PREVIEW-Aliyev party to extend rule in Azerbaijan election

* West eyeing energy interests, transit route to Afghanistan

* Opposition crying foul, monitors concerned

* President Ilham Aliyev secure in power since 2003

By Lada Yevgrashina

BAKU, Nov 4 (BestGrowthStock) – Azerbaijan’s ruling party is poised
to sweep the board in a parliamentary election on Sunday,
cushioned against calls for democratic reform by the oil
producer’s strategic importance to the West.

Riding an oil-fuelled economic boom, President Ilham Aliyev
continues to consolidate his grip on power since succeeding his
father Heydar in 2003, while downtown Baku is blossoming with
construction and the opulence of an emerging jetset
[ID:nLDE6A0074].

Rights groups accuse the government of curbing freedoms and
silencing dissent, but the West is balancing criticism with
strategic interest.

The mainly Muslim country of 8.3 million people, sandwiched
between Iran, Russia and Turkey at the threshold of Central
Asia, is rich in oil and gas and key to Europe’s hopes of
reducing its energy dependence on Russia. It is also a transit
route for U.S. military operations in Afghanistan.

Western diplomats are unnerved by a 90 percent hike in
military spending announced for 2011. Azerbaijan — host to oil
majors including BP (BP.L: ), ExxonMobil (XOM.N: ) and Chevron
(CVX.N: ) — has been locked for two decades in an unresolved
conflict with Armenia over the rebel region of Nagorno-Karabakh,
and frequently threatens to take it back by force.

“The (democratic) situation won’t change until Azerbaijan
runs out of oil money,” said independent analyst Zardusht
Alizade. “The West is dependent on oil and gas and that’s why it
turns a blind eye.”

ECONOMIC GROWTH

The opposition is already crying foul, while monitors from
the Organisation for Security and Cooperation in Europe (OSCE)
say they have received “credible” reports of intimidation and
expressed concern over the disqualification of candidates.

The rulers deny curbing freedoms and silencing dissent,
saying voters will reward Aliyev and his Yeni Azerbaijan Party
(YAP) for presiding over rapid economic growth that they say has
brought better living standards for all.

Gross domestic product (GDP) in Azerbaijan grew by an
average of 21 percent per year between 2003 and 2007.

Significant foreign assets, strong international reserves
and limited exposure of its banking system to flows on global
financial markets shielded Azerbaijan from the worst of the
global economic crisis.

But GDP growth is projected to slow to 3.8 percent in 2011,
and the International Monetary Fund is urging Azerbaijan to
diversify its economy away from heavy dependence on oil exports.

Development of the non-oil sector is limited and critics
complain the decadence and high prices of Baku mask poverty in
much of the rest of the country.

As for democracy, the government says it is a work in
progress.

“We admit that there have been some violations, but we know
that violations take place even in developed democratic
countries,” YAP spokesman Husein Pashayev said in response to
the OSCE preliminary report on the elections.

“Yeni Azerbaijan did not create any obstacles for opposition
candidates and we do not see any worthy competitors.”
(Additional reporting and writing by Matt Robinson; Editing by
Janet Lawrence)

PREVIEW-Aliyev party to extend rule in Azerbaijan election