Azerbaijan: Not Just Oil

Courtesy of The New York Times, an article on Azerbaijan’s plans for future development:

In March 2010, Ibrahim Ibrahimov was on the three-hour Azerbaijan Airlines flight from Dubai to Baku when he had a vision. “I wanted to build a city, but I didn’t know how,” Ibrahimov recalled. “I closed my eyes, and I began to imagine this project.” Ibrahimov, one of the richest men in Azerbaijan, is 54 and has a round, leathery face with millions of tiny creases kneaded in his brow and the spaces beneath his eyes. He walks the way generals walk when they arrive in countries that they have recently occupied. In the middle of his reverie, Ibrahimov summoned the flight attendant. “I asked for some paper, but there wasn’t any. So I grabbed this shirt in my bag that I hadn’t tried on. I took the tissue paper out, and in 20 minutes I drew the whole thing.”

Once he arrived in Baku, Ibrahimov went straight to his architects and said, “Draw this exactly the way I did.” Avesta Concern, the company that governs his various business interests, subsequently commissioned the blueprints for Ibrahimov’s vision. The result will be a sprawling, lobster-shaped development called Khazar Islands — an archipelago of 55 artificial islands in the Caspian Sea with thousands of apartments, at least eight hotels, a Formula One racetrack, a yacht club, an airport and the tallest building on earth, Azerbaijan Tower, which will rise 3,445 feet.

When the whole project is complete, according to Avesta, 800,000 people will live at Khazar Islands, and there will be hotel rooms for another 200,000, totaling nearly half the population of Baku. It will cost about $100 billion, which is more than the gross domestic product of most countries, including Azerbaijan. “It will cost $3 billion just to build Azerbaijan Tower,” Ibrahimov said. “Some people may object. I don’t care. I will build it alone. I work with my feelings.”

It’s not surprising that Ibrahimov, who plans to live in the penthouse of Azerbaijan Tower, had his epiphany on a flight from Dubai. The vision behind Khazar Islands, after all, is not a vision so much as a simulacrum of a vision. The fake islands, the thousands of palm trees and the glass and steel towers — many of which resemble Dubai’s sail-shaped Burj Al Arab hotel — are all emblems of the modern Persian Gulf petro-dictatorship. And two decades after the collapse of the Soviet Union — its final custodian during 23 centuries of near-constant occupation — Azerbaijan could be accused of having similar ambitions. The country, which is about the size of South Carolina, has 9.2 million people and is cut off from any oceans. It builds nothing that the rest of the world wants and has no internationally recognized universities. It does, however, have oil.

In 2006, Azerbaijan started pumping crude from its oil field under the Caspian Sea through the new Baku-Tbilisi-Ceyhan pipeline. Now, with the help of BP and other foreign energy companies, one million barrels of oil course through the pipeline daily, ending at a Turkish port on the northeastern corner of the Mediterranean Sea. This makes Azerbaijan a legitimate energy power (the world’s leading oil producer, Saudi Arabia, produces 11 million barrels every day) with a great deal of potential. If the proposed Nabucco pipeline, running from Turkey to Austria, is built, Azerbaijan would become a conduit for gas reserves, linking Central Asia to Europe. This could strip Russia, which sells the European Union more than a third of the gas it consumes, of one of its most potent foreign-policy levers. It could also generate billions of dollars every year for Azerbaijan, which between 2006 and 2008 had the world’s fastest-growing economy, at an average pace of 28 percent annually.

Sitting on a couch in the temporary headquarters at the construction site of his future city, Ibrahimov mulled the possibilities. The headquarters, which looks like a very modern log cabin, features a big conference table, flat-screen televisions, a bar, pretty assistants and a dining table that is always set. There is a gargantuan portrait of the president of Azerbaijan, Ilham Aliyev, hanging from a wall, next to the bar. Spread out on the conference table were blueprints for Khazar Islands, which looked like battle plans. Men in leather jackets picked from crystal bowls filled with nuts and dried fruit and caramels in shiny wrappers.

Ibrahimov had slept five hours, he said, but was not tired. He started the day with an hourlong run, followed by a dip in the Caspian Sea, followed by a burst of phone calls over breakfast, followed by meetings with some people from the foreign ministry, then the Turks, then his engineers and architects. Now, while sipping tea, Ibrahimov’s attention was back on Khazar Islands, which he insisted was not modeled after Dubai. “Dubai is a desert,” he said. “The Arabs built an illusion of a country. The Palm” — a faux-island development in Dubai — “is not right. The water smells. Also, they built very deep in the sea. That’s dangerous. The Palm is beautiful to look at, but it’s not good to live in.”

Ibrahimov paused and took a sip of tea. The tiny creases of his face bunched up under his eyes, which looked off into the distance, out the tiny window of the faux log cabin, toward the construction site. He said that he was put off by the inorganic feel of Dubai, the sense that it was so . . . ephemeral. “Everything,” he said dismissively, “is artificial.”

Few countries have come as far in mastering the art of geopolitics as Azerbaijan. After being occupied by Cyrus the Great, Alexander the Great, the Seljuks, the Mongols, the Persians, the Russians, the Ottomans and, finally, the Soviets, Azerbaijan, which achieved its independence in 1991, has cultivated relationships with the United States and many European countries and deepened relations with Russia and key Central Asian “stans.” These days, Azerbaijan, which is overwhelmingly Muslim, buys advanced weapons systems from Israel in return for oil. A new member of the United Nations Security Council, the country sided with the United States against Russia last year on a resolution condemning Syria. “This is a very small country on a very significant piece of real estate,” says Matthew Bryza, the former U.S. ambassador to Azerbaijan. “Azerbaijan pursues a very realpolitik policy.”

In the old days, they came for geography (Azerbaijan is perched on the Caspian). About a century ago, they started coming for oil. Then, after the Soviet Union collapsed, the energy sector became a source of enormous wealth. Now Azerbaijan is trying to take advantage of that wealth. As such, Avesta’s sales and marketing team recently produced a gleaming 101-page coffee-table book in a gilded box promoting Khazar Islands. It features photographs of men in Italian suits and women with pouty faces; everyone drinks wine and is on a cigarette boat or in a Mercedes convertible. There’s also a video that shows computer renderings of Khazar Islands in the not-too-distant future. The video lasts 5 minutes 6 seconds and includes an image of a make-believe skyline at night and another of Ibrahimov on a cellphone in front of a private jet, even though, he conceded, he doesn’t own one.

Two things about the video are striking. First, there isn’t any information about asking prices, square footage, move-in dates or why anyone would want to live in Baku. And then there’s the soundtrack, which is a synthesized blast of violins, harps, horns and snare drums that makes you feel as if you’re riding a stallion in the desert in the 1980s.

The day before my three-hour flight from Moscow to Baku last spring, Avesta’s sales and marketing director at the time, Kenan Guluzade, flew to the Russian capital to hand-deliver the book and DVD to me at a Starbucks. Guluzade said he had to be in Russia anyway, but he was also worried that, as a journalist, I might not get into Azerbaijan. Guluzade came with his assistant and his father, who sported an elegant, silk scarf and a tailored jacket. Guluzade spoke quickly, in English. “It’s really nice to feel attention to our construction project,” he said, and then he handed me a fancy shopping bag with the DVD and the book. His father sipped a latte. “The new Baku is stunning,” his father said. Then Guluzade said: “This is true. It’s amazing what is happening.”

When I arrived in Baku, the first of the Khazar Islands had already been plunked down, and the first few apartment buildings were going up. The entrance featured a menacing, falconlike archway. Boulevards and traffic circles had been paved, and there were long strips of palm trees — “Mr. Ibrahimov loves palm trees,” Nigar Huseynli, Ibrahimov’s assistant, said — and everywhere there seemed to be mounds of earth and retaining walls and the concrete outlines of future cineplexes and shopping malls. Amrahov Hasrat, who was the chief engineer at Khazar Islands, told me that 200 trucks brought in rocks every day from a bluff eight miles away. “We are destroying the mountain,” Hasrat said, pointing off into the distance in the direction of a hill, “and taking the rocks back to the sea to build the artificial islands.”

In some ways, though, reality is already taking shape. When Guluzade met me in Starbucks, 96 apartments had been sold. Two days later, that figure inched up to 102. Now, it’s 136. The asking prices run from about $280 to $460 per square foot, meaning a typical 1,076-sqare-foot apartment at Khazar Islands starts around $300,000. Ibrahimov expects geometric growth after 2015, when they’re scheduled to break ground on Azerbaijan Tower.

Western financial analysts and real estate developers are understandably skeptical. For one thing, there’s President Ilham Aliyev’s regime, which opposes political competition and other reforms that would diversify its economy and spur the long-term growth needed for this kind of mega-project. There’s the fact that no one has ever tried anything this ambitious in Azerbaijan. Finally, this is a rough neighborhood. The conflict in Nagorno-Karabakh, an autonomous region within the country, raged between Azerbaijan and Armenia from 1988 to 1994 and has never really been resolved. Russia could invade Georgia, as it did in 2008. There’s the chance of an American or Israeli strike on Iran, Azerbaijan’s southern neighbor. Last month, riots raged for two days in Azerbaijan as people protested local corruption in Ismayilli.

Yet Ibrahimov, sitting behind the blueprints in his log cabin, remained extremely optimistic. Azerbaijan, with its new money and undeveloped coastline, offers “biznessmen” from the former Soviet Union — a group that might be defined as importers, exporters, government officials who dabble in the private sector, people who aspire to be Ibrahim Ibrahimov — an affordable nearby playground. As of late 2011, according to WealthInsight, a market research provider, there were nearly 160,000 so-called high-net-worth individuals in Russia alone, with a combined worth of nearly $1 trillion. Even Turkmenistan, the North Korea of the former Soviet Union, is building a luxury development, Avaza, which also has fake islands and reportedly will cost $5 billion and sit on the Caspian’s eastern flank.

It was crucial, Ibrahimov told me, to visualize what everything will look like in 2022, when Khazar Islands is supposed to be finished. He pointed outside the small window, to the sea. “That is where it will be,” he said, referring to Azerbaijan Tower. “In the water. Can you see it?”

Some in Baku already can. Indeed, the most crucial factor underpinning the project is that President Aliyev’s regime seems to want Khazar Islands built. Ilgar Mammadov, chairman of the pro-democracy Republicanist Alternative Movement, characterized Khazar Islands as an inexorable beast. The country’s international strategic monetary reserves are now more than $46 billion, Mammadov said, and in 10 years, as oil and gas revenue rise, they could be near $150 billion. “Azerbaijan has the capacity to build the tallest building,” Mammadov said, a hint of lamentation in his voice. “That’s not in doubt. We will create this big building, and then it will, by itself, by the very mere fact of its existence, bring cash. How will that work? Nobody knows.”

Ibrahimov was sitting in the back seat of a black Rolls-Royce as it tore across island No. 1 of his soon-to-be built archipelago. Nigar Huseynli, his 23-year-old assistant, was sitting up front in a black and white floral-print skirt, black tights and rectangular black sunglasses. She seemed to be vaguely worried, always. She wore a great deal of perfume that, she said, came from Italy. “When he’s in Azerbaijan,” Huseynli said, “Mr. Ibrahimov always drives in his black Rolls-Royce. In Dubai, he has a red one.”

Before I arrived in Baku, Huseynli tried to convey just how much power Ibrahimov wields in his country. But it wasn’t obvious until I landed at Heydar Aliyev International Airport and showed the passport-control officers a letter from Huseynli stating that I would be meeting with Ibrahimov. The letter included Ibrahimov’s name and signature at the bottom, and it seemed to frighten, shock and amaze all at once. A crowd of guards and customs agents gathered around and stared in silence.

Ibrahimov seems to be vaguely aware of the numinous glow that envelopes him. He is supremely concrete, focused on things like buildings, cars, hand-held devices, jeans or which country he’d like to be in right now, but in a manner that suggests he can have whichever of those things he desires most. As the Rolls sped past large knots of men in hard hats and jumpsuits, he sent text messages and juggled cellphones. His son called. Then the Qatari ambassador. Then someone who annoyed him. A television screen positioned three feet in front of the seat that Ibrahimov always sits in blared music videos, and some girl group was singing a two-minute riff called “Take Me Away.”

Ibrahimov, who sported blue Stefano Ricci crocodile-skin shoes that matched his blue Stefano Ricci jeans, blue Zilli jacket and blue Zilli button-down shirt, tapped his foot arrhythmically. Every time I started to ask a question or he started to answer, there was a call or an incoming message. Occasionally Ibrahimov said something random that could be mistaken for something profound: “I live very simply,” or “My favorite places are France and Turkey.”

When Ibrahimov talks about himself, he hews to platitudes about, say, family (“it is important”) or how to get ahead in ex-communist countries (“instinct”). They are lessons he seems to have internalized. Ibrahimov was born in a village in the Nakhichevan Autonomous Republic, a sliver of Azerbaijan wedged between Armenia and Iran. He has four brothers and two sisters. He called his father a “good Soviet” and a major influence in his life, but some suspect that Heydar Aliyev, Azerbaijan’s previous president, played a more important role.

Aliyev, a former Politburo member, also came from Nakhichevan. In 1991, he became de facto leader of the autonomous republic, just as the Soviet Union was falling apart and Ibrahimov was starting his first business, a limited-liability corporation called Ilkan. It’s unclear what Ilkan made or sold — Ibrahimov said only that he made his first million, in 1992, in the furniture business — but in the early ’90s, according to Avesta company literature, Ibrahimov built a three-story headquarters for Ilkan in Nakhichevan, which would probably have been very hard without support from someone powerful. Then, in 1993, Aliyev became president of Azerbaijan, and in 1996, Ibrahimov began Avesta. “Mr. Ibrahimov has always had very good relations with the government,” Guluzade, Khazar Islands’ former marketing director, told me.

Today Avesta oversees Ibrahimov’s many smaller companies. Some of these companies do things that seem to actually support Ibrahimov’s larger, development-related projects (building things, hauling equipment, clearing debris). Others, like the Azerbaijan-Iran Gunel Joint Enterprise, suggest more political interests. Opposition figures say that Ibrahimov owes much of what he has to the Aliyev family, but when I asked Ibrahimov about this, he shrugged. He said Avesta is not only a corporation but also a philanthropy, building water pipelines and mosques for poor villagers. He called Heydar Aliyev, who died in 2003, his inspiration, and he made a point of saying, more than once, that he likes Aliyev’s son, the current president, very much and thinks that he is guiding his country toward a more glorious and profitable future.

As Ibrahimov spoke, the Rolls trundled over an unpaved road. He maintained, always, the outlines of a barely discernible grin, and every few seconds he would point at something that wasn’t there but he could already see perfectly, that had been part of his vision. The Azerbaijan Tower, he proclaimed, would definitely be in Guinness World Records, and if the Saudis or Emiratis or anyone anywhere tried to build a bigger building, then he would build an even bigger one.

I asked him if there was anything Freudian about all these skyscrapers. He didn’t reply. Then suddenly, Ibrahimov blurted a series of unprompted factoids in his faux-profound style. First, “One hundred and fifty bridges are planned for Khazar Islands.” Then, in what seemed like a reference to his love of yachts: “Today the Caspian is only used for oil, but it’s not right.” Huseynli pointed at a cluster of recently planted palm trees. This seemed to cheer him up.

On some level, there is an economic logic behind building the tallest, biggest, brashest building anywhere. The rise of superdevelopments in cities like Doha, Riyadh, Kuala Lumpur, Shanghai — and, of course, Abu Dhabi and Dubai — sent signals to investors that the state supported growth. Usually, these sorts of developments attract the attention, first, of regional investors who know the local topography, which Khazar Islands has already done. “They’re coming from Russia, Ukraine, Georgia, the Arabic countries and especially from Israel,” Guluzade told me. Next are the more skeptical international investors that Ibrahimov is hoping to impress. Hence the Azerbaijan Tower. “The investor is faced with this battery of choices,” explained Brian Connelly, a strategic-management professor at Auburn University’s College of Business. “But there are things they can’t see, so they’re looking for a signal that tells them this is good for them. If I can see that there’s the tallest building in the world, I know the host-country institutions are behind them.”

Riding around in the Rolls, I couldn’t tell whether Ibrahimov was indeed a brilliant strategist or someone who just had the capital to create a vision on a piece of tissue paper and turn it into a construction project. Or perhaps both. As we neared the site of what will be the ritziest restaurant at Khazar Islands, he became very excited. The concrete and aluminum skeleton of the restaurant resembles a Viking helmet, and when it’s done, it will include a microbrewery, which Ibrahimov mentioned two or three times. “We have a guy from Austria,” he said. Nearby, there were more men in hard hats and jumpsuits, and trucks carting rocks. “In my head,” he said, “this project is already done.”

Ibrahimov is not the only developer in Baku, and Khazar Islands is not the only major development. Flame Towers, which features three flamelike towers, includes a five-star hotel and, at night, will be lighted in red. The Heydar Aliyev Center, designed by Zaha Hadid, includes a museum and looks a little like the starship Enterprise. Baku White City will encompass 500-plus acres of new apartments and parking lots and is supposed to be the opposite of Black City, where the oil barons built their refineries a century ago. Finally, there’s Crystal Hall, a 23,000-seat arena overlooking the Caspian.

Nearly three years after Ibrahimov’s initial vision on the Azerbaijan Airlines flight, Khazar Islands has grown to 4 fake islands, 1 bridge and 13 apartment buildings. All this development can feel a bit weird, or at least incongruous. As the Rolls careered through the outskirts of Baku, Ibrahimov became quiet. Unlike the United Arab Emirates, which was, until recently, a desert, Baku has a rich architectural history, with centuries-old mansions, mosques, palaces, squares and esplanades. (Some sites date to at least the seventh century.) Baku has a grace and cosmopolitanism; it feels like an amalgam of Paris and Istanbul, albeit dustier. It also feels like a gateway to the East, distant places, mythologies and many other things that the new Azerbaijan doesn’t have much appetite for. I interpreted Ibrahimov’s silence as a sign of melancholy, but in the front seat, Huseynli, who was fielding calls on two or possibly three cellphones, each with its own hip-hop ring tone, turned around excitedly. Glancing at the beige facades, the narrow streets, the old women selling apricots and nuts and pirated DVDs, she said: “All of this soon will be gone. Then we will have a new city. I like the old, of course, the historic. . . . But this will be gone, and then it will be a different country.”

When we pulled up to the Avesta Concern Tower, in central Baku, several men in tweed jackets were assembled on the curb and ready to escort us inside. After lunch in Ibrahimov’s private dining room, we decamped to the office and sat on a red silk divan with miniature Sphinx armrests. Ibrahimov pointed out his artifacts: his desk, which, he said, is Spanish and the same kind used by Vladimir Putin; a chess set from Italy; a sculpture of his father.

Ibrahimov segued back to Ilham Aliyev, the Boss of All Bosses, whom he called a great supporter, an ally, the son of the savior of the people of Azerbaijan. I asked him about other features of his regime: the lack of transparency, the lack of civil liberties, the detention of opposition activists. Ibrahimov said what oligarchs have been saying since Mikhail Khodorkovsky, the Russian industrialist, was exiled to Siberia in 2003: “I don’t know anything about politics.” But “biznessmen” are much more intimately woven into the political fabric of Russia or Azerbaijan than C.E.O.’s in the West. They may wear crocodile-skin shoes, but they rely on the state for pipelines and extraction rights.

Ibrahimov, like other successful men in this part of the world, knows his place, and he knows it is best to be philosophical about these things. “Don’t ask me about politics,” he said. “I’m afraid I’ll make a mistake. This is not what I’m good at. This is not what I do.” Then his semismile semiwidened, and he started talking about his next big idea, which features more stratospheric buildings and superlong canals and eight-star hotel-palaces and heliports and yacht clubs. He was sure all these things could be done. He knew it. There were important people — “political people,” he said — who support him.

This entry was posted on Saturday, February 9th, 2013 at 7:45 am and is filed under Azerbaijan.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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