Azerbaijan: An Ancient Crossroads Confronts the Oil Boom – October 2007

Recently, I was in Istanbul for a board meeting and had a break of several days before heading off to Warsaw for another obligation.  I decided that I would leave Turkey and spend a few days relaxing somewhere nearby.  My criterion for picking a location was pretty simple:  I wanted to go to a country that is still pro-American.  These days, given the complex state of our world, goodwill towards our country has faded, at least for a time, in many places.  As a relatively patriotic guy, I was looking to bask in some good feelings for a change.  Narrowing down the choice to Azerbaijan was pretty easy versus Turkey’s other unabashedly pro-American neighbors like Bulgaria (had a chance to go there a few years ago) and Albania (probably the most pro-American country in Europe, but I heard that some bad Albanian apple stole President Bush’s watch when he was there a few months ago).

Azerbaijan’s capital, Baku, is a city of about 2 million people that sits on the coast of the Caspian Sea.  It was a key trading center on the Silk Road and there is a fortified maze-like old city at its center that dates back to the 7th Century.   In the early 20th Century, an oil boom provided the cash for the city to be constructed in the image of Paris.  Throw in some regional wars and domination by the Soviet Union, and the Baku of today, much like Buenos Aires or Bucharest, reminds me of a somewhat derelict version of Paris. 

Just a three hour flight from Istanbul, the city is perhaps one of the most dramatic beneficiaries of the current oil boom.  Over the last couple of years, surging oil prices have shifted a tremendous amount of wealth from one part of the world to another.  Consumers in countries that are highly dependent on oil imports have lined the pockets of the companies and individuals that control these resources.  Since petroleum accounts for over 50% of the country’s wealth, the size of the Azeri economy doubled last year due to the surge in oil prices.  Given its surging, albeit poorly distributed wealth, and the importance of trade to its economy, Baku is a pretty cosmopolitan place. 

As a kid, I remember that at times we’d discuss as a family what each of us would do if we won Megabucks.   Given the tremendous influx of cash into the country and its concentration in a few lucky hands, Baku is being rapidly modernized and upgraded.  Thus, Azerbaijan, in its own way, is currently grappling with this very question.   Based on what I saw during my stay in Baku, the Azeris have decided to spend their Megabucks winnings on blocks of new apartment buildings, which means that the cityscape is dominated by groupings of cranes.  On the streets, a herd of luxury goods companies, from Chopard and Hugo Boss to Ferre and Armani, is opening new stores or remodeling existing locations. 

 One of the things that I really like about a place like Azerbaijan is the unusual types of characters with whom you have a chance to connect.  On my last day in the city, I decided to head into town to the Sunday market to add to my collection of army medals from the communist days.  On the way back to the hotel, I hailed a taxi.  The driver, a man in his 60’s, smiled and asked me if I was from Sweden, or Ireland, or perhaps England (whether I’m in Asia, Latin America, or Europe, people always think I’m Swedish).  No, I responded, “I am an American.”  “Great! I love Americans,” he exclaimed.  “I will give you a ride in my Volga – did you know that the Volga is the Russian Mercedes?” 

 On the way to the hotel, he pointed to the CD player and asked me if I would like to hear a recording of his son, a folk singer who has apparently toured extensively in Europe.  As the brother of a musician and the son of parents’ who like to share CD’s of their son with third parties, I couldn’t resist.  He popped in the CD and the Volga was filled with the sounds of Azeri folk music.  

 As we sped through the city accompanied by the sounds of timeless Azeri folk music, it occurred to me that despite all of the changes in the country over the last several years, somehow the Azeri people appear to remain connected to their history.  Since the 7th century, the country has represented a crossroads between East and West, yet it has preserved its culture even while drawing on outside influence as a source of prosperity.  Moreover, the Azeri culture survived both the domination and disintegration of the Soviet Union.  Somehow, something tells me that this fundamental trait will continue even as new wealth enters the country during the current boom.  After all, how much can an Armani store really change a nation’s soul?

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