Oksan Bayulgen

Facing the dilemma of global capitalism: the case of Azerbaijan

Since the collapse of the Soviet Union, the former Soviet republics have been striving to become part of the global economy as new sovereign states. Among these states, Azerbaijan’s performance in terms of attracting foreign investment has been the most impressive. According to UN World Investment Report 2002, on the foreign direct investment (FDI) performance index, out of 140 countries, Azerbaijan ranked third highest from 1994 to 1996 and eighth highest from 1998 to 2000. Since the ‘Contract of the Century’ in September 1994, Azerbaijan signed oil contracts valued at US

Vetoing the future: political constraints and renewable energy

60 billion dollars with 33 companies from 15 countries around the world. Actual foreign capital invested in the oil sector in this period has been over US

Giving Credit Where Credit Is Due: Can Access to Credit Be Justified as a New Economic Right?

4 billion. Fueled by these contracts, the country began a period of steady growth in the latter half of the decade. Azerbaijan’s real GDP rose by almost 6% in 1997, 10% in 1998, 7% in 1999,11.4% in 2000 and 9.1% in 2001. Moreover, the decline trend in oil production since the collapse of the Soviet Union was reversed by an increase from 180,000 barrels/day in 1998 to 310,000 in 2002. The oil industry currently accounts for 70–80% of total foreign investment and 85% of Azerbaijan’s exports. Oil-related revenues make up nearly 50% of budget revenues. Today, Azerbaijan is hailed as the Former Soviet Union’s ‘showcase’ for the art of doing business, the ‘frontier of global capitalism’ and a ‘united nations of oil’. This study analyses the sources and consequences of Azerbaijani success in attracting foreign investment. I argue that in addition to the commercial and geostrategic attractiveness of the Caspian energy resources, the attractive investment environment made possible by the authoritarian regime explains the ability to attract foreign capital in the oil sector. This relationship between the political regime and foreign investment in Azerbaijan supports the long-studied affinity between oil and authoritarianism. Moreover, this study has implications for other former Soviet Republics and developing countries with significant natural resources. It demonstrates the dilemma that they face between short-term goals

Microcredit and political empowerment in Azerbaijan and Kazakhstan

ABSTRACT Despite the increased importance of and attention to renewable energy, its share in the overall energy mix has varied significantly across countries and over time. There are many determinants of clean energy transitions; this study focuses on political constraints. Here it is argued that political systems that have fewer political constraints have fewer access points through which powerful status quo veto players can slow the progress of clean energy reforms. To test the theory, a hierarchical model is applied on a dataset of 125 countries over four decades. The results provide significant support for the theory. Furthermore, the effects for political constraints hold even when we distinguish between hydro and non-hydro renewable sources and control for regime type. This study builds on research that recognizes the importance of politics in understanding the challenges and opportunities of clean energy reform.

Elite Survival Strategies and Authoritarian Reversal in Turkey

A large proportion of the population in poor countries is deemed “unbankable” and cannot borrow money from formal, reliable financial institutions to invest in new businesses or to meet urgent consumption needs. In the past few decades, the development community has increasingly focused on the goal of financial inclusion—providing access to financial services for all. Along these lines, the Nobel Peace Price laureate and the founder of a prominent microfinance institution in Bangladesh, Muhammad Yunus, has been advocating the view that credit is a human right and that financial inclusion for millions of poor and marginalized people is an obligation that governments, international institutions, and civil society organizations have to fulfill. In this article, I outline and analyze the debate over whether or not access to credit should be recognized as a new, emergent human right. In the first part of the article, I present the case for establishing credit as a human right, as laid out by Muhammad Yunus. Second, I map out five potential criticisms of a rights-based approach to credit. Finally, I assess the validity and consistency of these objections and discuss what would be gained by using the language of human rights in addressing the issue of financial exclusion. This exercise of conceptual construction of a possible human right to credit highlights some of the important debates in the human rights literature on what constitutes an emergent human right and how it can be justified.

Foreign Investment and Political Regimes: The Oil Sector in Azerbaijan, Russia, and Norway

Purpose - – The purpose of this paper is to analyze the political effects of microcredit. The author provides the theoretical connections between microfinance and political empowerment and tests them in the context of Central Asia and the Caucasus, a region that is significantly lagging in political development and yet has a growing microfinance potential. Design/methodology/approach - – The author conducted a total of 100 in-depth interviews with microcredit clients in Kazakhstan and Azerbaijan in June 2010 and January 2011, respectively. The author chose my client samples randomly from two of the largest non-governmental microfinance institutions in these countries. Findings - – The findings of the survey reveal that microloans have only led to modest improvements in the socioeconomic status of the clients and had almost no effect on their political empowerment. Disaggregating the data further in terms of gender, type of loan and location of credit does not change the overall trends but reveals that to the extent that any political empowerment took place, group clients (mostly women) in urban settings were more aware and involved in political issues than individual clients in the villages. Research limitations/implications - – Even with a carefully thought-out design, it is not clear how much the responses reflect the true and complicated impact of microfinance on the clients’ lives, a challenge that may be overcome in future research with focus group analysis or an ethnographic analysis of microcredit clients over a long period of time. Practical implications - – Notwithstanding these shortcomings, these observations can help inform microfinance institutions, donor organizations and governments about the true potential of microfinance. A realization of the limits of this unique development tool may prove useful in reorienting the goals of foreign aid and designing a more effective approach to development. Originality/value - – Despite the extensive literature on the economic and social effects of microcredit, very little attention has been given to how economic empowerment generated by microcredit can translate into political empowerment at the individual level. This paper lays out the theoretical reasons for why such a relationship might exist and tests these hypotheses systematically in two countries, taking into account gender, type of loan instrument and location of the loan.

Muhammad Yunus, Grameen Bank and the Nobel Peace Prize: What Political Science Can Contribute to and Learn From the Study of Microcredit

What explains authoritarian reversal and resilience in hybrid regimes? This article derives hypotheses from an in-depth case analysis of Recep Tayyip Erdogan’s rule in Turkey. The Turkish case demonstrates that authoritarian reversal can happen as a result of strategies pursued by political elites to stay in power. Ruling elites in hybrid regimes endure by using the strategies of centralization, legitimation, and repression. During the 2002–13 period, Erdogan and the Justice and Development Party (AKP) were able to entrench their power by eliminating veto players within the state, building a well-organized apparatus for targeted repression, and strategically making concessions to large segments of the electorate. Since 2013, they have changed their strategies for political survival in response to emerging economic and security problems and the ensuing defections of some supporters, which had rendered the original equilibrium unsustainable. AKP elites intensified repression, further centralized power, and relied heavily on an ideological and polarizing rhetoric to delegitimize and splinter the opposition. We argue that this new equilibrium of high centralization, ideological legitimation, and widespread repression allowed the elites to withstand serious challenges to their rule, while significantly weakening the competitive and democratic elements of the hybrid regime. Our in-depth analysis of elite strategies and their adaptability to changing exogenous economic and geostrategic conditions in the Turkish context contribute to the analysis of the resilience and vulnerability of hybrid regimes in general and of where on the regime spectrum they eventually move.