Baku, they say, is booming. Everywhere you look there are new stores, new filling stations, new bars, new restaurants, new cars, new buildings. My old Russian teacher, Elfrieda, who a mere three years
ago used to complain bitterly about her $10 per month salary and the quality of the meat in the slaughter-in-the-street markets around town, now shops only in the newly opened, spick and span, paper-clips to caviar RamStore, where the hamburger (and chops and steaks and sirloin) is now listed by grade and neatly wrapped in cellophane--and handed over with a thank you very much.

Up and down "Neftjilar Prospekti", or Oilmen's Boulevard, shops, cafés, and Western-style bars are springing up like so many hydrocarbon-fed mushrooms. Most, like the Ragin' Cajun bistro (run by an American), and the Sine Klub (owned by two Turkish entrepreneurs), cater to foreigners and locals associated with the country's infant Caspian oil industry and the growing diplomatic community. The only thing lacking, it seems--and there are millions of dollars to be made for the first person who picks up the idea--is a series of dry cleaning shops to deal with the piles of new dirty laundry. Oil can do that.

The growing list of international companies (seemingly everyone from Brown & Root to Penzoil now have offices in town) and embassies--there are now seventeen of the latter, including those of Israel and Iran--employ hundreds if not thousands of Azeris, all of whom directly contribute to a "trickle-down" of wealth into the economy as a whole. This is a long way from the Azerbaijan I knew in 1991. It seemed then that I was the only foreigner who was interested in the country. "You are living in Azer-what?" was the usual response from friends and family back in Montana. The response from locals Azeris to my presence was a little different: Because I was the first foreigner (or at least American) that many of my new Baku friends had ever met, my apartment was regarded as the quasi-American embassy in town. I personified the American Presence, an honor I not only did not deserve, but actively resisted.

Today, the situation is much different. The estimated number of registered resident Americans has jumped to six hundred, and the total number of foreigners might top three thousand. Elfrieda now sits on the board of the new Azerbaijan International Women's Society, along with the wives of the American and British ambassadors. The American presence is now institutionalized by a large, well appointed embassy, replete with consular office and
library and dozens of uniformed staff. The other Americans in town range from the hundreds of oil men and their hangers-on to high school student exchange administrators, wandering researchers and Ph.D. candidates (all of whom are learning Azeri and not Russian), and God knows how many representatives of various and sundry non-governmental organizations.

Yes, Baku is booming, and, for "old-timers" like myself, remembering it from the immediate post-Soviet period, it is almost unrecognizable after a mere five years. It is, to start, something of a surprise that there is still an Azerbaijan at all. Since achieving independence in the wake of the August 1991 abortive coup in Moscow, the country has "enjoyed" three presidents, multiple acting presidents, two successful putsches, a handful of attempted coups detat, and generally more instability than most Middle Eastern, Caribbean, or chronically putsch-prone Central and South American countries could pack into a full decade. The reason for this is that Azerbaijan lies smack-dab on the ancient triple fault line where (Orthodox) Christianity abuts on not one but both major forms of
Islam (Shi'i and Sunni), and the modern fault line of cultural/economic/political influence between Russia, Turkey, Iran, and now the energy-hungry West. It is not a nice neighborhood in which to raise a healthy, independently-minded civil society, and it seemed very possible a few years ago that the mixture of rapacity and corruption in the oil sector, defeat at the hands of the Armenians in the eight-year war over Karabakh, and the continued Russian effort to regain control of the country and its resources would conspire to put a quick end to Azerbaijan as an independent state.

But that did not happen, and although all these forces are still at play, more than ever before Azerbaijan actually feels like a real country. And while it may be painful for many to admit it, much of the credit has to go to the current president, former KGB general, Azerbaijan Communist Party boss, and Politburo member under Yuri
Andropov, Heydar Aliyev.

The Improbable Nationalist

When Heydar Aliyev came to power in Baku in 1993--de facto in July, de jure in October--under highly convoluted circumstances, his career credentials suggested the hand of Moscow behind him, with the Russian
arm and the rest of its body soon to follow. What a change from Abulfez Elchibey, a pro-Turkish and pro-Western Azeri nationalist whose main political guidepost appeared to be "anybody but Russia." But to the surprise of most observers inside and outside the country, Aliyev has linked his fate to that of the new, independent, post-Soviet state. He has become a nationalist.

He has not yet become a democrat, however. Foreign diplomats and observers are right to criticize Azerbaijan's snail-slow pace of political reform. At the same time, there is no doubt that Aliyev reigns over a country in the throes of profound and mainly positive material change. In a sense, Aliyev is taking the Chinese approach to
things--economic stabilization and progress before a roll of the political dice--and given the relative histories of Chinese and Soviet reform trajectories in the 1980s, who can blame him? Whatever else is said about him, President Aliyev has managed to bring his country the first taste of the potential wealth promised by Caspian
oil, even though that oil has yet to flow. When it does, however, it will be the proverbial gusher. Azerbaijan is sitting on $100 to $200 billion worth of black gold. To get to and export it, Western oil consortiums have committed themselves to pumping tens of billions into Azerbaijan over the next decade. Collateral investment may bring that figure to as much as $75 billion. That, as even Senator Dirksen would have agreed, is real money.

The question is whether Azeri society can tolerate that infusion of wealth and make use of its resources to become a "second Norway", or whether it is condemned to become a "second Nigeria", with all that implies. The question arises because oil is truly a dirty business. A professor of mine at Princeton, Charles Issawi, once referred to it
as less a blessing than a curse because of its propensity to make small but oil-rich nations lazy, corrupt, and coveted by their neighbors. With a few exceptions, too, it has not conduced to helping sustain democracy where it did exist, and oil has by no means shown a capacity to transform non-democratic political cultures into democratic ones. This has certainly been true in the case of post-Soviet Azerbaijan, which clearly falls into the latter category.

So while it is fashionable among some circles in Baku, and abroad as well, to blame the lack of (or at least the attenuated state of) democracy in Azerbaijan on President Aliyev, the reality is more complex. The rationale for Aliyev's authoritarianism, it is said, is that he wants all the wealth for himself and his family. But while it
is true that Aliyev and his Nakhichevan clan are taking advantage of the inchoate oil boom in Baku, so has everyone else who has sat in the roller-coaster driver's seat in the Azerbaijani capital--namely, Aliyev's two predecessors as president, the neo-communist Ayaz Mutalibov (September 1991-March 1992), and the pan-Turkic nationalist, Abulfez Elchibey (June 1992-June 1993), both of whom were removed from office in the course of elaborate plots involving various mixtures of defeat in war, swarms of internal refugees, and corruption born of oil greed.

Of the three, Aliyev may be in the most delicate position of all due to the rapidly rising expectations of a population that now believes it actually lives in a "wealthy" country. Azerbaijan may no longer be engaged in a hot war with Armenia, but it is still in for a long, rough ride before any substantial amounts of oil get to market and
before any real revenue starts accruing for the benefit of the country as a whole. A senior British diplomat anticipates a "ten year trough of social discontent" as a result, and adds: "If Aliyev, or his successor, can get over that hump, this could be a very prosperous country indeed. If not, the potential for chaos and even
disintegration is very real." You do not have to be a Nobel Prize-winning sociologist to understand that potential "chaos" and "disintegration" are not conducive to the development of civil society, let alone a functioning democracy. Nor, for that matter, in a region like the Caucasus (where Mr. Nobel himself made much of his
fortune), is civil society necessarily fueled by an oil-based economy. A little history is perhaps appropriate here to bring us properly to the present moment.

About six years ago, the representative offices of such giants as Amoco and Penzoil were single rooms in the old Intourist Hotel. From there, they tried to make contact and talk about oil with the bureaucratic machine of the old Azerbaijan Soviet Socialist Republic. Negotiations were less tough than chaotic. It seemed that the late-Soviet leadership of Azerbaijan really did not understand the extent of the energy resources they controlled. Or, possibly, they understood only too well that allowing foreigners to exploit the oil would lead to the regulation of the industry, thus putting an end to their own myopic rapacity. As an oil man involved in the early negotiations described it, "No new oil contracts for production or exploration were going to be signed until the existing infrastructure broke down to the point that there was nothing left to steal."

The only deal that almost got signed during the Mutalibov period of Azerbaijan's earliest independence was with the notorious U.S. mega Oil Company. Under this scheme, oil contracts were to be exchanged for Praetorian Guard-style security services--that is, money for muscle to protect the Mutalibov regime from the opposition Popular Front. Nor was oil helpful in establishing the democratic bona fides of Elchibey's Popular Front government when it came to power in June 1992. Individuals who had earlier been selfless patriots soon learned
the joys of the greasy gravy train, and kept negotiations going until the last moment in order to bring every last corrupt dollar within their grasp.

Oil was then largely responsible for Elchibey's fall from power. The June 1993 putsch against him by the Moscow-backed warlord Surat Husseinov was timed to occur just before Elchibey was to fly to London to sign the so-called Deal of the Century--the huge international oil consortium composed of British Petroleum, amoco,
unocal, Penzoil, and several other oil giants. Nor was it surprising that Husseinov's so-called second coup attempt, this time against Aliyev in October 1994--so-called because it has never been completely clear if there was a coup attempt, or if Aliyev alleged an attempt in order to move against Husseinov--occurred just as the
Azeri Parliament was to ratify the same Deal of the Century contract that Aliyev had initialed a month before. The same goes for the so-called (so-called for the same reason) Ravshan Javadov coup attempt of March 1995: In a truly bizarre scenario that is only possible in an environment of extreme greed, the Turks (or some Turks) decided that they were getting cut out of the action, and that the best way to get dealt back into the Caspian oil sweepstakes was to unseat Aliyev and force yet another renegotiation of the contract.

Aliyev quashed both revolts. But in so doing, he realized that he needed protection--in particular, he needed someone with a vested interest in his government. Because Russia had backed Husseinov and the Turks had backed Javadov, that "someone" became the Western oil men and their governments, particularly those of the United States and Great Britain.

Since the spring of 1995 the security guarantee of the "oil interests" has been cast wider still. Cutting in ever greater numbers of oil companies, the various deals in Azerbaijan now include representatives from Russia, France, Italy, Saudi Arabia, Japan, the United States, the United Kingdom, Norway, and Turkey--and more
contracts engaging still other national and multinational oil companies seem to be signed every other week. Oil men like to refer to this as the "internationalization" of the Azeri oil patch. But as a representative of the Japanese company Itochi suggested with a smile, it may be more accurate to think of it as "international insurance. . . . Our question at this point is whether Azerbaijan--and, for that matter, Georgia and Armenia--will continue
to exist as independent states in 20 years", he explained. "Multiple foreign interest in the oil sector seems to be the est means of insuring that the investments we make today will not evaporate tomorrow."

If tomorrow is a problem, today is a surprise. In a way, it is improbable that anything passing for civil society exists in Azerbaijan. Few in the West would be very surprised or deeply distressed (except in a knee-jerk sort of way) if Aliyev were to ban all opposition parties and institutions and declare and enforce a state of emergency that would effectively turn Azerbaijan into an Uzbekistan-style police state. But he has not done so. During a
recent visit, I was as surprised by the level of political discussion as I was at the pre-oil-boom economic activity. Despite much moaning about Aliyev's authoritarian ways, which have included locking up opponents (e.g., former Foreign Minister Tofig Gasimov) in psychiatric hospitals, show trials (for former military commander Arif Pashaev), and rigged elections (international observers judged the November 1995 parliamentary elections "neither free nor fair"), life seemed pretty normal. A leading member of the Popular Front told me that Aliyev has come to understand that he cannot disregard the opposition's organization, and is quietly trying to work with them in a common effort to keep Russia out of Azerbaijan for good. Leading editors, while noting that censorship has been an issue, pointed out that journalists are finding creative ways to work around the censor's plodding red pen, a favorite technique being to replace cut copy with pithy cartoons--a tractor rolling over an extended tongue,
for example, or a man holding a giant fountain pen that has just leaked all over his pants. And while it was assumed that the Azerbaijani MTT (their equivalent of the KGB) was monitoring phone calls and bugging offices, no one seemed overly concerned about the intrusion; it certainly did not hinder discussion of even the most critical and sensitive of subjects. So while Baku is not Bern, Switzerland, neither is it Tashkent, Uzbekistan.

Even more surprising was the effervescence of non-governmental organizations (NGO) active in all sectors in the country, but particularly in connection with what would be best described as opposition organizations. In addition to the usual international suspects associated with refugee relief and humanitarian aid (the unhcr, Médecins sans Frontières, Save the Children, Oxfam, and the like), there was a plethora of locally staffed foreign NGOs and just plain local NGOs active in such fields as democracy building, constitution writing, free speech-promoting/censorship-busting, and even training in grant-proposal writing, this thanks to the recent arrival of the ubiquitous Soros Foundation.

Indeed, throughout the post-Soviet world there is hardly a country that is not afflicted by that peculiar post-communist malady: NGO-itis. The affliction usually manifests itself through a series of symptoms that can be summed up as an idealistic--or naive--over-reliance on outside funding to promote internal political
and social change. NGO-itis is also manifest in the behavior and attitude of many of the physicians administering to the patients--that is, the foreign representatives of the various NGOs. They display an overzealous approach to social change in societies they know very little about. Thus does naivete meet energetic ignorance, the result being usually a large, if well meaning, muddle.

Catch-907

The difference between Azerbaijan and the other post-Soviet states (and East European ones, too) is that thanks to the Congress of the United States, Azerbaijan does not receive one drop of institutionalized, government-to-government U.S. aid. Rather than promoting institutional change in Azerbaijan by convincing diverse parts of the government to pass this or that law on subjects ranging from privatization to freedom of the press, the Congress has, in effect, dedicated itself to the business of changing the government in Baku. That is to say, we are engaged in promoting revolution, and perpetual revolution at that.

This may come as a shock to many of the good lawmakers in Washington, but it is nonetheless true. Thanks to the little known Article 907 rider to the 1992 Freedom Support Act--the legislative vehicle for the pumping of billions of dollars worth of U.S. aid to the post-communist world to support everything from de-nuking Kazakhstan
to supporting pig farmers in Ukraine--the U.S. government cannot earmark aid to any institution or individual with any connection to the government of Azerbaijan. And, indeed, thanks to Article 907, not one dime of American money has been invested in the process of reforming governmental institutions in Azerbaijan--even when the government was eagerly open to such influence, as it was under Aliyev's predecessor, Elchibey.

Because of 907, too, any persons or organizations in Azerbaijan receiving U.S. assistance are perforce regarded not simply as non-governmental organizations but as opposition organizations interested less in building civil society than in changing the government and replacing it with themselves. The ultimate irony is that were any of the U.S.-sponsored or funded opposition groups to take power and actually be able to effect the sort of societal and
institutional reforms they learned at the knee of their American mentors, at that very moment they, as the government, would be subject to the same restrictions on U.S. aid as their predecessors--that is, they would become U.S. aid pariahs. To pile irony on top of irony, the deposed authoritarian government, now in
opposition (or hiding), would suddenly become eligible for travel grants to attend seminars on human rights, judicial reform, and the beauties of constitutional checks and balances, all as promoted by the founders of the basic law in the United States or their more recent descendants. This is Catch-907.

How did this peculiar state of affairs come about? The wording of Article 907 gives a hint. It states that no government-to-government aid can move from Washington to Baku "until the [U.S.] President determines, and so reports to Congress, that the government of Azerbaijan is taking demonstrable steps to cease all blockades and
other offensive uses of force against Armenia and Nagorno-Karabakh." In short, Congress blockaded aid to Azerbaijan because Azerbaijan was blockading Armenia.

But it was not, and is not, so simple as that. The bloody war over Nagorno-Karabakh (circa 20,000 dead; one million refugees) is so complex that one could honestly debate the question of who was using force against whom when Congress passed the 907 rider in the summer of 1992. At the time of the discussion, Azerbaijan was mounting an offensive in response to piecemeal conquest by Armenian forces over the previous year. By the time the bill was passed into law, however, the Armenians were once again in the ascendancy on the battlefront and remain so today. More to the point, a broad cease-fire has been in effect since May 1994 along front lines that have left some 25 percent of Azeri territory (including Karabakh) under Armenian control, and some one million internal refugees from those areas scattered in squalid camps throughout the country. In fact, Azerbaijan was never able to "blockade" Armenia; rather, Baku imposed a trade embargo because it thought that conducting business as usual with an enemy occupying a large swath of its territory was not a particularly good idea in wartime. Abraham Lincoln, it may be recalled, felt just the same way.

Despite its inconsistencies, the 907 rider to the Freedom Support Act was pushed through both houses of Congress, thanks mainly to the successful lobbying efforts of such groups as the Armenian Assembly of America and the Armenian National Committee. There is no secret here; both the AAA and the ANC are proud of their influence. The AAA recently published a congressional report card that lists how each and every member of the House and Senate voted on twenty different subcommittee, committee, or full-floor lawmaking items, almost all of
which have to do with Article 907 in one way or another, from the initial drafting of the article in 1992 to blocking efforts to repeal or amend it in 1996.

Happily, for those who take legislative actions seriously and who worry about the undue influence of lobby groups as a whole, the report card also lists the legislators who have "proactively distinguished themselves in affecting pro-Armenian and pro-Nagorno-Karabakh legislative actions." At the top of the senatorial list, both alphabetically and spiritually, is the recently retired senator from Kansas and failed Republican hopeful for the office of president, Bob Dole. He is followed by Dianne Feinstein of California, Carl Levin of Michigan, Mitch McConnell of Kentucky, and Paul Simon of Illinois. From the House, the special thanks list includes Peter Blute of Massachusetts, David Bonior of Michigan, Joseph Kennedy of Massachusetts and, pre-eminently, John Porter of
Illinois (who, aside from sponsoring several pieces of legislation associated with Article 907, was also active in what can only be described as gratuitous Turkey-bashing legislation). At the behest of the AAA and ANC, and well orchestrated mail-in efforts mounted by these membership organizations, the above mentioned lawmakers were able to shove 907 through a largely oblivious Congress, and to make it one of the most effective pieces of ethnic group-specific legislation ever passed.

The Bush administration opposed the article's inclusion in the pending Freedom Support Act, but was reluctant to jeopardize the entire act by exercising a veto over one rider, especially in an election year. Since then, repeated efforts over the past five years to repeal 907, and contrary efforts to foil repeal, have left a trail of dust, paper, bad feeling, and frustration on nearly every side. What they haven't done is change the law; the damn thing is still on the books. The only thing that has changed, thanks to an amendment introduced by Rep. Charlie Wilson (D-Texas), is that some American money can now reach projects involved in humanitarian assistance and the building of democracy and free-market economic institutions. Wilson managed the inclusion of a narrowly drawn exception to 907 in the non-amendable "conference report" on the 1996 Foreign Appropriations Bill that allowed the president to advance humanitarian aid directly to the government of Azerbaijan if he determined that working through NGOs and private voluntary organizations (PVO) was not sufficient to meet needs.

By any index, this was clearly the case. American relief NGOs such as the International Rescue Committee (IRC) had been obliged to leave their medicines and emergency foods under tarps in open fields and on the street because--surprise!--all warehouses in the post-communist country belonged to the Azerbaijani government. When Baku then donated the use of free warehouse space--thus removing itself from direct contact with the IRC, in accordance with 907--the IRC could not repair leaking roofs because governmental permission was required to do so. Even more bizarre was the fact that American NGOs, most of which receive at least some funding from institutions like the Office of Foreign Disaster Assistance, could not even coordinate their activities with European NGOs and international organizations such as UNICEF because all those organizations, quite reasonably, tried to coordinate their relief activities with the diverse governmental health organizations and ministries. Given such administrative antics, it is understandable that one Azeri refugee told a virtually nonplussed New York Times reporter on the scene: "You Americans are strange people."

Meanwhile, Armenia--and thus, in the real world, Karabakh--has become, after Israel, the single largest recipient of American aid per capita in the world. Since 1992, some $600 million in official American assistance has reached the former Soviet republic, not to speak of the massive amount of support sent privately through the Armenian diaspora in North America and elsewhere.

Again, there is nothing secret about this. "Through December 1993, the U.S. provided about $305 million in humanitarian assistance and $30 million in technical assistance", says the Armenia and Karabagh (sic) Factbook, published in 1996 by the Office of Research and Analysis of the Armenian Assembly of America:

"For FY 1995 Congress passed a $75 million soft earmark (Congressional Recommendation) for Armenia in the Foreign Appropriations Bill. However, total expenditures for Armenia from all sources in FY 1995 were $140 million. For FY 1996 Congress passed an $85 million hard earmark for Armenia in addition to $15 million for a Transcaucasus Enterprise Fund. The purpose of the enterprise fund is to assist in the development of small business. The above amount was in addition to $30 million to be spent by USAID on development assistance in Armenia for FY 1996."

The most interesting number here is the smallest--the $15 million for the "Transcaucasus Fund." The Transcaucasus region, of course, actually consists of not only Armenia, but also Georgia and Azerbaijan. But the backers of that piece of legislation, employing Lewis Carroll-style rules--viz., words mean whatever I say they
mean--were downright eager to turn a blind eye to the fact that Armenia is in effect taking money that should be divided among all three Transcaucasus states.

While Armenia was receiving its $600 million in American taxpayers' money from Congress, the Clinton administration managed to find a few loopholes in 907 and sent some $90 million in humanitarian assistance
to Baku through the back door, funneling the funds not through prohibited official channels but through NGOs and PVOs. At first, the AAA and ANC were stridently opposed to this and attempted to have the
aid leak hermetically sealed. This was too much for the Washington Post, which on August 1, 1996 decried the impact of the Armenian lobby on American foreign policy and asked why Washington was "comforting the victor" while "punishing the loser" in the Azeri-Armenian conflict over Karabakh.

The response of the AAA and ANC was to broadcast a plea over the internet, asking "friends" to write to the Post and protest the editorial. American-Armenians had nothing against U.S. government aid going to Azeri refugees, the ANC wrote; indeed, it actually approved of the $90 million in "non-governmental" aid that had found its way into Azerbaijan via various NGOs. The 907 rider merely restricted government-to-government aid and, the letter argued, should be kept in place until Azerbaijan meets the requirements set forth to lift it. The Post was soon inundated by letters protesting the editorial. "They're pretty good"’ said one writer, referring to the
organizational abilities of the ANC and AAA. Another staffer favorably compared the mail-in campaign to those mounted by the gun lobby.

The next phase of 907 surrealism occurred about a month later when the new, Armenian-sponsored amendment to 907, put forward by Congressman Porter, was brought to a vote. The so-called Porter Bill conditioned government-to-government humanitarian aid, this time with explicitly political conditions: For every seven dollars in
humanitarian aid sent to Azerbaijan, one dollar of aid had to be sent to Karabakh's far smaller Armenian population. "Everything else being equal--and that means questions of sovereignty, territorial integrity, and everything else--the Porter formula would mean that ten dollars would be spent on every Karabakh Armenian for every dollar spent on an Azeri", said Azerbaijan's ambassador to Washington, Hafiz Pashayev. "And it does not even begin to address the fact that one in seven Azeris are refugees in their own country, while not one Karabakh Armenian can claim that status today."

In the event, "oil interests" (in the words of the American Journal of Commerce) managed to "defeat" the Porter Bill. The IRC need no longer keep medicines under tarps, and Shelter International can actually consult and coordinate with other European NGOs in Azerbaijan. Lest this be thought an Azeri victory in the halls of Congress, all other provisions of 907 remain in force, and Azerbaijan remains an official U.S. aid pariah. When Secretary of State-designate Madeleine Albright suggested in her nomination hearings that the State Department wanted 907 dropped completely, the ANC and the AAA immediately mounted a campaign to express Armenian displeasure. Whether the State Department will advance its case, and succeed in so doing, remains to be seen.

Meanwhile, the Armenian political action committees may be very proud of the effectiveness of their efforts, but they are largely missing the point. If 907 and the related legislation was designed to somehow protect Armenia (and Karabakh) by restricting U.S. government-to-government aid to Azerbaijan, it is doing just the
opposite. It would be wiser for Armenia to contribute to good government in an important neighbor. It is in everyone's interest that those who walk the corridors of power in Baku (and Yerevan as well) learn that democratic pluralism is an inherently good thing, and that it is obtainable through sustained self-help and assistance
from friends. But thanks to 907, the message from the American Congress to all the governments in Azerbaijan that have come and gone since that dizzying day of independence nearly six years