The Struggle for Freedom: An Azerbaijani economist who stands up to Aliyev’s kleptocracy

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Ellen Bork
George W. Bush Institute

Gubad Ibadoghlu, an Azerbaijani economist critical of President Ilham Aliyev’s repressive, kleptocratic rule was arrested on July 23 outside Baku. Ibadoghlu, a visiting scholar at the London School of Economics, and his wife were beaten and detained while on a visit to Azerbaijan to see Ibadoghlu’s elderly mother.   

Ms. Bayramli was released, but Ibadoghlu faces trial on charges brought after police claimed they found counterfeit funds and evidence linking him to “extremists” at the Economic Research Center of Azerbaijan, which Mr. Ibadoghlu previously ran. Rights groups and others familiar with Azerbaijan’s judicial system dismissed the charges as fabricated. Ibadoghlu’s pretrial detention was extended to February 2024.   

Azerbaijan’s justice system hasn’t changed since it was a Soviet republic, Richard Kauzlarich, who served as the U.S. ambassador to Baku after Azerbaijan gained independence in 1991, told me. 

“They are still Soviet in their approach to planting evidence and concocting witnesses, all the normal things” required for building a prosecution, “except that it’s all made up,” he said. 

Aliyev routinely locks up his critics, but Ibadoghlu poses a particular challenge to his kleptocratic rule. A few weeks before returning to Azerbaijan in July, Ibadoghlu helped launch the Azerbaijani Youth Educational Foundation in the United Kingdom. The foundation’s mission is to develop the next generation of Azerbaijani professionals through supporting their study abroad. Ibadoghlu hopes the project will be funded in part by assets U.K. authorities seized after the exposure of a $2.9 billion scheme to launder money and buy influence, nicknamed the “Azerbaijan Laundromat.”  

The success of Ibadoghlu’s project would be a serious blow to Aliyev, bringing renewed attention to Aliyev’s money and reputation laundering in the West and setting a precedent for using seized stolen funds to benefit Azerbaijanis instead of the regime’s top leadership and cronies. The United States should embrace the project and press for Ibadoghlu’s release when it hosts a major anti-corruption conference in Atlanta in December.       

Trying to lay a foundation for Azerbaijan’s development 

Ibadoghlu, 52, was raised in Soviet Azerbaijan by a language teacher mother and a father who was denied a university post in biology after refusing to join the communist party, Ibadoghlu’s son Emin told me.  

He earned advanced degrees in economics and political economy during the decade after the breakup of the Soviet Union. At the time, Azerbaijan’s enormous oil and gas reserves held out the promise of economic development, but the country lacked the political institutions and legal framework to support it. Ibadoghlu went to work teaching, researching, and consulting on a wide range of subjects, including Azerbaijan’s transition from a Soviet command economy, transparency in the state oil fund, and the importance of democratic values in higher education.     

Meanwhile, under Aliyev, Azerbaijan became one of the most corrupt dictatorships in the world. He succeeded his father, Heydar, who ruled the country from 1993 to 2003, after heading the Azerbaijani KGB, the secret police and intelligence agency during the Soviet period.  

Under Aliyev, elections are rigged, sometimes comically so. In 2013, the Washington Post reported that the ruling party had inadvertently released vote tallies before the polls opened. In 2018, Aliyev abruptly brought the presidential election forward seven months, removing any semblance of a campaign. Even after the opposition decided to boycott the polls, the regime’s electoral machine engaged in widespread fraud. The next election, scheduled for 2025, promises more of the same. Opposition parties face tough new hurdles to function and may be forced to disband. Ibadoghlu has tried six times to register the Democracy and Prosperity Party, which he chairs.  

On the 20th anniversary of Azerbaijan’s state oil fund, in 2019, Ibadoghlu concluded, “there is nothing to celebrate: Despite huge spending, the country’s role as an economic leader in the region is declining and people are suffering from poverty and poor social services. Oil and gas revenues have brought neither improved welfare nor democracy to Azerbaijan.” 

The transnational impact of kleptocracy 

 Although Azerbaijan is often overshadowed by the threats from its neighbors, Russia and Iran, Aliyev’s kleptocracy is particularly insidious.  

“Corrupt autocrats like Aliyev recognize rule-of-law societies in the West as safe places to launder and hide dirty money,” Jessica Ludwig, an expert on kleptocracy and Director of Freedom and Democracy at the George W. Bush Institute, told me. “Left unchecked, these kleptocrats will corrupt our financial systems, our real estate markets, and even our political process.”   

 Aliyev has also been effective at laundering his reputation through gaining Azerbaijan’s acceptance in Western institutions. With the help of “caviar diplomacy” – i.e., travel, gifts and bribes, as well as lobbying contracts, Aliyev has been able to advance an alternate reality in which Azerbaijan has no political prisoners, respects civil society, permits a free internet and political opposition.  

 In 2014, Aliyev answered a question about political prisoners held by Azerbaijan at a press conference with the secretary general of NATO by saying that “Azerbaijan is a member of the Council of Europe for more than 10 years. We are members of the European Court of Human Rights. And, a priori, there cannot be political prisoners in our country.” Azerbaijan maintains a partnership with NATO.  

Azerbaijan’s efforts to win influence abroad are a family affair. Aliyev’s sister-in-law, Nargiz Pashayeva, sits on the board of the Central Asian studies center at Oxford University. According to Suzanne Antelme, Editor in Chief of Cherwell, the school’s oldest student publication, the Oxford Nizami Ganjavi Centre (ONGC) refuses to identify the donor behind a $12.4 million contribution, although it has acknowledged the donation’s connection to a charity, now defunct, which Professor Pashayeva previously chaired. ONGC has remained silent about Ibadoghlu’s persecution, despite a request from his family.   

Aliyev is not above using more forceful methods to shape perceptions of his rule by silencing Azerbaijani dissidents in the West. The State Department’s 2022 human rights report cited violent attacks, digital surveillance, and threats against Azerbaijani dissidents in France, Germany, and Switzerland.    

Ibadoghlu’s needs American action urgently 

Help for Ibadoghlu can’t come too soon. In prison, Ibadoghlu, is receiving at best inexpert and at worst lethal medical treatment, according to his son. Emin told me his father, who is severely diabetic, is being given dangerously high doses of insulin, has lost most of his vision, and can’t walk.  The approaching winter is a perilous time for political prisoners, as flu and other illnesses spread within prisons. Emin believes the regime is using his father as “a scarecrow” to frighten others: “They are saying, ‘We don’t care where you work, what country welcomes you. We will take you to the brink of death.’”   

U.S. should shift policy priorities and support Ibadoghlu  

The United States has publicly sanctioned an Azerbaijani official for corruption or human rights abuses only once, in 2022, when an official in the Ministry of Internal Affairs was sanctioned for torturing detainees in 2015 and 2016. Democracy and human rights have taken a back seat to other U.S. priorities, such as a peaceful resolution of the long-running conflict over ethnically Armenian Nagorno Karabakh, and access to Azerbaijan’s oil and gas reserves.  

However, these issues are losing salience. Azerbaijan’s armed forces took over Nagorno Karabakh in September, forcing more than 100,000 Armenians to flee. As for oil, “energy is not the priority it was once was,” Kauzlarich told me. In the 1990s, Azerbaijan seemed “like the new Kuwait, but today Azerbaijan is a declining producer and major American companies have pulled out.”   

 As these issues fade, the U.S. should make kleptocracy a higher policy priority. The Biden Administration launched an anti-corruption strategy in December 2021. In it, the administration pledged, among other things, to “empower those, including activists, investigative journalists, and law enforcement on the front lines of exposing corrupt acts.” The administration should also press for the release of Ulvi Hasanli and Sevinc Vaqifqizi, respectively the director and chief editor of Abzas Media who were arrested on Nov. 20 in a crackdown on the independent media outlet which has recently reported on business interests of the Aliyev family. 

 Ibadoghlu’s release should be a top agenda item when the United States hosts the 10th Conference of State Parties on the U.N. Convention Against Corruption in Atlanta in December 2023, Ludwig said. The administration should also embrace support for Ibadoghlu’s project to educate young Azerbaijanis in economics, democracy, and the rule of law using funds confiscated from Azerbaijan.