines. Nothing stirs and the sea seems heavy, viscous, the surface covered in a petroleum sheen. The heat is passing on our first day of acclimatising ourselves to the Caspian shore, and we begin to prepare to walk through the town.
As we turn our backs to the water, we can survey the city laid out on gently rising ground. Baku itself, with a population of nearly 2 million, feels quiet. A rocky bluff overshadows the İçәri Şәhәr, the Old City, and the nineteenth-century grid of streets that spreads out from it, the Outer Town. As within a tree, the rings of the city show the growth of Baku: the Persian core, the Tsarist town, the early Soviet and the late Soviet city, punctuated everywhere by the recent towers of the new capitalist metropolis. The crags in the distance speak of the desert that lies beyond, stretching out south, north and west.
2 YOU CAN SEE WHERE THE PRESIDENT GETS HIS IRON GLOVES
Neftçilәr Prospekti, Baku, Azerbaijan
‘Emporio Armani.’ ‘Dior.’ ‘Bulgari.’ ‘D&G.’ ‘Versace.’ We count off the fashion stores along Neftçhilәr Prospekti – ‘Oil Workers Avenue’. Facing out to sea, the grand nineteenth-century mansions have all had their façades scrubbed. Ground floors glisten with plate-glass windows. We’ve walked this street many times in the past decade, and the change is astounding. From a dusty post-Soviet boulevard, it has become the very image of a twenty-first-century oil-rush city.
Construction is underway everywhere: new shopping malls alongside hotels and luxury flats. Billboards promising a transformation into Dubai surround cranes and open craters. A new Hilton is coming, and soon after a Four Seasons. Mercedes and Porsche SUVs, black with tinted windows, cruise the avenue.
Through an underpass of polished stone that leads to pavements embedded with bright ribbons of lights, we make our way into the body of Baku. Down another street of pristine shop fronts we come to a square where, under the shade of trees, refurbished fountains play in the floodlights. Even now, beyond midnight, well-dressed families and young couples relax in the bars and cafés of Fәvvarәlәr Meydan, ‘Fountain Square’. The tables on the pavements are full, and children hurtle across the piazza on tiny electric-powered quad bikes.
At the double Şamaxi Gate in the city wall, we are about enter the İçәri Şәhәr, the Old Town. The sandstone archway brings to mind a passage from Ali and Nino, the novel by Kurban Said set in Baku before World War I:
I went up to the flat roof of the house. From there I could see my world, the massive wall of the town’s fortress and the ruins of the palace, Arab inscriptions at the gate. Through the labyrinth of streets camels were walking, their ankles so delicate t
hat I want to caress them. In front of me rose the squat Maiden’s Tower, surrounded by legends and tourist guides. And behind the tower the sea began, utterly faceless, leaden, unfathomable, the Caspian Sea, and beyond the desert – jagged rocks and scrub: still, mute, unconquerable, the most beautiful landscape in the world.1
The book was published in Vienna in the 1930s, and it is filled with nostalgia for a Persian Baku which was by then rapidly being rebuilt as a Soviet city.2
We enter the citadel, and even here, amid the narrow passages, construction is underway. Despite this quarter’s UNESCO status, hotels are rising on fourteenth-century foundations. The winding streets take us back to the seafront and Neftchilәr Prospekti. Past the yacht club and the empty marina, we reach a large hole in the ground surrounded by fencing, jutting out into the sea. Posters on billboards portray the forthcoming $250 million Full Moon Hotel like a futuristic skyscraper on the Persian Gulf. Just inland stand the Sports Palace and the Dalga Plaza Business Centre. The latter’s twelve floors of glass rise above the busy street, with ornamental white marble pillars reaching halfway up the building. The owners of the tower proudly announce on their promotions that ‘during dark time of days the building looks especially majestic’, and that this office block ‘makes the President proud’.
The tower is the headquarters of SOFAZ, the State Oil Fund of Azerbaijan. This national revenue fund receives much of Azerbaijan’s hydrocarbon income, and was established to save the wealth for future generations while ‘sterilising’ investment so that the local economy would not overheat. In theory, revenues from Azeri oil sold today are invested in assets abroad, and the income from these investments will be spent later – gradually – on programmes that diversify the economy and increase development. SOFAZ has made substantial purchases of property and equities in countries such as Germany.3 But things are not what they seem. In 2010, income to SOFAZ was $7.2 billion. However, predicted expenditure was $6.6 billion, leaving less than 10 per cent of the income to be salted away for future generations. Of that planned expenditure, 80 per cent is allocated for government spending, covering items such as the military, the police and the construction boom.4
Although analysts were initially optimistic that it would be well managed, they soon started to recognise that the establishment of the Oil Fund might have been ‘designed only for external political consumption – particularly for claiming fiscal responsibility and spending transparency’.5
While SOFAZ is the administrative centre for the oil revenues, the fundamental decisions about what income to keep for the future and what to spend on the present are not made in this building. We cross the road and peer through the railings of a park in which lie the Gulustan Palace and the Presidential Palace, the latter presenting a great white stone façade punctuated by over 300 windows. This is where the real power over the oil wealth is located – in the hands of the Aliyev dynasty.
Heydar Aliyev was born in Naxçivan, a mountainous, semi-autonomous region in south-west Azerbaijan, beyond the disputed Nagorno-Karabakh. In 1939, at the age of sixteen, he arrived in Baku to study at the Oil Academy.6 This was the main academic institute in one of the Soviet Union’s most modern cities, where workers on the drilling rigs were hailed as heroes of socialist labour. When the Nazis invaded the USSR two years later, Aliyev avoided being sent to the front by becoming a lieutenant in the NKVD, the Soviet internal security apparatus and the force behind Stalin’s Great Terror. Towards the end of the war, and in the following years, the Terror included the mass deportations of Pontic Greeks, Chechens and Meshkheti Turks from the Caucasus.7 Only with Stalin’s death, in March 1953, did the Terror grind to a halt.
Despite Khrushchev’s ‘de-Stalinisation’ process, Aliyev’s rise in the now-renamed KGB was not slowed.8 By 1967 he was head of the Azeri KGB, and two years later the USSR’s general secretary, Leonid Brezhnev, appointed him head of the Communist Party of Azerbaijan, the most senior Soviet official in the state. Having reached the pinnacle of power in his home country, he quickly purged the ranks of government and academia, sacking six of his seven ministers. Claiming these as anti-corruption measures, Aliyev replaced those fired with allies from Naxçivan and the KGB. The boy from the mountains was to remain the most powerful man in Azerbaijan for the better part of the next thirty-four years.
Persistent allegations of corruption emerged, but supporters would allow no discussion. When the Azeri prosecutor Gamabai Mamedov raised concerns in parliament, he was shouted down: ‘Who are you speaking against? If you believe in God, you might say that before us stands God himself in the person of [Aliyev].’9 Evidence was suppressed, the prosecutor fled to Leningrad, and in 1982 Aliyev was promoted to join the Politburo of the Soviet Union.
Aliyev aspired to be general secretary of the USSR, but he was denounced in the Moscow press as exemplifying corruption, on account of his close connections to what were known as ‘the oil mafia’ and ‘the caviar mafia’, and because of stories of his giving Brezhnev a bejewelled sword and a huge ring embedded with precious stones. He was ejected from the Politburo as an anti-Glasnost hardliner, opposed to Mikhail Gorbachev’s socialist reform movement. In 1987 he was stripped of his position in the Central Committee and his Moscow dacha.
Recognising the changing times, Aliyev shifted direction. In the days following the 1990 Black January massacre in Baku of over a hundred Azeri civilians, he publicly denounced the Soviet forces, and told reporters: ‘The absolute majority of the population is behind the Popular Front.’10 It was a remarkable statement for someone so recently at the pinnacle of Soviet power, and marked his transition to becoming an anti-Soviet nationalist. In retrospect Aliyev’s very dismissal from the politburo ultimately enabled him to sidestep the turbulent first years of Azeri independence, returning to power in Baku only three years later with his KGB networks intact.11
In the spring of 2009, we are standing as close as we can to the Presidential Residence, from which the eighty-year-old Aliyev ruled up until shortly before his death in December 2003. For six decades his career had been intertwined with the politics of this oil province, and he was an undisputed architect of the Oil Road.
James was here before, in 1998, five years after Aliyev had taken up residence. Wandering nearby armed with a camera, he was foolishly trying to capture the view over the wide Baki Buxtasi. Predictably enough, two presidential guards appeared, guns at the ready, and he was frogmarched to the basement of the Residence. After long, nervous hours and the gutting of his pre-digital camera, James was ejected into the anxious night.
THE OIL ACADEMY, BAKU, AZERBAIJAN
When Heydar Aliyev withdrew from the 2003 presidential elections due to ill health, few doubted that his family would ensure power remained within the clan, but there was some hope that his son, Ilham, would be a reformer. As expected, Ilham Aliyev won 76.8 per cent of the votes, but the elections were widely recognised as fraudulent and were followed by mass arrests and repression of journalists.12
Despite the crackdown, the opposition continued to organise against the regime. With increased international attention on Azerbaijan accompanying the launch of the export pipeline, a demonstration was called for 21 May 2005. The mayor of Baku refused permission for the protest, claiming that it ‘would interfere with preparations for the official opening ceremony of the Baku–Tbilisi–Ceyhan oil pipeline, which will take place on 25 May’.13 Police raided homes and rounded up forty opposition leaders, and although the organisers boldly pronounced that thousands would attend the rally, privately they knew that most people would be too frightened to participate.14
In this context, the fact that people turned out at all was astonishing. Several hundred protestors gathered between the Oil Academy, where the older Aliyev had once studied, and the Kappelhaus, the German Cultural Centre. Mostly middle-aged men and women, they represented the opposition Musavat Party, the Popular Front, and the Democratic Party. We have come to where they gathered, and look along the street that they had intend
ed to march down, six blocks of 28th May Street and Bulbul Prospekti.
Few could have believed that they would make it far, as armoured trucks blocked their route and a dense formation of black-clad riot police and Ministry of Interior troops encircled the crowd at a distance. Nobody moved. Then a chant started up: ‘Free elections! Free elections!’ At once the tight phalanxes of police charged, batons banging on shields to create a deafening din. As the two groups collided, the crunch of truncheons on bodies and the sound of screaming spread fear and panic through the crowd. Caught on all sides, those who fell were bludgeoned and kicked. The protest leaders were cornered, beaten and hauled off. Others who managed to escape into side-streets were flushed out with water-cannons and imprisoned.
Soon the space that we stand in was empty of life. The unconscious bodies of two women lay where they had fallen, alongside a ripped flag. Abandoned shoes, torn hats and smashed placards littered the concrete; this street was spattered with blood.
Despite the demonstration taking place fifty kilometres from the Sangachal Terminal – the nearest point that the pipeline comes to Baku – the BBC accepted the regime’s description of the events when covering the celebrations at the opening of BTC four days later. The British broadcaster explained: ‘Some demonstrators were beaten and arrested last Saturday, with Azeri authorities saying that they acted because the protest was too close to the pipeline.’15
ISTIGLALIYYAT STREET, BAKU, AZERBAIJAN
We are climbing up a wide, dilapidated staircase. Not more than a few hundred metres from the Presidential Palace, this dusty Belle Epoque brick building is the address we have for Arzu Abdullayeva. Active in Azerbaijan’s Social Democratic movement throughout the late 1980s and 1990s, Arzu opposed both Soviet rule and the newly created nationalist parties. Since the Aliyevs’ return to power she has been a staunch campaigner for human rights, and is co-chair of the International Helsinki Citizens’ Assembly. We have come to get an update on the current levels of repression, and to discuss how oil helps the Aliyevs stay in control.
The Oil Road Page 4
