Business Elites of Baku

geleceye deyil keçmişe yöneldilmişdir. Milletin tebietine her iki baxış eyni zemine esaslanır: mill etin deyişmez bir vahid olduğunu, bu deyişmez vahidin Azerbaycanda daime mövcüd olduğunu, ve Rusiya imperiyasının ve Sovet dövle-tinin işqali altına düşdüyünü nezerde tutur. Bu veziyyetden çıxış yolu, belke de, milleti Rusiyayla mübarizede qazanılmış bir tövfe olaraq deyil, Rusiya imperiyası ve sonradan Sovet dövletinin iqtisadi ve sosial strukturlari ile bezen münaqi-şeli bezen ise semereli olan münasibetler neticesinde for-malaşmış bir reallıq olaraq qebul etmekdir. Bele halda sual bir qeder ferqli şekilde qoyulmalıdır: Bakının kosmopolitik enenelerinin qoruyub saxlanılmasının bu gün Azerbaycan mil-letinin inkişafına zerer yox, fayda getirmesi üçün ne etmeli?

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e e e e e e eStadt 183Bauwelt

36.09SUBJECT

Why Baku?Six young authors portray Baku, the wild, beautiful city by the Caspian Sea that has been elec-ted this year’s cultural capital of the Islamic world. Baku has always entertained a diffi cult re lationship to Azer bai-jan, a country that has chan ged its language and script four times during the 20th century.‣ Page 20

www.bauwelt.de25. September 2009, Founded 1910

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WOCHENSCHAU

2 Ein Bauhäusler im Widerstand. Franz-Ehrlich-Ausstellung in Weimar Michael Kasiske

3 Hangar und Abbiegespur. Dornier-Museum in Friedrichshafen | 4 Wiederaufbau und Wirtschaftswunder. Bayerische Landesausstellung 2009 in Würzburg | Licht und Dunkel. Ben-Willikens-Ausstellung in Stuttgart

WETTBEWERBE

10 Tanztheater und Europa-Quartier in St. Petersburg Kristin Feireiss im Interview

16 Forschungszentrum für Maschinenbau und Informatik der TU Berlin

THEMA – BAKU

20 Die Stadt, wo der Wind sich dreht Oriana Kraemer

28 The Role of Business Elites in Baku Anar Valiyev

36 Baku and Azerbaijan. An uneasy Relationship Leyla Sayfutdinova

42 Baku: City and its Time Alexei Muratov

48 Never dissuade from Baku Leyla Khamedova

52 Legacy of Baku’s Oil Barons Fuad Akhundov

64 “Guerilla Islamic Finance”. The Azerbaijani Way Fuad Aliyev

70 Sumgayit: Stadt auf Sand Schafiga Hadjiahmedova

RUBRIKEN

6 wer wo was wann | Leserbriefe | 74 Autoren | Kalender | 76 Rezensionen | 81 Stellenanzeigen

StadtBauwelt 183

Titletext: Baku and Azerbaijan. An uneasy Relationship Editor StadtBauwelt: Felix ZwochAssistence: Brigitte SchultzGuest Editor: Oriana Kraemer

The slightly abrigded English version of Stadtbauwelt 183 “Why Baku?” (six out of eight essays) is only available online. You can download the two missing articles in German from our website: www.bauwelt.de

▸ StadtBauwelt 184 “Reconstruction in Sichuan” will be published 24.12.09

Neue Nachrichten aus China | Anfang August reiste erneut eine multinationale Minidelegation in die Volksrepublik. Ist die Finanz-krise in China angekommen und hat den Bauboom zum Stillstand gebracht? Keineswegs: In Chongqing, der Wirtschaftswunderstadt in Südwestchina, entsteht bis 2012 auf 33 km2 Reisfeld weit außer-halb eine neue Universitätscity für 200.000 Studenten. Alle Stra-ßen sind bereits angelegt, viele tausend, über 20 Meter hohe und über 20 Jahre alte Alleebäume sind gepflanzt und zum Schutz der jungen Triebe mit schwarzen Netzen christoverpackt. In Sichuan, einer der ärmsten Provinzen Chinas, wurden durch ein Erdbeben am 12. Mai 2008 fünf Millionen Menschen obdachlos. Der Wieder-aufbau wird von der Zentralregierung straff organisiert und hat Kritiker auf den Plan gerufen. Wenige Tage nach dem wir Ai Weiwei in seinem Atelier in Bejing besucht hatten, wurde er in Chengdu vorübergehend festgenommen, weil er an dem Prozess gegen den Schriftsteller und Umweltaktivisten Tan Zuoren teilnehmen wollte. Aus dem Erdbebengebiet berichten wir in der nächsten Stadtbau-welt, auf Einblicke in die Arbeit von Ai Weiwei als Architekt müs-sen unsere Leser noch bis Anfang 2010 warten. Red

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Bauwelt 36 | 200928 Subject Business Elites

Urban development of Baku did not receive much attention in the scholarly literature. In fact, no single research was made to understand the urban development and influence of various forces to that process. One easy way to do so would be applica-tion of the existing theories that were championed in the U.S. and European literature. The urban development Baku could be understood through various and often competing theories. Past and current debates are concentrating around the power distribution in the cities and impact of certain groups on urban development. The “pluralist” theory championed by Dahl (1961) would argue that the power in Baku is evenly dis-tributed among the residents, and social elites have limited power because of their limited numbers. Elite political groups exist but they aren’t very powerful and balance each other out, leaving politicians firmly in control. Another prominent the-ory that emerged in U.S. in early of 1980s called “public choice” would say that urban politicians and governing re-gimes in Baku are subordinate to the overall economic princi-ples that force the city to compete to capture new investment and capital. The competitive nature of the cities of the region encourages the business elite to favor new development

projects. The basic logic of the business elites is that successful cities require a local infrastructure that is supportive of the needs of business and economic development (Petersen, 1981). The last and most comprehensive theory that explains the urban development in Baku is called “growth machine”. Ac-cording to that theory the combination of Baku entrepreneurs and urban politicians known as a “growth machine” — a pow-erful, pro-development network of business interests and local politicians - would favor increased economic develop-ment at the expense of neighborhood residents and other vul-nerable stakeholders. (Logan and Molotch, 1987).

Urban development of city after the collapse of the Soviet Union did not differ from other cities of the world. Urbaniza-tion and industrialization of Baku have helped to create social-class structures that are similar in all large cities. Government officials, wealthy businesspeople, and professionals of Baku altogether constitute the urban upper class. The business elite in Baku is very diverse and generally includes large-scale retail-ers and wholesalers, real estate developers, construction firm owners, transportation company operators as well as leasers.

Unlike Baku’s philanthropically-minded oil barons of the 1900s who spent part of their money on enriching the capital’s culture, the business elites of 2009 are only interested in their personal gains – and they do anything for achieving it. Who cares about the city’s future when quick money is at stake? The city, unfamiliar with taking protection measures, tolerates too much of what should never be allowed. For the time being, there is no planning authority, no legislation and no political party pre-pared to confront those powers.

The Role of Business Elites in BakuEssay Anar Valiyev Photography Erik-Jan Ouwerkerk

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StadtBauwelt 183 | 2009 29

Plan of the greater city centre of Baku. Clearly visible is the Içeri Seher fort, the ancient core of the city that has been declared a UNESCO World He-ritage Site. The quarters to the north have been erected during the years of the first oil boom after 1873. In 1901, 51% of the world’s crude oil production came from Baku. During these years, Baku had a higher growth rate even

than New York. The seven city plans show impressively the quick growth of the city area. The green promenade at the shores of the Caspian Sea ranks among the most stun-ning and beautiful in the whole world. To this very day, at least; the erection of a whole lot of gigantic enter-tainment and event centres is planned, the first of which are already under construction.

1806 1822 1854 1878 1898 1918 1920

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Everyday residential street on the northwestern outs-kirts of the city with a view of the first residential high-rise buildings at the begin-ning of the downtown. The Asisbeyov metro station is a place of transition – a zone that is no longer neo-European city nor yet Asiatic desert; a transport hub where the minibus terminal of the Mashrutka shared taxis and multi-lane high-ways form a seemingly inex-tricable tangle.Along the arterial road to Sumgayit, illegal residential townships stretch for miles. They are inhabited by civil war refugees from Nagorno-Karabakh and migrants from the country, who seek refuge from poverty in the city.

Next spread: Hoarding decora-ted with architectural nostalgia – objects of real-estate specu-lation on hold.

Growth Machine Baku

The business elite of Baku has been expanding since 1990s as a result of government attempts to introduce market econ-omy. Unfortunately, there is no valid statistics to measure the number of percentage of business elite in Baku or even the percentage of upper class. City’s development is dominated by small, parochial elite whose members have business or profes-sional interests that are linked to local development and growth. These privileged groups use governmental authori-ties and private funds as tools to boost economic development and thus strengthen their own business interests. They turn the city, as active, dynamic units, into instruments for accom-plishing the growth goals that will enhance their fortunes. The city becomes, for all intents and purposes, a „growth ma-chine.“ In this sense, Baku is a growth machine that helps make it possible for business and commerce to expand, for the labor force to increase, and for land resources to be put to more intensive and widespread use. The growth machine of Baku is interested in concentration of economic resources in the downtown area. This strategy called corporate-center strategy focused on the new commercial and residential development in downtown. This strategy was in its heyday under the ad-ministration of current mayor Hajibala Abutalibov who fa-vors extensive construction.

As in many other cities the business elites of Baku, were trying to make money from public spaces and increase the intensity of economic activity occurring within one’s land. Business elites soon understood that it is better to have a thousand apartment units on a given square kilometer of land rather than a park of an all day restaurant for ordinary people. Since high level of economic activity, for example such as bank, fi-nancial corporation or plaza, gives higher rent than a single-family house, the elites struggled to push for development in their areas. Huge investments into the tourist industry and in-tents to turn Baku into the one of tourist destinations of the re-gion are one of the strategies used by business elite. Despite the geographical constraints the business elites of Baku try to lure the foreign tourists by massive investments into tourist attractions or futuristic projects.

One of the examples of such project is the gleaming futuristic looking Full Moon Hotel that has been proposed built in Baku. It is planned that the hotel will 382 rooms spread across 35 floors and 104,182 square meters of space. The Full Moon Hotel will sit on a wavy podium with two apartment com-plexes at either side, named, quite fittingly, Palace of Wind 1 and 2. Another phantasmagoric project is construction of hotel called Crescent that was designed as a counterpoint to Hotel Full Moon, with its column supports being disguised by its arched façade. The two hotels will be joined by three tall residential buildings and a fourth 43 floor office building standing 203 meters tall. Designed by Korean firm Heerim Ar-

chitects & Planners the projects looked unrealistic and would not get attention of the world press unless Baku was not bid-ding for Olympic Games 2016.

In July of 2007 Chingiz Huseynzade, chairman of Azerbaijan‘s National Olympic Committee has announced that Baku plans to bid for the Olympics. Initial studies suggest that the cost of hosting the 2016 Summer Olympic Games may be $20 billion that would be financed from the oil revenues and investment of private corporations. By that time Azerbaijan had built 13 new sporting complexes in order to bolster Baku‘s 2016 Olym-pic bid. Twenty-three other buildings were currently under construction and scheduled to finish by 2008-2009 . It is not surprising that Azerbaijan decided to bid for such event along with global cities as Madrid, Chicago, Tokyo, Doha and Rio de Janeiro. Baku’s business elites has long maintained a tight grip on the country‘s Olympic Committee and other sporting or-ganizations, which are seen as a rich source of potential profit and international prestige. But poor infrastructure of the city did not allow Baku to win the bid and its candidacy was elim-inated in June of 2008.

Dubai as Model?

Despite the lost, Baku made headlines and was able to get in-ternational attention that was good enough for business elites. It allowed elites to launch another ambitious project that is construction of $6-billion „carbon-neutral“ luxury resort on a Caspian Sea island near Baku. Located nine miles off the coast of Baku, Beyuk Zira Island, known to Azerbaijanis as Nargin, is a rock-strewn clump of territory. Once known us the concen-tration camp during Stalin’s regime, the island does not have any infrastructure. Fog cloaks this windswept, treeless island most of the time. A ferry or helicopter is the sole means of transport. Aside from stray dogs, the island is empty, cluttered with the remains of about 100 ruined military buildings, some bearing Russian-language graffiti and Soviet work notices. A solar-battery-powered lighthouse still functions to guide ships into Baku’s bay.

The company financing the project, AvroCityHolding, has struck a deal with the Copenhagen-based architectural firm Bjarke Ingels Group, known by the acronym BIG, to lay out 300 villas, a golf course, an undefined number of hotels and entertainment facilities, and a beach on the one-square-kilom-eter island. The resort will feature seven glass and metal struc-tures modeled after the seven peaks of Azerbaijan’s northern mountain range on the border with Georgia. An assortment of solar heat panels, photovoltaic cells, wastewater and rainwa-ter collection systems and an offshore wind farm will elimi-nate all carbon emissions on Zira Zero Island, the BIG website affirms. The main idea behind the projects is the desire of busi-ness elites to capture the flow of tourists coming to the region and make it Las Vegas on the Caspian. The Nargin project also

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fits with Azerbaijan’s aim to market itself as a high-end tour-ism destination.

Attraction of tourists is not the only purpose of the business elites. Successful example of Dubai made the business elites to think about on turning Baku into the business centers of the region. The project proposed by the local business elites is con-struction of Baku-city – 29 square kilometer seaside area desig-nated for business facilities. Baku city is intended for business-men, diplomats, bankers, students and for other people who are looking for spending leisure time. It will not include the housing for employees. Baku city also envisages allocation certain lots of the land under construction of the campuses for universities. Currently, most of the universities are located in downtown or close to the center of the city. Thousands of stu-dents pour into the downtown overcrowding the center. The logic of business companies is understandable. By brining the universities from downtown to the outskirts of the city they would divert the flow of the people and ease the pressure on transportation and other systems of the city. Meanwhile, the business elites could swap the newly building campuses fro the property of universities in downtown. Thus, by selling downtown property or constructing new business centers in downtown, they would be able to return their investments.

The World’s dirtiest City

The rapid development of Baku coincided with the oil boom and influx of investments and people to Azerbaijan. The out-standing growth of Baku in 1990s and 200s has been the result of large-scale migration of people from rural areas to the cities. In 1991 approximately 50% Azerbaijan’s population lived in urban areas, which continued to grow rapidly. By unofficial es-timates over 2 m people moved to Baku since 1995. However, majority of migrants were lower-class people from the villages and were not able to find affordable housing. The business elites needed the cheap unskilled workforce. Thus, the elites and government officials were closing eyes or even encourag-ing emergence of temporary shelters on undeveloped land on the outskirts of Baku. These squatter settlements were called gejegondu like gecekondu in Turkey.

Overpopulation is one of the major problems of Baku. The in-frastructure of the city can not match the growth of the city. Baku city is not only accommodating the people from Baku it-self but several other regions of Absheron peninsula as well as two other cities Sumgayit and Khirdalan. Because of over-population and absence of control over territories adjacent to Baku, construction of houses in suburbs became erratic. In re-sult, 4 m people currently use infrastructure that was sup-posed to accommodate only 2 m. That catastrophic situation affected the environmental situation in Baku. In 2008 Forbes published an article citing Mercer Human Resource Consult-ing‘s 2007 Health and Sanitation Rankings of cities. So accord-

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ing to that ranking Baku was cited as the most polluted city among 215 monitored cities. Fetid water, oil ponds and life-threatening levels of air pollution emitted from drilling and shipping land made Baku the world‘s dirtiest city.

Growing demand for new apartments has turned the city into a huge construction site. More than 500 new high-rise towers have „sprung up like mushrooms after rain,”. Yet, the majority of the city’s residents are complaining that the mayor’s office neither follows basic principles of urban planning nor pro-tects historic buildings, which are being destroyed by profit-seeking companies. Several politically-active parties and groups were expressing their concerns over the course of urban development. For example Party of Democratic Reforms organized two roundtable discussions on this topic last week, inviting well-known politicians, economists, engineers, and members of the intelligentsia.

“Our interest in this problem is connected to the horrible con-dition of the city. I mean the changing face of Baku, and to be honest, the changes are not in the right direction. I mean dan-gerous conditions of the city center and the destruction of the historic monuments, which created the image of Baku,” says Asim Mollazadeh, chairman of the party and a member of par-liament . The former head of Baku’s city construction depart-ment, now “honorary architect of Azerbaijan,” Emil Akhun-dov agrees with this statement. Speaking at the Party of Democratic Reforms roundtable, Akhundov said that the com-panies are using substandard materials to make concrete, and do not check the quality of the cement. In addition, he noted that there is little time allocated for the floors to set before the next one is constructed . In April Akhundov summed up his opinion of Baku’s mayor with a phrase now often repeated: “Every minute that Hajibala Abutalibov, who is guilty in the destruction of the city, spends in his position equals death”.

The interests of business elites very often go against the pub-lic interests. Thinking only on maximizing their income, the business elites forgets about the Baku’s heritage. Using above-mentioned debates, we could say that public sectors of Baku is drawn into the business orbit of influence, and business elite would use their own power and support from the government to pursue as much exchange value of the land as possible: every piece of land would be taken over by business elite for more profitable use accordingly, little space would be left for urban preservation. On July 17, 2008 Turan News Agency re-ported that an historic building, across from the downtown seashore park, was being torn down to make way for construc-tion of a new skyscraper. The building had housed health-care workers and was built 100 years ago. Turan called this act “an-other architectural ‘surprise’.”

The destruction of ancient buildings, especially in the UNESCO-protected Walled City, which dates back to the 14th

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century, has raised many eyebrows among both experts and ordinary citizens. In addition to the damage to the Walled City, Baku’s distinctive amphitheater design is also being de-stroyed as many skyscrapers rise and tower over the down-town area, where property prices are the highest. Unregulated and chaotic construction has already significantly worsened the traffic jams in the city, as many roads are closed to accom-modate construction cranes. The situation with traffic became so bad that President Ilham Aliyev personally decided to take care of the issue and ordered the construction of nine new overpasses in the city. However, these bridges are being built in the outskirts of the city and therefore will not resolve the traffic jams downtown.

Another point of concern is the structural integrity of the new skyscrapers constructed by business companies. Buildings in Baku, which is located in an active seismic zone, need solid foundations built to precise standards, especially in terms of the quality of the construction materials. Yet many construc-tion companies, eager to maximize their profits, often pur-chase cheap, low-quality construction materials. According to Bahruz Panakhi, head of the department of seismology at the National Academy’s Research Institute on Geology, an earth-quake measuring 4.5 on the Richter scale could destroy the city.

City Planning without Masterplan

One of the major points of concern is the absence of a Master Plan. No city in the world can develop properly without such plan. Such plans must be based on a series of thorough stud-ies in relation to the actual rate of city growth. The Master Plan should offer solutions for the city‘s infrastructure in many spheres, including transportation, communication, util-ities, housing, commercial activities, and public spaces. The City Master Plan defines Zoning Ordinance requirements for various types of activities, in relationship to residential, com-mercial, public services, and industrial sectors. It determines and differentiates between the populations densities for land use. It anticipates the complex needs of future growth and de-velopment.

It is absolutely mandatory for every modern city to have a Master Plan as a blueprint for its current as well as future de-velopment. The first Master Plan for Baku was designed in 1924. Actually, Baku was the first city in the USSR to have a Master Plan. The last Master Plan was designed and introduced in 1984 and expired in 2005. After the country became inde-pendent, the city with a new governmental structure and a new privatized market economy requires a service sector, in-cluding banking, insurance, transportation, shipping, air-ports, terminals, business and commercial projects, housing and mixed-use developments. This infrastructure requires many new buildings: hotels and restaurants for the tourism

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industry, shopping centers, business centers, communication centers, sports facilities, conference centers, etc. A new Master Plan must address the needs of a market-based society, espe-cially needs created by economic and population growth.

For example, in Baku there are still no guidelines in place re-garding parking requirements in new buildings, not even high rise buildings. The concept of parking inside a building is still so new that one city building official recently told a foreign developer that it was dangerous for cars to be parked in ga-rages underneath the building! With the recent multiplica-tion of cars in Baku, traffic and parking is already an issue, and will soon become a more serious problem. For the last four yeas the Baku was developing based on the outdated Master Plan that did not envision overpopulation of the city and rapid construction boom. Without a master plan in place, Baku‘s de-velopment proceeds in an unorganized fashion. Right now, each builder acts according to his own ideas and needs-a situ-ation that is likely to create major problems for the future. In fact such situation favors business elites. Without proper plan and zoning ordinance requirements, the business corpora-tions can construct any type of buildings anywhere in Baku.

Catapulted by a market economy, major commercial and resi-dential projects have developed at an extraordinary pace. Con-struction and development have been so rapid that existing legislation, inherited from the Soviet past, has not been able to keep pace. This is especially true in terms of the municipal ad-ministrative bodies, city ordinances and the establishment of various active architectural and planning commissions and other crucial public services governing bodies.

Corruption and Absence of Control

Another problem is an absence of Department of Building and Safety (DBS) that could control and regulate all construction works. This governmental agency could ensure the safety of its citizens by issuing the Building permits for construction of new facilities and inspecting the ongoing construction sites. However, the presence of such agency would have increased the cost of construction. Baku officials were reluctant to create such department fearing that business elites would get upset with the increased cost of construction. The tragedy, neverthe-less, did not wait. On August 28th 2007, some 20 construction workers, rural migrants from outside Baku, were killed when the nearly completed building on Mukhtarov Street in the capital’s Yasamal neighborhood, one of hundreds of structures erected amid a seven-year building boom, suddenly imploded, sending tons of debris crashing to the ground.

The Ministry of Emergency Situations has attributed the cause of the collapse to uneven foundations and low-quality construction work. The director and three managers of Mutefekkir Company, the firm responsible for the building,

are under arrest. On September 5, the head of the Baku city government department for apartments and cooperative buildings, which oversees such construction projects, was also taken into custody on abuse-of-power charges. The tragedy has intensified a longstanding debate about the government’s ability to uphold construction safety standards - a critical question in this earthquake-prone city. Deputy Prime Minister Abid Sharifov, who heads a government commission looking into the building’s collapse, told reporters on August 31 that Mutefekkir Company had permits only for the building’s de-sign, not its construction. A day earlier, Baku City Prosecutor Aziz Seidov revealed that the building’s foundation had been designed to support only nine stories. In addition, approval for the final design plan was never given.

The collapse revealed numerous problems in construction business and depth of the problem. „You need authorization from up to 40 government bodies to begin the construction of a building in Baku. If you start construction of a garage in your courtyard without proper permission, it will be destroyed by bulldozers the next morning. How is it possible to build a 16-storey building in the city center without authorization?“ commented Rauf Mirkadirov, a political columnist of Zerkalo newspaper.

According to Emil Akhundov, the former head of Baku’s main construction department, the „chaos“ exists in the city’s urban planning. Companies, he alleged, do not follow construction specifications, use sub-standard materials as substitutes for those in short supply and hire untrained laborers for jobs that demand a high level of building skills. „There is no other way, but to stop all residential building in Azerbaijan until order is restored in this sector,“ he said. With over 1,200 new buildings approved for construction since January 2007, the chances of another tragic collapse would appear to be high. It is hard to predict the course of urban development for Baku. But one thing is clear that the necessary steps must be undertaken in order to preserve the heritage of Azerbaijan’s capital.

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Without hindrance by develop-ment plans, zoning regulati-ons, or use plans, project de-velopers in Baku build what they want and wherever they want. For example here, on the unused site behind the Azer-

baijani State Circus in the Na-simi quarter in the utmost north of the greater downtown area. The small-scale buildings extant from Soviet or post-So-viet days are readily cleared away.

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Bauwelt 36 | 200936 Subject An uneasy Relationship

In late fall 2008 Azerbaijan‘s public was shaken by a heated de-bate over an interview that Rustam Ibrahimbekov, a promi-nent writer and film director, gave to a Russian newspaper Pravda. In the interview, Ibrahimbekov, a native of Baku who has been living in Moscow for the last forty years, lamented the dissolution of Baku urban identity and culture. He stated that Baku has changed irreversibly after half of its 1,5 million urban population left in early 1990s and were replaced by peo-ple ‚unprepared for urban life‘. According to Ibrahimbekov, this was a catastrophe. Not only did it lead to the disruption of ‚normal rhythm of urban life‘ and the dissolution of ‚bakintsi‘, the original Baku population that possessed its own unique worldview and lifestyle, but for the country as a whole this meant the breaking of the elite recruitment mechanism. Previ-ously the elite was recruited from this urban group, but now those who are left of the old ‚bakintsi‘ (bakuvite) population are being pushed out to the margins of social and public life.

This interview received very controversial and passionate re-action. Next day, a hearing in Milli Mejlis, Azerbaijan‘s Parlia-ment was held, where Ibrahimbekov‘s views were described as ‚dangerous‘; he was even accused of an insult against the whole Azerbaijani nation and was requested to apologize. The parliamentary hearing thus added a serious political dimen-sion to the comments, and started yet another debate – on whether the Parliament should have gotten involved to begin

When it comes to nation and national consciousness, the Azerbaijani society is split in two camps. The question is whether ethnic or civic prin-ciples should form the basis of the national identity.

with. For a month, politicians and intellectuals, Ibrahimbek-ov‘s opponents and supporters had discussed his views and each other‘s responses to them. The passions were so high that at times the discussion became personal. Ibrahimbekov him-self gave several new interviews and wrote a number of arti-cles in which he gave lengthy explanations of the original rather brief comments. Even taking Ibrahimbekov‘s personal-ity into consideration – he is a popular and well known writer, a Chairman of Cinema Workers‘ Union in Azerbaijan, an author of scripts for a number of award-winning films, in-cluding one Oscar winner – the reaction may seem exagger-ated: after all, this was a private opinion of a private person, al-beit a rather famous one. Yet, for Azerbaijan, this debate revealed the significance of the issue that was at stake: the leg-acy of Baku urban culture and its relationship with Azerbai-jan‘s nationhood.

Indeed, the Ibrahimbekov debate, as I shall call it here, only made public the controversy that had been a matter of more low-key discussions for years. For the most part these discus-sions have been private, taking places in people‘s homes where they take form of nostalgic reminiscences of the good old days in Baku. At the same time there is also growing number of publications in newspapers, magazines, and online forums, that try to make sense of the place and role of Baku in huge transformation Azerbaijan had undergone following the

Is it really so unusual that the characteristics of a capital city are considered the basic traits of the whole country? May one speak of a “Nation of Baku” to summarize the voluntary and forced coexistence of many ethnic groups? Azerbaijan has never been a nation – neither under the tsarist nor the soviet regimes. Since the country’s independence, many people seek for a national identity as the culture of Baku is in-evitably lost. An Azerbaijani writer and film-maker asks unwelcome questions.

Baku and Azerbaijan. An uneasy RelationshipEssay Leyla Sayfutdinova Photography Erik-Jan Ouwerkerk

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Baku predominantly a Russian-speaking city. By the middle of 20th century a hybrid Baku urban culture, a product of this complex policy making and local traditions of intercommu-nal accommodation emerged. This culture included its own code of behavior that distinguished ‚bakintsi‘, the Russian term for bakuvites, from outsiders, both from rural migrants and from newcomers from other cities of the Soviet Union. From rural migrants bakintsi were distinguished by their urban manners, higher level of education, and fluent com-mand of Russian language; from other newcomers by their emotionality, warmth, respect for the elders, hospitality, ap-preciation of good food, traditional gender roles, and, above all, pride in Baku‘s multi-ethnicity. Sometime in 1960s this sense of urban identity that transcended ethnic boundaries was expressed with a popular catch phrase ‚a nation of Baku‘.

Bakintsi also developed their own distinctive intellectual and cultural elite. The cultural production of this elite was by def-inition hybrid, and proud of it. Thus, musician Vagif Mustafa-zade, the father of Aziza Mustafazade who now lives in Ger-many, became known for his merging of Azeri traditional mug-ham with jazz. Writers such as Rustam Ibrahimbekov and his elder brother Maksud romanticized Baku in their fiction – in Russian. Muslim Magomaev, the first Soviet singer with star-like popularity, Harry Kasparov, world chess champion, are some of the most known representatives of this Baku cultural elite.

collapse of Soviet Union. So what exactly is this controversy about? Why Baku urban identity is so problematic for Azerba-ijan‘s nationhood, and why does this topic raise so much pas-sion?

In Soviet times, Baku, like Odessa or Tashkent, was famous for its cosmopolitanism, or, in Soviet terminology, ‚international-ism‘. The emergence of this cosmopolitanism/ international-ism actually began in pre-Soviet times, when Baku as a center of Russian Empire‘s oil industry attracted many people from different parts of the empire. This large settled population was diverse not only in terms of ethnic background, but also in terms of occupation and class: it wasn‘t only the workers for the oil industry who migrated to Baku, but also merchants and intelligentsia. Yet it wasn‘t until the Soviet period that Baku‘s heterogeneity became celebrated – as a case of true ‚proletar-ian internationalism‘. Baku‘s multi-ethnic population fit per-fectly into the official Soviet framework of ‚merging of na-tions‘ and of creating a ‚Soviet person‘. And as this ideological constructs suggests, what was celebrated in Baku‘s cosmopoli-tanism was not simply a mixture, but rather a hybridity. Soviet authorities did encourage further ‚internationalisation‘ of Baku, through a restricted migration policy that favored highly skilled labor from other urban centers outside Azerba-ijan over unskilled rural migrants from Azerbaijan‘s country-side, and through education and cultural policy which made



Disguised entry to the under-ground car park of a new, postmodern-historicist buil-ding in the Old City.

Requisites of a mobile pho-tographer at the Fountain Park, the meeting-point of lovers.

However, this celebrated and romanticized hybridization was not as harmonious a process as many bakintsi believed. It was not rooted only in the goodwill and tolerance of Baku resi-dents, but also in state policies such as migration restrictions and Russian-led internationalism. And finally, in Baku, which was a capital of a national republic, these policies came into contradiction with the counteracting policy of nationaliza-tion and indigenization. The contradictory character of Soviet policies was revealed in late 1980s with the beginning of Kara-bakh conflict. Despite the celebrated internationalist tradi-tions the interethnic strife affected Baku as well as other parts of Azerbaijan. Soviet migration policies proved ineffective in the conditions of a military conflict, as people displaced by the armed conflict in Azerbaijan‘s regions migrated to Baku. Many of the old urban residents began to flee from the city. First were Baku Armenians – nearly all of them fled the city follow-ing the interethnic strife. They were followed by many Jews and Russians, and also by many mixed families and ethnic Az-erbaijanis who constituted the core of bakintsi. This was not all about ethnic relations – the restructuring of Soviet econ-omy was another important cause of this large-scale migra-tion, as deindustrialization left many skilled Baku residents under- or unemployed. But together these complex social, po-litical and economic transformations had led to a dramatic change in the composition of urban population of Baku – a change to which Ibrahimbekov referred to as ‚a catastrophe‘.

After Soviet Union collapsed and Azerbaijan acquired inde-pendence those long time residents who remained in Baku began the process of re-evaluating the changes that took place in their city. There exists a broad agreement that the old cos-mopolitan/internationalist Baku is gone and lost forever; yet the evaluations of this loss are varied. On the one hand, there exists nostalgia and romanticization of the past. In its ex-treme, this nostalgic approach sees Baku‘s cosmopolitanism/internationalism as harmonious, conflict-free, symbiotic ex-perience of cohabitation and hybridization, a kind of ‚Golden Age‘ from which the city had now fallen. Many of such nostal-gically minded people reject nationalism in all forms; on the other hand there are those who do not see a contradiction be-tween nationalism and Baku culture, but uphold the view that in Baku national identities were harmoniously complemented by a trans-ethnic urban one. Stories are told about old Baku courtyards where people of different ethnic backgrounds lived together, celebrated each other‘s holidays and helped each other in difficult times, about friendships and love affairs across ethnic boundaries. Such nostalgia and lamentation over the lost Eden of their youth is also very common among emigres from Baku and can be observed in the numerous on-line communities of Baku people. Yet, overall, this attitude seems to be on the wane, and is mostly found among older generation of Baku residents. But even among the most nostal-gic bakintsi there sometimes exists a kind of embarrassment



for little and superficial knowledge of one‘s own ethnic cul-ture, be it Azeri, Armenian or, to a lesser extent, Russian.

On the other hand, there is also a rejection of the ‚myth‘ of the golden past, where the narratives of peace and harmony are seen, at best, as ideological constructs imposed by the Soviet authorities, and at worst as outright lies. Stories are told about discrimination and intolerance that persisted despite the offi-cially promoted ideology of internationalism, and especially of discrimination by Russians and Armenians against Azeris. The cosmopolitan Baku culture is seen in this discourse as a coercive attempt to assimilate and de-ethnicize all ethnic groups that lived in Baku, but especially Azeris. Both of these approaches – the nostalgia and the rejection – have in com-mon a homogenized image of Baku‘s internationalist/cosmo-politan past. But in addition to these two opposing views there are also attempts at a more critical re-evaluation of Baku inter-nationalism which try to de-homogenize the image of Baku‘s past. This approach accepts that there existed both the harmo-nious co-habitation and also domination and discrimination. But for all of these approaches one issue is central: the relation of Baku cosmopolitanism with nationalism. It may be seen as a completely negative thing, a force that destroyed the glori-ous ‚nation of Baku’, or as a positive thing, a justice that was achieved with independence. But either way, Baku cosmopoli-tanism is intricately related with nationalism.

This is the context in which Ibrahimbekov’s interview was re-ceived in Baku. Knowingly or not, he had touched upon a very sensitive issue, and this sensitivity was only heightened by the fact that he made his critical comments in an interview not to a local, but to a foreign, Russian newspaper. Moreover, this newspaper, Pravda, was for many decades the main publica-tion of the Communist Party of the USSR. Thus, the harsh re-ception that Ibrahimbekov‘s comments received is due to a combination of a politically sensitive subject matter, on one hand, and a post-colonial anxiety, a concern with critique made in front of a former metropole, on the other. If we look at the content of Ibrahimbekov‘s criticisms in light of this con-text we can see that the nostalgic overtones are very strong in his attitude. Although Ibrahimbekov does not go to the ex-tremes of the nostalgic position with its denial of nationhood, his view of Baku culture is essentialized and value laden. Baku worldview and lifestyle are seen as positive achievements, and their destruction as nothing less than a catastrophe.

Parliamentarians who condemned Ibrahimbekov‘s views and in general all of his opponents mostly sided with the second approach. They criticized Baku’s cosmopolitan past for not being sufficiently Azeri; in particular, they disapproved of the use of Russian as a predominant language of communication by bakintsi. Another point of criticism was the role of Armeni-ans in the old Baku: the idea that Baku’s lifestyle was destroyed



Hoarding in the Içeri Seher. Till the inauguration of the showroom, hawkers offer car-pets to tourists here.

Discreet advertisement for a hammam in the basement.

with the flight of Armenians was completely unacceptable for Ibrahimbekov’s opponents. This is of course due to the fact that Azerbaijani nationalism to a large extent developed in re-sponse to Karabakh conflict and the relations with Armenia. Ibrahimbekov personally was criticized for not being a truly national writer, and for continuous profession cooperation and personal ties with Armenians despite the ongoing con-flict. But the most sensitive issue for Ibrahimbekov‘s oppo-nents was the problem of elite recruitment. For them, the present days elites are better than the Soviet/Baku ones simply because they are national. In fact, the opponents mirrored Ib-rahimbekov‘s own views: where for him urban Baku culture was positively charged, for them it was the nation; and where for him belonging to Baku worldview and lifestyle was a crite-rion for elite recruitment, for his opponents it is the allegiance to national values.

Interestingly, Ibrahimbekov‘s supporters, at least those who engaged in this public debate, adhered not the nostalgic ap-proach, but to the critical one. They did not outright reject the cosmopolitan past of Baku, but neither did they deny the value of Azerbaijan‘s nationhood. Even when they recalled the lost Baku culture, they simply stated that it was over, and even if they regretted this they did not engage in nostalgic reminis-cences. At the same time they called for a more inclusive and civic understanding of nation, that would be based on politi-

cal community rather than on ethnic domination. According to them, the elites should be recruited based on competence and social responsibility rather than on abstract allegiance to nation.

The debate eventually died out and the two camps never came to terms with each other. Yet it was not in vain, as it brought into the open the controversial views that are present in the society but are rarely publicly discussed. It also revealed that there exists a broad agreement, a value that is shared by differ-ent and sometimes conflicting groups: the nationhood. The value of nationhood is not questioned; it is not a matter of dis-cussion, but the definition of nation is. For some, it means eth-nic nation, and for others, civic one. In the context of this broader discussion of the meaning of nationhood the compli-cated problematic of Baku‘s cosmopolitan legacy boils down to a question that was asked by Rahman Badalov, one of the leading philosophers and public intellectuals in Azerbaijan, in an essay that was published after the Ibrahimbekov debate quieted down: is the destruction of Baku cosmopolitanism a loss or a gain for Azerbaijan as nation?

His own answer to this question, as well as for Ibrahimbekov and many of his supporters and those who share a civic under-standing of nation, is that it is a loss, rather than a gain. How-ever, this question is pointed not to the future, but to the past.



Like both of the existing positions on nationhood, this ques-tion implicitly suggests that the nationhood is something in-herent, something that had already existed in Azerbaijan, but was subsumed under Russian imperial and then under Soviet domination. Perhaps a way out of this predicament would be to see nationhood not as boon that was won from Russia, but as something that was developed in interaction, at times har-monious and at times conflictual, with the political, economic and social structures of Russian Empire and later of Soviet Union. Then perhaps the question should be reformulated once more: how can the cosmopolitan/internationalist legacy of Baku be incorporated into today‘s independent Azerbaijan in a way that would enrich, rather than threaten Azerbaijan‘s nationhood?


Bauwelt 36 | 200942 Subject Baku: City and its Time

By the time it was conquered by the Russians (1800-1810), the territory of Azerbaijan had been under the rule of 15 states, in-cluding the Baku khanate. Even by the standards of the eastern Transcaucasus, which had become the empire‘s ‚exotic periph-ery‘, this was considered a backwater: the residents of Baku not merely had no thought of national or ethnic identity, but in general, as wrote the Azerbaijani enlightener Hasan-bek Zarbadi, ‚for hundreds of years had no idea what was happen-ing in the world‘. Baku might well have remained just such a Caspian Carcasson - remembered only by film directors2 and aficionados of exoticism - were it not for one important cir-cumstance: oil.

The moment when everything changed came in 1872: govern-ment holdings on the River Apsheron were transferred into private hands. This was the starting gun for an oil boom3 which quickly became a construction boom as well. Rapidly enriched oil barons built hotels, palaces, and apartment blocks in styles such as Neogothicism, Neobaroque, Neoclassicism, and ‚Romantic Orientalism‘. The centre of Baku was a mixture of all styles. The city acquired its own opera house, philhar-monic hall, and theatre. Architects were invited from Europe and Russia, with preference being given to graduates of the In-stitute of Civil Engineers in St Petersburg*. The material used to face the buildings - a warm limestone -made it possible to associate Baku with Paris or, in the words of D. Il‘in, a ‚roofless

View from the Park of the Martyrs to the promenade and the bay of Baku. During the last decade, the traditio-nal image of Baku, as consti-tuted by density, zoning, and silhouette, has become unre-cognizable due to unres-tricted real-estate specula-tion.

Photography: Erik-Jan Ouwerkerk

Renaissance‘. Baku was also a new type of urban structure: a city whose development was guided by general plans aimed at creating a regular urban formation with specially allocated residential and industrial zones5. The population surged: its growth rate exceeded not merely that of major European cit-ies, but even New York. At the same time, the proportion of Az-erbaijani‘s steadily declined from 95% in 1872 to 38% in 1913. ‚In the 19th century,‘ writes Rakhman Badakov, ‚Baku became first a ‚Russian city‘, then a city of Russian-speaking ‚interna-tionalists‘ <...>, and in a sense this was both under the Russian Empire and in Soviet times simply a cosmopolitan city <...>‘‘

The arrival of the Soviets gave the process of internationaliza-tion a powerful ideological boost: Baku was to become one of the symbols of the nascent Soviet state. Oil continued to serve as principal ferment of the city‘s development, but the main emphasis was now on improving the lives of the Baku prole-tariat, whose existence prior to the Revolution Gorky had characterized as ‚a brilliantly executed picture of awful hell‘. Here were all the conditions needed for the creation of a model socialist city: a sound economic foundation, a high per-centage of working-class people, a multinational population, and loyal native subjects‘. Three general plans were drawn up over a ten-year period: in 1927 (one of the first general plans in the USSR) under the direction of A. Ivanitsky, in 1932 (by a team led by V. Semenov), and in 1937 (by L. Il‘in and Len-

Unlike other capitals in the former satellite states of the Soviet Union, Baku did not suffer from greater damages by either earthquakes (like Tashkent) or the Second World War (like Minsk). Since the Middle Ages, Baku has been a highly developed city. Its most important landmark, the Shirvanshah Palace, dates, like the Kremlin in Moscow, from the 15th century whereas the Maiden Tower that was erected in the 12th century is centuries older than Moscow’s “chronicle in stone”. In fact, Baku as a town is older than Moscow though both became capitals of their respective countries at the same time.

Baku: City and its TimeEssay Alexei Muratov Photography Sebastian Burger

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city (the Maiden‘s Tower), Baku Art Nouveau (the apartment house of Goslavsky), Stalinist Empire (G. Medzhikov‘s Mu-seum of Lenin), and Brezhnev Neofunctionalism (M. Usey-nov‘s Azerbaijan and Apsheron hotels): all are on show. The second tier is formed by buildings on the edge of the middle terrace of the amphitheatre: for instance, S. Dadashev‘s and M. Useynov‘s Council of Ministers with its veneer of Orientalism or the entirely Corbusier-like Hotel Turist by V. Shul‘gin. Splashes of gardens and parks are an intrinsic part of the pan-orama: under Soviet rule the total area of planted greenery in-creased hundreds of times. In the thick of the fabric of the old city there are impressive ensembles such as Nizami and Fizuli squares, ulitsa Gusi Gadzhieva (Baku‘s ulitsa Rossi), and a kind of local Arbat - an extensive pedestrian zone around a square with fountains. In certain respects Baku has scored firsts not just in the Transcaucasian region (the first metro, the first fac-tory producing prefabricated houses), but in the USSR as a whole (the first attempt at a suspension roof: the Children‘s Cinema; architect: V. Shul‘gin; engineers: N. Nikonov and A. Novosartov, 1952).

Under socialism Baku architecture went through all the grand ‚Soviet‘ styles - all of them compatible with the ‚city of flat roofs‘. By the 1930s, however, it had acquired a character all of its own. The acknowledged founding father of the Baku school was Mikael Useynov (1911-1992), author of a truly fantastic

giprogor). It was here that the first attempt was made to build a system of satellite settlements for workers (designed by, among others, the brothers A. and V. Vesnin). ‚The oil works and especially the growing workers‘ towns cannot but fasci-nate even the most indifferent,‘ exclaimed the French writer and warm friend of the USSR Henri Barbusse. ‚It‘s clear that so-cialism is being built here and is being built for real.‘

When Constructivism was replaced by ‚Stalinist Realism‘, con-struction of‘socialism with a serious face‘ acquired a new di-rection: the emphasis was no longer on systematization, but on the creation of ensembles. The principal objective of archi-tects in Baku was now - and it remained so even after the so-called ‚restoration‘ of Modernism under Khrushchev - to en-sure that buildings were noticeably fine, impressive to look at. The natural amphitheatre of the bay at Baku became a stage for scenery that took the breath away. The harbour was cleared of warehouses, docks, and other structures, and the city turned to face the Caspian with a wide strip of boulevard. Most de-velop ment followed the terrace principle: the height of build-ings was directly proportional to their distance from the sea with the number of storeys increasing as the land rose. The city‘s stalls are prospekt Neftyannikov. From the lavish Rud-nev palazzo8, framed by the blades of propylaea-like hotels, this avenue, following the curve of the bay, turns to the south. The road is built up only on one side - the inner. The medieval

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The House of the Government of the Azerbaijan SSR was de-signed by the architects L V Rudner, V O Munz, and K Tka-chenko from Leningrad and erected in 1934-40. Thecourtyard of the U-shaped mo-numental building with four towers at each corner opens up to the sea while the hea-vily decorated façade shows playful, almost frivolous allu-sions to exoticism and art deco making the building look like an oversized palazzo.

In 1985, the Abscheron Hotel was erected, designed by Mikhail Useynov in the neo-functional style of the late Brezhnev era. Useynov is re-garded as the founder of the “Baku school” of architec-ture that was committed to an abstract and historicist style. His lifelong works con-sist of more than 200 buil-dings, all built in his home town Baku.

number of buildings (more than 200!). As a student, Useynov, together with Dadashev, took detailed measurements of the Palace of the Shirvanshakhs. The knowledge acquired as a re-sult of this painstaking four-year-long labour proved ex-tremely useful when architecture in the republic took a radi-cal turn towards Historicism. The use of exotic arrangements in compositions that were Classical in terms of rhythm and proportions met with official approval. This architecture was ‚national‘ in form, while remaining ‚socialist‘ in terms of con-tent. Initially in partnership with Dadashev and then, follow-ing his friend‘s early death, on his own, Useynov began mak-ing use of elements borrowed from Shirva-Apsheron architecture - floral ornaments, keel-shaped arches, loggias, and stalactite capitals. Demand for this formal weaponry was renewed when Baku came under the influence of Postmodern-ism. By the time Baku received its independence it had not only a fully formed local school of architecture, but all the in-frastructure of a capital city as well. This relieved the authori-ties of the trouble of erecting new complexes of buildings: they simply appropriated what was to hand. Most of these buildings were in the style of‘exotic Orientalism‘ and were well known to Geydar Aliev, once the republic‘s First Secretary and now - as of 1994 - the head of state.

The authorities‘ ‚old clothes‘ proved an ideal accompaniment to the Baku elite‘s nostalgia for the thriving city of socialism. It is characteristic that one of the first steps undertaken by Hadjibala Abutalbov, appointed mayor of Baku in 2001, was to clear the city centre of the kiosks which had spontaneously sprung up in the 1990s, as well as of the impromptu dwellings of refugees and migrants9. This bulldozer campaign was car-ried out under the slogan of returning to Baku the way it looked in the 1970s and 80s. However, measures of this kind cannot turn the clock back. Rather, they remind us of the irre-versible nature of time: a cavalry attack on tokens of the ‚new‘ way of life deriving from the presence of refugees from Kara-bakh can make no impact against the causes of creeping de-ur-banization. Moreover, how is it possible to return the hun-dreds of thousands of native citizens of Baku (Armenians, Jews, Russians, and Azerbaijanis themselves10) - bearers of the spirit of this partly Soviet, partly colonial city - who left here at the beginning of the 90s?

Nor is it at all clear whether the mayor‘s fondness for the past is in keeping with Baku‘s status as the capital of independent Azerbaijan. Nevertheless, what the municipal authorities are doing here may be treated with understanding: after all, with only a small amount of exaggeration, it may be said that the Baku agglomeration is Azerbaijan itself. More than half the country‘s population live here. And Baku is a city which has never played along with anyone else‘s plans: its history and the history of Azerbaijan have developed along trajectories which have by no means always coincided. Perhaps this is why the ‚grand projects‘ intended to embody the new state are

surprisingly modest (in spite of the fact that Geydar Aliev was himself once an architecture student). Independent Azerbai-jan‘s most important memorial, the Eternal Flame complex on the Alley of the Shekhids in Nagorny Park (E.Gasim-zadeh, A.Abdullaev, N.Veliev, 1998) -the burial place of the victims of the events of January 20, 1999“, - is of a size that cannot com-pare with new symbolic buildings in Moscow, Ashkhabad, or even Tbilisi.

Baku‘s restrained approach to monumental propaganda does not, however, mean that money is being spent on regenera-tion: the state of the city‘s roads is appalling and even housing built during the final years of the Soviet period is now falling to pieces. New construction, though, is steaming ahead: Baku is experiencing yet another construction boom. Nominally, the finance is provided exclusively by private investors; and the architects and contractors are private firms too (the large state organizations are in decline and barely manage to keep going on irregular contracts). The role of the authorities in the above process is not explicit, but that the authorities have no part in all this is difficult to believe: ideologically, at any rate, the construction boom is to their advantage since investment of this kind may be seen as proof of political stability. For an oil shelf located in what is generally considered a ‚hotspot‘, this is decidedly important. Hotels, banks, and offices for oil companies are going up at a record pace, but the lead is taken by housing. All construction fevers suppose an increase in ac-tivity on the part of approval-giving bodies. But while move-ment in this direction must be taking place in government of-fices in Baku, there is no sign of it in the city itself. One cannot help wanting to ask what are possibly naive questions: why is new construction work under way at the UNESCO-listed mon-ument of Icheri-shekher? Why is the city‘s silhouette being lit-tered with untidy designs hurriedly put together by Baku‘s clanking state architectural organization? Why is the princi-ple of tiered development being violated?

The principle instrument of urban-planning policy remains the General Plan of 1987. But how to use this plan in practice is something that no one knows: the huge scale of its pere-stroika-vintage projects (total greening of the city centre, for instance) is wholly incompatible with the results of privatiza-tion, and yet failure to comply with the plan serves as a con-venient excuse for frequent dismissal of the city‘s chief archi-tects. Under the current mayor chief architects are changed about once a year. In this situation it might be expected that an active role would be played by the Town-Planning Council. In spite of appeals by the Union of Architects, however, this council has yet to meet for the first time in the present cen-tury. In a city where developers and civil servants determine everything among themselves, architects are superfluous. While everyone talks as if they want to a return to the Baku of the 70s and 80s, in actual fact the city is undergoing radical changes - and these changes come from the bottom as well as

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The contemporary architec-ture of Baku in no respect matches the best buildings from the past eras – from the Middle Ages to Baku Art Nou-veau and Stalinism. Rather, it gets stuck in dull building-industry functionalism suited only to maximizing profits. Thus, the contemporary ar-chitecture forms a rather sombre chapter in Baku’s ar-chitectural history.

the top. The hundreds of thousands of refugees in the city are unaffected by urban culture, of necessity preserving their tra-ditional ‚country‘ ways. Their failure to fit into the new life and lack of‘urban‘ consciousness are potentially explosive. Az-erbaijan‘s recent history shows that it only takes a momentary slackening of the reins for conflicts which have been quietly smouldering to flare up like an almost extinguished bonfire which has been suddenly doused with a can of petrol.

These two antithetical processes (de-urbanization and mass construction) are urgently in need of assimilation through se-lection of a development model that will firstly reconcile and then unite the ‚old‘ and the ‚new‘ Baku. With regard to urban planning, this means adoption of a new and relevant, practica-ble general plan. It seems, however, that the need for such a plan is understood by architects alone. The inertia demon-strated by the authorities may result in Azerbaijan in time re-quiring a ‚new capital‘. The experience of many young states in the 20th century shows that this prospect is by no means merely hypothetical.

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Bauwelt 36 | 200948 Subject Never dissuade from Baku

I am a Bakuvian. I was born here. And ever since I found out what Europe was, I have wanted to leave Baku and everything about it and go on a travelling spree. See everything, try new food, wear cool clothes and go to clubs. I thought Baku was boring. I thought it has not made a decision. I thought it was too small for me, too familiar, too overwhelming. I was a stranger in my own town. I knew nothing about it. For a record, I should say that I did go to Europe, did try new things, and did go to clubs, but I always returned here, to Baku.

You would think you have got Baku figured out. Well, why not? It seems so obvious, so naïve, so simple. It doesn’t have the mysterious aura, does not seem to have many secrets and does not need to be solved. But little you would know that Baku is an “underground” city. I sometimes compare it with a club with a membership card system. You have the access only if you are a member. Of course, you can have a little trip to Icheri Sheher (the old city), go up the Maiden Tower and see the entire city as if it is on your palm, have a walk on the prom-enade and go to Jazz Center. But it is not Baku. I take that back. It is not the real Baku.

In order to escape the obser-vers’ eyes for half an hour, young lovers take the boat out to the Caspian Sea – and back home again, with a view of Baku’s beachfront.

That is when I started my real trip, and not to see the world, but to see my own Baku. We started dating. Literally. I even chose special clothes, applied makeup, and oh my god, wore high heels. Baku was definitely intriguing. Every night it took me to a special place. And then Baku suddenly came to me on an especially boring afternoon, knocked on the window and summoned me out. It was inviting me to a journey, to an ad-venture I would never forget.

We used to have this little old boat on the promenade. If you looked at it, you would never dare ride on it. It was too scary, especially for a person like me, who knows not how to swim. That was our first date. I stocked up with cigarettes, bought water, closed my eyes when I bought my ticket, and still had them closed when I was stepping aboard. But I was not afraid, even a minute, because I knew Baku was near. It would not let me down. The boat trip lasted only 30 minutes, but I decided to take 3 trips in a row. I could not take my eyes off of Baku. It was so beautiful. The sea was a completely different color. The grey buildings that looked so boring suddenly became roman-tic. I felt like a little girl who saw her very first Barbie doll.

All who are born and raised in Baku, some time in their lives want to leave the city – as teenagers, at the latest. There is a lot one cannot but hate: the heavy traffic, the heat, the boredom, the winds in winter. But if one gives the city a second chance, another layer is revealed. Its amphitheatre layout, the feeling of solidarity among the people and their strong sense of tradition prove a very distinct appeal. Our author reporting on the life in her city is convinced: in the end, no one is able to remain indifferent to Baku.

Never dissuade from Baku Essay Leyla Khamedova Photography Erik-Jan Ouwerkerk

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building. The park has a very interesting background. It used to be a park, turned into a cemetery, then remade into a park, and now again a cemetery, the Alley of Martyrs. But a little away from the park itself, there is a beautiful platform. It is a challenge, because you have to go up about 300 stairs to reach there. I always count the stairs, it gives me something to do on the way, but I always forget how many I counted. I spent al-most one entire summer there, shooting the beautiful pano-rama, drinking overpriced tea and looking at people, we were madly in love. It is the first place a person should come to meet Baku. You can see everything. But the most interesting build-ing for me is the one right in front of it. It looks like a crooked circle and has a very small yard inside. I have never seen any-one in that yard and I always wondered if that yard had any en-trance. I always wanted to go there, to see for myself, but never really had the opportunity.

Being born in Baku, almost all of us grew up on the beaches. You just cannot survive the summer in this city if you do not go swimming and sunbathing. Well, it is no Brazil, but it sure has charisma. On the way there, we always saw oil derricks.

We do not have that boat anymore. Instead, people from Asian countries build posh shopping malls and hotels there. To be honest, that boat does not really fit into the modern Baku that we have or trying to have now. It was a goodbye note from the soviet times, but it was history itself. And I always cry when people try to destroy history. The promenade was famous for another reason. It had all the roller coasters. We would watch the Sunday shows on the Russian channel with Disney car-toons and different shows that they had in Disney world and we were all so keen to see it. However, we had our own little Disney land with all cars that rode on electricity. All of the swings looked so dangerous, but they were better. No one has ever screamed as loudly as we did riding on them. We also had a little Venice on the promenade. They had made little rivers inside, and bridges all over it turning that eastern part of the boulevard into a real labyrinth. It was like a journey to a fairy-tale, because you could see all those different heroes from chil-dren’s books.

My parents knew the Baku I had never known, but they al-ways kept telling me about the Kirov Park near the parliament


Bauwelt 36 | 200950 Subject Never dissuade from Baku

On the long quay before the promenade, rules are being observed: the left side is re-served for lovers, the right for fishermen – more or less so, at least.

Scene from an event in the Ali and Nino bookshop in Nizami Street, the street in Baku to see and be seen.

They were bowing to us as if wanting to welcome. The beaches are scattered all over Baku and you can choose whichever you like. My brother and I used to wait for my father to return from work earlier and take us to the beach. It was a 45 minutes’ ride and as getting closer we could feel the familiar salty and oily smell of the sea, see half naked people coming back and aw-fully long throngs, all rushing to jump into the cold water and escape the sun.

Of course, there are a lot of things you just hate about it. You detest the terrible traffic which turns the simple crossing of the road into a life risk. You hate the heat summertime be-cause there are not many trees that you can hide under. You hate the wind in the winter because it will get you anywhere, even if you hide. You hate scarce choice of shops, cafes, book stores, cinemas, and the high prices for everything, which do not really correspond to your salary. But once you are away, all you can think about is being in a long traffic jam on a bus number 106 and again start hating everything about it. It is just like a drug, and the more you are away, the more you want to come back.

People who come to Baku always change. I do not even know why, maybe it is the weather, maybe it is the eastern touch, but they do change. You cannot be rude, unwelcoming, or cold na-tured in this city. After a while, you start noticing that you give more thought to traditions, you stand up if an elder person comes in, you help the old lady carry her bag and carry sweets in your bag just in case you saw a child crying. People coming here understand that they are not alone anymore; they sud-denly become a part of a big family. Historically, we had these beautiful yard houses. About 15 families would live together, share one bathroom, one kitchen. Their children would grow up together. There were Russians, Azerbaijanis, Armenians, Georgians, Jewish living as one. Baku has not witnessed rages of nationalism, has never seen a fight over the tone of the skin or the language spoken.

A lot has changed since the collapse of the Soviet Union. It felt like Baku was a small child and was left without a mother. It had to grow up alone, learn how to walk and make its own de-cisions. Life was chaos, but interestingly that chaos had its own rules. Many mistakes were made, many traditions were bro-



ken, and now Baku behaves just like a teenager which still has not made its mind. We go towards Europe, we want to refresh the way of thinking. Many people accuse the government, many just do not understand the reason for such changes. But Baku is still in a situation where we have to just wait and see. During the soviet times, Baku had been the center of fashion, music, culture in general. Our old school jazz is still a legend. Unfortunately, all the best brains had left, and the new gener-ation had to restart everything from scratch. Sometimes it feels like Baku has no music for the youth. But that would not be entirely true. We create banks, we write music, we travel for new ideas and establish our own little worlds. We even have little “rock”, “rap”, “house” spots in the city.

Very recently, a friend of mine returned to Baku. She had been here on a project, writing about the architecture of Baku. I never understood why exactly she chose Baku, but I adored the way she wanted to know this city. Every time I called her, she was somewhere I had never heard of. She would take the subway and ride to the last station just to see what was there. She would wake up earlier than the roosters to take an empty

bus to another end and go to a capoeira class. I looked at her and felt so ashamed every time. She was starting to know the city better. She knew all the names of the streets and all the shortcuts. But she definitely was an inspiration. Ever since she left, I have been trying to go somewhere every Sunday after-noon and remember at least one street name.

Baku is not a city of maps and tourists. There is no order of shows or places you “just have to visit”. Baku can be different for every person, who comes and lives here. I say every morn-ing in Baku is just like a Christmas morning, when all you can think about is the presents under the tree. Baku has always been the most unpredictable city for me. It is a little bit of this and a little bit of that, a little bit of hot summer sun and a lit-tle bit of nasty windy rain, a little bit of Europe and a little bit of Asia, a little bit of jazz rock and a little bit of folk mugam. Baku cannot be defined. So every morning is a surprise. But I know one thing for sure. Baku remembers every sad smile, every laugh, every tear you have ever dropped, every crazy love, every kiss, every fight, every breakup. Baku is just like a first lover that you will never ever forget.


Bauwelt 36 | 200952 Subject Baku’s Oil Barons

The first Oil Boom in Baku broke out in 1872 with the Russian Royal Decree to denationalize the oil fields and allow the pri-vate entrepreneurs to either own the oil prolific lands in Baku’s surroundings or rent them for long time periods. Enor-mous oil deposits of Baku have been known from times imme-morial. In fact, the first memories of Baku as an urban settle-ment dating back to 969 A.D. and made by the Arabic traveler Al Massoudi contain enthusiastic descriptions of the area’s oil riches. Meanwhile for centuries oil was produced from hand-dug pits and transported to neighboring areas in wineskins by camel caravans. Oddly enough, annexation of Baku by the Russian Empire in 1806 did not change the situation to good, at least in the very beginning. The oil wells amounting to something around 100, were completely nationalized upon the first peace treaty between Russia and Persia in 1813. Mean-while lack of private enterprise, low industrial demand and heavy-handedness on the new administration resulted in huge decline of oil production. This led to some steps aiming at revitalization of the output when the oil wells were offered for rent to private entrepreneurs in 1820. However a very short period of the rent (4 years to be followed by the state reposses-sion of lands) could not add much enthusiasm to the so-called ‘oil farmers’.

The situation changed in 1872 in the aftermath of substantial reforms of the 1860-2 in Russia, when awakening market of

The everyday architectural he-ritage from the time of the oil barons has, hidden from the public eye, survived in Baku. The residences of the bour-geois upper class from the end of the 19th and the beginning of the 20th century still exist though often defaced, disre-garded, and neglected.

the huge empire required more and more oil and kerosene, whereas oil farmers in Baku were not motivated to increase the production unless they owned the oil lands. The introduc-tion of concessions in Baku’s oil industry in 1872 had an effect comparable to that of a genie being let out of the bottle. Oil production boosted 60 times within the following decade, and by 1901 Baku, with its population slightly exceeding 120 thou-sand residents, provided almost 51 per cent of the world’s out-put in crude! The oil boom had a truly explosive impact on the city’s population. A tiny ancient citadel with double rampart and 14,5 thousand residents in 1872, Baku surpassed 143 thou-sand by 1903, 214 thousand a decade later and reached almost quarter of a million by the end of the World War 1. Needless to say, such an unprecedented growth in population brought about an enormous ethnic and cultural diversity featuring Baku for decades to come. E.g. in 1913 not a single ethnic com-munity exceeded 36% of the overall population. The leading communities were the Russians (36%), the Azeris (34%), the Armenians (19%), followed by the Jews (5%, in fact, the larg-est and traditionally prosperous Jewish community in the Caucasus), the Georgians (4,5%), the Germans (1,9%), the Poles, the Swedes, etc. With some of these communities hav-ing a tiny share in an overall population of that-time Baku, one could speak of a true phenomenon of Jewish physicians, German technicians, Nordic engineers and, last but not least, Polish architects.

Baku at the beginning of the last century: Thanks to the oil industry, the city became rich, and certain individuals much more richer. The time of the oil barons had come. Selfconfident tycoons confirmed their status by spectacular philanthropic undertakings: with their grants, the first Muslim school for girls, a mosque, a palace of remembrance, a park right in the centre of the city were built. Legends of love, magnanimity, greed and sheer luck have grown up around those barons’ lives. But all came to an end with the invasion of the Red Army in 1920.

Legacy of Baku’s Oil BaronsEssay Fuad Akhundov Photography Sebastian Burger

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The urban landscape previously dominated by Oriental mosques with minarets piercing the skyline, was featured by Russian Orthodox and Apostolic churches, Catholic and Lu-theran cathedrals as well as a beautiful synagogue designed in a neo-classical style. A noteworthy detail is that the synagogue was built in downtown Baku in early 1900-s on a plot of land provided by the local municipality free of charge. The ration-ale behind this was not to expose the number of Jews residing outside the infamous Pale of settlement introduced by anti-Se-mitic Imperial authorities. Meanwhile the first Oil Boom in Baku had an enormous impact upon the city’s technical and cultural development. The first oil tanker in the world (the Zo-roaster, manufactured by the Nobel Brothers in 1879 and sunken by the Soviets in 1949 to build the bridgehead for the first off-shore platforms in the Caspian also known as “the Oil Rocks” ) followed by cutting-edge technologies of oil produc-tion and refinement were accompanied by the first European theatre in the area (the Taghiyev Theatre, 1883) and the first opera in the Moslem world staged therein in January 1908 (Hajibeyov’s Leyli and Majnoun).

One of the most remarkable accomplishments of that period though, was the foundation of the first secular school for Mos-lem girls in the country. In fact, this was a revolutionary event in what used to be a cleric dominated society. The influence of mullahs (Moslem clergy) was intentionally retained by the Imperial authorities to have a better control over the local population.

That being the case, the very idea of a girl school in that-time Moslem society had to really fight its way through overcom-ing lack of understanding and oftentimes a desperate resist-ance. In fact, if not for the personal courage and perseverance of the school’s founder, Hajji Zeynalabdin Taghiyev, the whole project had a tiny chance to survive. Odd as this may seem, Taghiyev himself was not only an uneducated, but virtually an illiterate newly-rich oil baron. All the more commendable was his endeavor to give education to the Moslem woman as the most oppressed part of the community. Therefore phe-nomenon of Taghiyev as a character deserves a better scrutiny in understanding the rationale of the first secular school for Azeri girls.

Hajii Zeynalabdin Taghiyev (1823–1924)

Hajji Zeynalabdin Taghiyev was among the most remarkable representatives of Baku’s oil barons whose crazy fortunes and endeavors were instrumental in a rapid change of the city’s image. However, among many of his peers Taghiyev was known for something more than just money. Tremendous charity and bold projects in culture and education made Taghiyev a unanimously recognized figure not only among his fellow-Azeris, but among the representatives of other eth-nic groups of local entrepreneurs.

As many other tycoons of the day, Taghiyev was born to a poor family. His father Taghi (whose name became the base for a later adopted Russian-type family name ‘Taghiyev’ meaning Taghi’s son) was a shoe-maker at Baku’s Inner City, whereas his mother Ummi khanum passed away when the boy was around 10. Illiteracy of parents and cumbersome system of re-ligious civil registration among Moslems led to certain ambi-guities in Taghiyev’s birth date ranging from 1823 to 1838. At the age of 12 Taghiyev became an apprentice to a stone mason. His daily salary of 6 kopecks were used to support the family living hand to mouth. By 15 Zeynalabdin had fully mastered the craft of stone dressing, so traditional for Baku known for its impeccable stonework up to day. No surprise that even after amassing a fortune on oil business Taghiyev was person-ally supervising stone masonry of his private mansions.

An accomplished constructor in his 20-s and a contractor in his 30-s, Taghiyev got involved in petty textile trade by the 1860’s. A decade later he was among the first Azeri kerosene dealers owning a small refinery with two boilers. Success in kerosene production led to the foundation of the company styled “H.Z.A.Taghiyev” in 1872, immediately upon introduc-tion of concessions in the local oil business. A fascinating oil gusher that occurred on Taghiyev’s oil field in early 1878 turned his company into one of the leading businesses in the area. By mid-1880’s Taghiyev owned more than 30 hectares of oil prolific land around Baku, two oil tankers, two refineries producing kerosene and lubricants, storehouses and offices in Moscow, Tsaritsyn (now Volgograd) and Nizhniy Novgorod. The overall annual production of crude oil and kerosene was around 1 million barrels. This made Taghiyev’s company the fourth largest hydrocarbon manufacturer in the area equipped with the most cutting-edge technologies of the day. Dimity Mendeleyev, an outstanding Russian chemist and promoter of industry, had a very eloquent comment on Taghiyev’s role in the development of local business: “Hajji Taghiyev should be considered a significant driving force of the oil business in Baku…Operating with caution he managed to survive a number of crises that occurred in Baku and demonstrated a model of success story of a lucrative oil enterprise initiated with a tiny initial capital (in 1863 I knew Taghiyev as a petty contractor) but managed with due prudence and diligence”.

Given such an excellent performance in the local oil sector Taghiyev’s unexpected decision to sell his business looked quite bizarre. In 1897 Taghiyev’s company was traded to the British entrepreneurs. The transaction resulted in foundation of the Society for Production of the Russian Oil and Liquid Fuels in London (also known as Oleum) with the Board of Managers comprising six persons including H.Z.Taghiyev as the company representative in Baku. So Taghiyev did not com-pletely sever his links with oil business. Meanwhile with his business far-sight he could easily foresee the forthcoming cri-sis in oil over-production in Russia whose market was unable

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to absorb enormous quantities of oil produced in Baku. This was exactly the scenario that happened just a couple of years later when the prices plummeted and a number of oil busi-nesses went bankrupt. Taghiyev managed to overcome this crisis due to a merger he made with Oleum.

As the crisis in oil industry declined since 1902, Taghiyev got strongly involved in oil business as co-owner of various com-panies like Anait, Novy Ararat, Anonym, etc. By 1915 when H.Z.A. Taghiyev & Co. was incorporated, Taghiyev’s business was so diversified that one could find his tentacles in virtually any field of activities in Baku, such as textile, power engineer-ing, shipping, fisheries, banking business, publishing, etc. In-teresting as this may seem, the idea of building-up the non-oil sector in Azerbaijan, so strongly advocated by the country’s current government, was actually implemented by an illiter-ate local oil baron who was smart enough not to collect all his eggs into one basket.

Taghiyev’s public and charitable activities should be also hereby mentioned. For a number of years he had been an elected member of the Baku City Duma (the city hall), the publisher of Kaspy (The Caspian), one of the leading local newspapers, and the benefactor of several leading schools in town. Taghiyev’s multifaceted public and entrepreneurial ac-tivities were recognized by that-time authorities. Merchant of the First Guild since 1882, Taghiyev was awarded the title of Real State Councilor pursuant to the Royal Decree of January 25, 1907. This was the fourth highest official rank in the hier-archy of civil titles of the Russian Table of Ranks. Honorary cit-izen of Baku since 1900 , H.Z.Taghiyev was decorated by the Russian Orders of St.Stanislav (2-nd and 3-rd Degree), three golden medals for diligence, Persian Orders of Lion & Sun (1-st, 2-nd and 3-rd Degrees) and the Golden Star of Bukhara (2-nd Degree). This was truly remarkable for a son of a shoemaker whose tremendous fortune was expropriated by the commu-nists in 1920 and name consigned to oblivion for the whole Soviet period.

The Taghiyev Girl School

In fact, what forced Taghiyev to undertake the whole project with the girl school was his deep dissatisfaction with the se-cluded and remote lifestyle of the Moslem community of the day. One of his letters to a high-ranking Russian official in charge for schools in the Caucasus he clearly expressed his feelings: “The isolation of the Moslems and their alienation from the Russian culture is supported by some dogmatic reli-gious principles… with cults and rites of some indigenous Asi-atic nations…What constitutes the very stronghold of these pseudo-religious traditions is seclusion of the Moslem woman and her unawareness of her human rights…What is needed is to bring to the Moslem woman a comprehension of her inal-ienable human rights through school education.”

This far-sighted and eloquent statement was made 52 years be-fore the adoption of the Declaration of Human rights by the United Nations, and was most likely not even written but dic-tated by the illiterate Azeri oil baron. According to Taghiyev, an uneducated and downtrodden Moslem woman was also an uneducated mother. “What could such a mother give to her children?” he frequently asked. Therefore to educate a nation, Taghiyev believed, one should start from girls, as educating a boy produces one educated person, whereas an educated girl means an educated mother and the whole family in future. Foundation of the first secular school for Moslem girls in Baku was an extremely complicated mission for Taghiyev. Apart from enormous sums for construction of the building and hir-ing personnel, he had to overcome concealed reluctance of some officials and desperate resistance of a certain part of in-fluential local clergy. It was only Taghiyev’s enormous perse-verance and profound knowledge of local traditions and men-tality that made his idea a reality with the school’s official opening in October 1901.

The first secular school for Moslem girls in Baku triggered an enormous response in both Russian Empire and beyond. Kavkazski Vestnirk (The Caucasian Messenger) monthly liter-ary magazine enthusiastically reported: “The Moslem girl school fully owes its foundation to H.Z.A.Taghiyev, the fa-mous rich man and charity monger of Baku. A man of a peo-ple, luckily succeeding in amassing a tremendous fortune, this Moslem philanthropist, despite lack of any formal training, has an enormous esteem to education and ardently upholds it. Meanwhile he is vehemently opposed to seclusion of the Mos-lem women viewing it as an impediment for them to benefit from the fruits of culture and education… So grateful Moslem ladies will cherish sweet memories of H.Z.A.Taghiyev as the first person to lead them to emancipation.”

The foundation of the Taghiyev School thrilled a number of editions in the West. The Russian Review printed in Paris placed the whole notice in the chapter dedicated to the Tartars (Azeris): “The idea inspiring a generous benefactor and the struggle he had undergone to make it happen is worth men-tioning hereby: Mr. Taghiyev, a Tartar who got rich due to oil is one of those rare rich men in the area who bestows his wealth to the local community. Among the generous deeds which he is so well known for is the idea of this Mohammedan to establish a school in Baku for young Mohammedan ladies.This very modern, attractive and impressive idea did not pass with no difficulties. The Moslem public opinion required the school to be a boarding institution with no access of men to the school whatsoever, the girls leaving the school exclusively in chadors (veils), and the faculty composed of women only”.

Overwhelming reaction to the Taghiyev school both in Baku and outside was a clear indication that the baby was long over-due. It took more than five years of strenuous efforts for idea

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of the school to develop from its very inception to the festivity of its opening ceremony. The role of Hajji Zeynalabdin Taghi-yev as the school’s founding father needs no comment, how-ever not a baby can be ever brought to life without a mother, and the school had one. This was Mrs. Sona Taghiyeva (1881-1932), Hajji’s second wife, whose role in the school’s founda-tion was almost as important as to that of Taghiyev himself. As it was noted before, with all his bright ideas not only was H.Z.Taghiyev uneducated, but he was just illiterate. His signa-tures at official documents clearly indicate that his strong hands of a stone mason that mastered millions in later periods were much less used to a mere pen. Therefore the role of Sona Taghieva in the school’s coming to being is another indication of an undeniable truth that behind every great man there should be a great woman.

A decade after its foundation the Taghiyev Girls’ School of-fered classes in Russian and Azeri languages, theology, arith-metic, geometry, history, geography, drawing and technical sketching, calligraphy and, needlework. During 18 years of its existence the Taghiyev school became an alma mater for hun-dreds of Azeri women who, upon graduation, returned to their home areas and in later decades, under the Soviets became the founders of similar institutions all over Azerbaijan and be-yond, thus spreading Taghiyev’s ideas of women education all over the region. What is no less important is that many of the school graduates became mothers of outstanding scientists and public figures in the years to come.

Agha Musa Naghiyev (1849–1919)

Agha Musa Naghiyev became another name very familiar to the people of Baku at the turn of the century. He, too, was born into a poor peasant family but managed to become the richest Azeri oil-industrialists of the pre-revolu-tionary city. He accu-mulated his wealth unimaginably fast, although like many of his contemporaries, he began as a cargo handler. He also gained a reputation for being one of the most „close-fisted“ and „greediest“ of all businessmen. Some of the stories about his stinginess have become legends. One incident is often told about a charitable evening party at which Sona-Khanum (Taghiyev) approached him and another man standing nearby and invited them to make a donation for the poor people of the city. The bystander was so deeply impressed by Sona-Kha-num‘s beauty and charm that he offered a sum greater than he had originally intended as he was not such a rich man. Naghi-yev‘s face immediately dropped and he, reluctantly, started looking for something in his pockets and finally offered three miserly rubles. As the story goes, Sona-Khanum was aston-ished and replied, „But, Mr. Musa, „this man has just offered a hundred rubles here. What about you?“ To which Naghiyev replied, „But look whose son he is? He‘s the son of the million-aire! But me? Whose son am I? I‘m merely the son of a poor peasant!“

Despite all these stories, it was Agha Musa Naghiyev who built one of the most wonderful palaces in the entire city and of-fered it as a gift to the Muslim Charity Society. It seems it was Taghiyev‘s insistence that led to Naghiyev‘s final decision to build a huge palace dedicated to the memory of his only son, Ismail, who had died from tuberculosis as even all his millions could not save the life of the child. The building, which later became known as „Ismailiye“ was constructed right next to Taghiyev‘s Female Boarding School.

It took the gifted Polish engineer, I. K. Ploshko, almost six years to complete this masterpiece. Based on architecture of the Venetian Gothic style, it is strikingly similar to the Palazzo Cantarini in Venice as it skillfully combines the European style with decorative Oriental tradition, thus preserving a lit-tle piece of Venice in Baku that is unparalleled in its beauty. „Ismailiye“ witnessed many of the disasters that Baku has suf-fered during the beginning of revolutions, as well as the social and ethnic clashes that followed later on. In March 1918 dur-ing an tragic massacre carried out against Azerbaijanis, the palace was barbarically burnt down by Armenian dashnaks (nationalist revolutionaries) who were supported by the Bol-sheviks (Communists). Only after the Soviets came to power in Baku was the monument restored. It was during the restora-tion that the original Oriental ornamentation and inscriptions from the Quran were replaced with Communist symbols on the front facades of the building. Despite this disaster, „Is-mailiye“ palace lives on and continues to symbolize the spirit of Baku. Today, this building serves as the primary office of Az-erbaijan‘s Academy of Sciences. One would be hard pressed to find another building more gorgeous and impressive.

Another gift from Baku‘s „greediest“ oil - millionaire was the city‘s largest hospital which was built in 1912 and still func-tions today. The building is designed in the shape of an „H“ (Cyrillic „N“) for Naghiyev‘s name. As well Naghiyev was the basic sponsor and trustee of one of the largest male technical schools, Real School, which today has become the State Eco-nomic Institute. The phenomenon of Naghiyev deserves spe-cial study. He became a millionaire unimaginably fast through oil. Fearing that he would lose his wealth as quickly as he had gained it, he began investing in real estate so as to guarantee himself a source of regular income. He built many buildings, each one more elaborate than the next, and became Baku‘s largest landholder. Although most of his buildings were not gestures of philanthropy, today it would be impossible to im-agine Baku without these magnificent architectural land-marks all built by I. K. Ploshko.

And so it is with great nostalgia that we look back at these times during the great Oil Boom when people, even those who self-ishly looked out mostly for their own interests, created such great tributes to the minds and aspirations of men who lived during the last century and of which we are beneficiaries today.

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The „Greening“ of Baku by the Nobel Brothers

Nearly every park in Baku, including the famous Boulevard Park which parallels the seacoast, is artificial. Traditionally, the soils of the Absheron Peninsula on which Baku is situated, are so arid that little grows on its own. The forceful winds that whip off the sea, and for which Baku is so famous, also seri-ously hinder the growth of plants and trees much less the de-velopment of parks.

Even after the „Oil Boom“ of the 1870s when Baku was devel-oping into a huge industrial center and gaining its reputation as „Oil Capital of the World“, the city was suffering from lack of vegetation and plant life. It was only at the end of the cen-tury that the oil barons, working with city authorities, man-aged to do something about the bleak landscape. The „green-ing“ of Baku was an immense and extremely expensive undertaking. First, it required that tons and tons of fertile earth be imported to enrichen the soil quality. To facilitate this, Baku‘s Mayor, R. R. Hoven, supported by the richest in-dustrialists, passed a decree in the 1880s that all ships entering Baku harbors from Iran had to bring fertile soil with them. In reality, it was a kind of „tax“ or „duty“ imposed for the right to use the harbor and load up with oil. Needless to say, within a very short time, enough soil was deposited, and the parks that characterize the city today were developed.

The most magnificent of all parks was the one developed by the Nobel Brothers. Located on the border between the resi-dential and industrial sections of Baku, familiarly known even to this day as „White City“ and „Black City“, it was here that the Nobels built their own residence which they called Villa Petrolea and around which they developed the park. The story the Nobel Brothers‘ involvement with Azerbaijan begins when Robert happened to pass through Baku in 1873 in search of wood of high quality for gunstocks that they were manufac-turing in Russia. As it was too difficult and expensive to im-port the wood from Europe, the young entrepreneur had come to the Caucasus to procure walnut and various other kinds of timber from the virgin forests in the southern region of Az-erbaijan. Enroute, he passed through Baku and witnessed the oil fever which had just begun. Immediately, he saw the poten-tial profitability of oil and dared to invest all his „walnut money“ to purchase a little refinery and a kerosene-producing plant. It took several years, however, to persuade his brother, Ludwig, to come to Baku where in 1879 together they would establish the Nobel Brothers‘ Oil Producing Company. That de-cision resulted in the Nobel Brothers‘ presence being felt in Baku for the next 40 years during which time their company would become the largest oil producer in the region. By 1913, for example, they were producing more than 30 million bar-rels of oil per year. The Nobels sparked a technical revolution in oil extraction, refining and transportation. They developed the first pipelines, first railway oil tankers, first storage tanks,

and many other firsts. Within a very short time, a new indus-trial suburb grew up centering around the Nobel-owned refin-eries. At that time, the view of chimneys and pipes was a sym-bol of progress and mankind‘s achievements. No one was concerned about environment and ecology.

The oil refineries emitted such immense clouds of smoke that travelers used to write that it was like being confined inside a chimney. Even when you go to „Black City“ today, the thick odor of black oil hangs in the air. Sometimes it‘s so strong you can taste it. The situation was much worse 100 years ago. Con-sequently, it‘s only natural that the concept for a park would develop. Ludwig is credited with the idea. Beginning in 1882-1883, the Nobel Brothers began ordering all their empty ships returning from Iran and Lankaran (the southern part of Az-erbaijan) to carry back the best fertile soils available in their holds. With this rich earth, they began cultivating an area of more than 10 hectares (nearly 25 acres). They even brought the well-known European botanist, E. Bekle, who had created many of the parks and gardens in Warsaw to Baku. After lay-ing in the fertile soil, Bekle began importing various plants and trees, many from the Lankaran region, Tbilisi and Batum (Georgia). He paid particular attention to the problems of sym-biosis and the co-existence of these plants. Rare species were ordered from Russia and Europe. In the end, he was able to cre-ate a huge „green ensemble“ of more than 80,000 plants and trees, including many fruit trees, many of which had never been cultivated in Baku.

But as they were nearing completion of their work, they real-ized they would have to solve another serious problem. They needed fresh water as there was none in Baku for irrigating such a large park. Once again Ludwig proved resourceful. This time, he ordered his tankers to return with their holds filled with fresh water from the Volga River. Later on they devised a way from which they could irrigate the area with condensed steam generated in their refineries and routed to the park via special pipelines.

The investment for the park exceeded 250 thousand rubles, an incredibly large sum at that time. It included a clubhouse („Upper House“), a library and residences for the many work-ers. The park soon became a favorite place in the whole city.Despite all the expenses and energy that the Nobels expended on this „green miracle“, it can‘t really be said that it was a phil-anthropic gesture to the city. Despite their having created a huge company, and built numerous cottages and dormitories for their employees, the Nobel Brothers did not construct even a single architectural monument in the center of Baku, unlike other foreign companies such as the Rothchilds or other oil millionaires. Simply, the Nobels created the park in an at-tempt to normalize living conditions and provide a place for their engineers and top level employees to relax. Nevertheless, one cannot but feel somewhat nostalgic for the times when in-

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dustrialists who pursued their own personal aims and pur-poses gave us a legacy of such masterpieces and miracles. For many generations and even to this day, the older Bakuites fondly remember the park which later came to be called Roti-fane and later Nizami (a poet) as one of the most romantic memories of their youth. Today there is a great wish among many Azerbaijanis to preserve the Nobel heritage. The villa, it-self, standing in the middle of the park maintains a solid ap-pearance with its attractive stone façade. The inside of the mansion has been completely gutted and left derelict in need of serious repair. There are dreams that one day the Residence could be rehabilitated and transformed into a Petroleum or a Nobel Prize Museum. There has even been some discussion about establishing an Ecological Center there named after the Nobels committed to the elimination of harmful effects of pol-lution resulting from the extraction of oil on the Absheron Pe-ninsula and Caspian Sea.

Murtuza Mukhtarov (1855–1920)

If the five most prominent businessmen and vivid personali-ties in old Baku were to be identified, Murtuza Mukhtarov, un-doubtedly, would be one of them. Despite being born into a poor family and not having access to formal education, he managed to become a highly-qualified, self-taught engineer and one of the best boring specialists in Baku. His enormous experience and shrewdness propelled him into his own busi-ness in 1890 when he founded what became a substantially sized oil company with two divisions, employing 2,500 work-ers, and which manufactured machinery for derricks and bored new oil wells.

As a prosperous businessman, he became known as the bene-factor and builder of two stately mosques. He built the first in 1907-1908 in Amirjan, a suburb of Baku, where he was born and grew up. To this day, the minarets with their double balco-nies and decorations are very distinct as they rise 46 meters high. The workmanship in stone carving far exceeds that of any other mosque in Baku, the surrounding suburban areas or, for that matter, in the entire country. Many mosques were de-stroyed during the Soviet Period or were converted to other uses such as museums, but the Amirjan Mosque still stands today and is used as a place of worship.

The other mosque that Mukhtarov built was not in Azerbaijan but in Vladikavkaz, a town in southern Russia. While visiting that region, the story goes that he fell in love with an Ossetian noble lady, Liza-Khanum Taganova. But when Mukhtarov pro-posed, her parents refused. It didn‘t matter that he was ex-tremely rich. To them he had not been born into nobility and did not come up to their social standing. In order to prove his honorable intentions, he undertook to build a magnificent mosque on the bank of Terek River. Of course, afterwards, it was impossible for the Taganovs to refuse him.

When Liza-Khanum Taganova moved to Baku, she charmed the city with her aristocracy, refinement and philanthropy. It‘s to her credit that Mukhtarov soon was able to speak English and French. One would hardly have guessed that he had been born of a poor family. The Mukhtarovs were impassioned travelers and toured throughout Europe. Once Liza-Khanum expressed her pleasure with one of the French Gothic palaces she had visited, never suspecting that her husband would use it as a model to design a residence for her. The plans were ob-tained, a few modifications made by the famous architect I. K. Plosko, and the palace was constructed in Baku in 1911-1912. For Liza-Khanum, it was a „fairy tale“ come true. But a great tragedy took place while the palace was being constructed. One of the contractors, Imran Gasimov, a good builder, ama-teur actor and aristocrat, one evening while erecting the statue of a medieval figure on the roof, accidentally slipped and fell to his death. The city was horrified and deeply sad-dened. A week later another tragedy took place when his wife, Rubabe-Khanum, committed suicide. Having no children, the couple had devoted all their attention to each other and after Imran‘s tragic death, Rubaba-Khanom, who was very Euro-pean in outlook realized that either she would have to leave Baku or start wearing the chador, like other Moslem women did at that time. Being unable to leave, and unwilling to wear the chador, she chose suicide-so the story goes. Even today, the statue crowning the palace still stands bearing witness to these two sad events.

Nor did the Mukhtarovs have any children but Liza-Khanum, known for her philanthropy, arranged a boarding school for poor and orphan girls inside the palace. In 1914, the Mukhtar-ovs‘ Palace became the residence of the first Female Moslem Philanthropic Society founded by Liza-Khanum. Together with her husband, she financially supported many of these girls so they could continue their education in Moscow and St. Petersburg. She was also an active member of the Society to Combat Mortality among Children.

As for Mukhtarov himself, he was famous not only for his phi-lanthropy and technical abilities but also for his intolerance to revolutionaries especially Joseph Stalin who had to hide from him at the beginning of his revolutionary activities in Baku. Subsequent history proved that Murtuza Mukhtarov was right in his assessment of Stalin. But times were becoming turbu-lent and Mukhtarov‘s stand against the revolutionaries led to his inevitable tragic death. Shortly before the Red Army en-tered Baku in April 1920, Mukhtarov resisted them declaring, „As long as I‘m alive, no barbarian will enter my house in sol-dier boots.“ But the Red Army soldiers did enter his palace and not only were they wearing soldiers‘ boots, but they rode horseback through the great halls of his mansion. When Mukhtarov saw them, he fired first and afterwards turned the gun on himself. Liza-Khanum was forced to live in the base-ment of this very same palace which had been built for her.

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Deprived of everything she owned, she managed to escape with a diplomat to Istanbul only to be robbed by him. She lived until the mid-1950s. Two beautiful, though tragic, stories of love are woven into the history of this magnificent palace of the Mukhtarovs. During the Soviet period, the Residence took on a new life and character of its own, somehow reminiscent of its past, when it was converted into Baku‘s Wedding Palace. To this day, it continues to serve that purpose and couples come to register their vows and make public their commit-ment of loyalty to one another in this majestic architectural landmark.

The Musician who owned the SOCAR Building

It‘s not an exaggeration to say that Baku at the turn of the last century was an incredibly wealthy city. Thanks to the indus-trial fervor, it was even possible for an ordinary worker to be-come prosperous. Sometimes the process was as simple as leasing a piece of land upon which oil was found. The desti-nies of such famous oil millionaires as Taghiyev, Naghiyev, and Mukhtarov provide witness of such phenomenon.

There have even been examples of oil-gushers in Baku so spec-tacular that they changed the life of their owners overnight. And although much of the oil gushed out on the earth, was wasted and caused serious ecological damage, one gusher was enough to make its owner a millionaire. The story of how Mir-Taghy Mir-Babayev attained wealth in oil is somewhat differ-ent to that of other Oil Barons. Despite his strict religious up-bringing, Mir-Babayev started out as a „khanende“ (performer of folk songs and traditional Azeri mugham compositions). He had a magnificent voice and soon became a much-sought-after mugham singer. Frequently, he was invited to rich Azeri wed-dings where merchants, ship owners and industrialists com-peted among themselves in lavish money on exceptionally tal-ented singers and musicians.

But Mir-Taghy Mir Babayev‘s voice was so extraordinarily powerful that he became the first Azerbaijani whose voice was preserved for posterity on one of the earliest black cylinder wax recorders in Warsaw. According to Manaf Souleymanov, one of our Old Baku historians, Mir-Babayev‘s fate was changed overnight after one of his performances. It so happened that he was invited to perform at the wedding of an immensely wealthy family. He began singing one song after another in re-sponse to the requests from the guests, who showered him with gold coins and bank notes as was the tradition at such weddings. He is remembered as having performed unimagina-bly complicated mugham pieces and as the evening pro-ceeded, one of the groom‘s close relatives was so deeply moved that he presented him with a gift that would change the course of his life. The details are confusing as to whether he was given land with oil outright or rather the sum of money sufficient to buy some.

And that‘s how Mir-Babayev, the singer, got started in an oil ca-reer in 1906,. From the very beginning, production in the field was 92.6 thousand poods of crude oil each year (note: 1 pood is 0.1 barrel). A few years later, production increased to 67,000 barrels a year and by 1912, he was able to procure three large oil fields in the Baku suburbs of Sabunchi and Balakhani and his operation expanded to18 oil rigs, 70 workers and an an-nual output of more 150,000 barrels.

It‘s worth mentioning that Mir-Babayev was also remembered for his philanthropy. He became the primary sponsor of the Transcaucasin Pedagogic Seminary in Gory (nowadays Geor-gia) which was the largest male pedagogic boarding school in the entire Caucasus. Azeri composers, scientists, and political figures of high renown such as Uzeyir Hajibeyov, Muslim Maghomayev, and Nariman Narimanov graduated from this school. Under Mir-Babayev‘s sponsorship the quotas of Azeri students increased. Mir-Babayev also managed to buy one of the most elaborate buildings of the Old City of Baku. Built in 1896 by the architect Sterm, Mir-Babayev used it as his resi-dence until 1920 when the Red Army took over and confis-cated the building. Later it would be designated for offices of the State Department of Oil which at that time was called „Azneft“. Today the building serves as offices for the State Oil Company of Azerbaijan Republic (SOCAR).

Despite the fact that everything Mir-Babayev gained had been achieved because of his magnificent voice, for some reason he felt ashamed of his previous occupation. Perhaps, he felt that singing wasn‘t as serious or reliable as oil business. Stories abound how he used to try to erase all traces of his singing ca-reer by buying up all his records just to smash them. Somehow it seems he wanted to go down in history as Oil King, not Folk Singer.

According to one of the stories that has grown up around him, Mir-Babayev emigrated to France after 1920 where he was re-duced to living in poverty. But even then, so the stories go, he still continued trying to destroy his records. However, some relatives are sceptical of such stories and claim he could hardly have lived too poorly as he had had a hobby of collect-ing diamonds and jewelry prior to leaving Azerbaijan. Unfor-tunately, Mir-Babayev has no children to help set the record straight. Open discussion during the Soviet period about such members of the elite was difficult and even dangerous so that it‘s hard to prove which of these stories is true. In the mean-time, such legends from history of this city prove to be ex-tremely fascinating and bring back memories of what a charming historical place Baku has been in the past. Despite Babayev‘s desperate efforts to remain an oilman, he is still per-ceived as a singer in the memories of Bakuites. Meanwhile, the magnificent headquarters of SOCAR is tribute to the fact, that, although he may not have been the richest oil king, he defi-nitely was the most talented.

In spring 2010, Aschenbeck publishers in Bremen will publish “Stadt der schla-genden Winde – Baku heute”, an illustrated book with photographs by Sebas-tian Burger and texts by Oriana Kraemer.

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Bauwelt 36 | 200964 Subject Islamic Finance

Islam in the Post-Soviet nations for a long time has been out of focus of the Western academia as opposed to the other regions of ‘traditional’ Islam (especially, the Middle East). However, as a result of the collapse of the USSR certain processes that could be labeled as “Islamic Revival” have taken place in new-born “Muslim countries”. These processes coincide with the process of nation-building, which makes its impact more fea-sible. Although Islam was weakened by centuries of the Rus-sian expansion and, especially, decades of “militant atheism”, it could survive and starts to pay back to post-Communist sec-ularism.

During the fifth Islamic Conference of Culture Ministers was held in Tripoli on 21-23 November, 2007, Baku was proclaimed the Capital of Islamic Culture for 2009 and it was decided to hold the Sixth Islamic Conference of Culture Ministers in 2009 in Baku . This symbolic decision has reflected not only the historical roots of Islam in Azerbaijani culture and the contribution it has made to the treasure of Islamic culture, but also recent social developments in this newly-reborn, post-So-viet republic. Republic of Azerbaijan is an active OIC member.

Most business instruments of Islamic finance have their counterparts in the conventio-nal banking business. It is wrong to speak of a grey area or second finance market with respect to Islamic banks; ne-vertheless these businesses involve higher risks as long as the links between those two systems of financing are still weak and not yet consolidated.

Moreover, thanks to extensive international philanthropic ac-tivity by Azerbaijan’s First Lady Mrs. Mehriban Aliyeva, who also happens to be an ISESCO (OIC equivalent to UENSCO) Good-will Ambassador, it has gain recognition in the Muslim world.

Thus it makes much of the sense to declare Baku the Capital of Islamic Culture. But let me tell you that one would hardly find probably more paradoxical capital of Islamic culture than Baku. Heavily secularized by more than 70 years of the Soviet atheistic ideology and anti-religious policies Azerbaijan and its capital do not fully fit perception of traditional Islamic so-ciety, with Shariah affecting national legislation and Islamic rhetoric dominating policies and behavior of social actors. Az-erbaijan is a different case. It is a case of reviving but very weak Islam, which is not encouraged by the ruling elite to dominate public sphere.

Azerbaijan unlike some Central Asian republics and Northern Caucasus region of the Russian Federation could avoid radical-ization of Islamic movements. According to the official statis-

Are Islamic bankers more trustworthy or more reliable than conventional ones? Are banks that claim to adhere to Islamic principles immune to crises on the global market? What is the difference between “Islamic Finance” and “Guerrilla Islamic Finance”? Most people in the Western world know little or nothing about Islamic finance, its prin-ciples and means of conducting business. In the end, it is based on the Islamic princip-les of “halal” (the allowed) and “haram” (the forbidden). An expert in Islam and eco-nomy delivers insight information on the Azerbaijan version of Islamic finance that, for historical reasons, has developed in a quite distinct way.

“Guerilla Islamic Finance”. The Azerbaijani WayEssay Fuad Aliyev Photography Sebastian Burger

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Islam, Azerbaijan has certain traditions to be remembered and revived. However, new independent Azerbaijani republic, de-clared its independence from the Soviet Union in 1991, has mixed record of combining secular democracy and Islamic tra-ditions. Case of Islamic finance is exemplary in this regard.

What is Islamic Finance?

Islamic finance represents a system of financial intermedia-tion that avoids interest-based transactions based on the doc-trine of Islam. These operations are derived from Islamic prin-ciples of halal and haraam. A major feature of Islamic banking is PLS transactions. Modern Islamic banks are of four types: 1) Islamic banks and financial institutions that operate in a fully-fledged Islamic banking system; 2) Islamic banks and financial institutions that work in a dual banking system; 3) Islamic banking activities undertaken by conventional banks; 4) In-ternational financial institutions working based on Islamic principles. The Republic of Azerbaijan despite its more than 90% Muslim population has not been very active in the sense of promoting and developing Islamic banking.

tics over 1300 mosques and 350 religious communities are of-ficially operating in Azerbaijan. In addition, there are a number of informal but active religious groups in Baku and the re-gions. Not significant enough at the moment, given current trends in the Azerbaijani public consciousness and problems with using institutions of a secular democracy and market economy, Islam may turn into a serious option for the future development of Azerbaijan.

Azerbaijan escaped any kind of religious confrontation due to the long history and tradition of tolerant co-existence of vari-ous religions and sects. Being a country with the Shia majority and significant Sunni minority as well as different Christian confessions and sects and followers of Judaism, could be a model of peaceful religious co-existence and collaboration. Moreover, there was already a precedent in the history when Azerbaijan Democratic Republic (ADR), which existed during 1918-1920, was established. In fact, it was a first Muslim repub-lic in the history. It was also the first Muslim country to grant women voting rights in 1918 (before USA and some European countries). Thus, being a pioneer of combining democracy and

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Because loans at interests are forbidden by Islamic law, Islamic financing are always of an investment nature. For that reason, the “Islamic game of chance” is consi-dered the greatest weakness of the Islamic financing sys-tem.

Islamic finance gets increasingly popular even in non-Islamic countries. The countries of the post-Soviet space are not the exception. Recent marketing research show that a new client segment wishing to get products and services within the lim-its of Islamic banking is already formed in the bank market of Azerbaijan. However, at the moment there are no financial in-stitutions which could satisfy their demand. Overall con-straints for Islamic finance in Azerbaijan are as follow:1. The lack of well-defined legislative and regulatory-supervi-sory framework in Azerbaijan.2. Absence of interest-free financial market since all Govern-ment obligation notes are interest bearing, which makes it im-possible for Islamic banks to get involved in these activities.3. Lack of supportive and link institutions, that will serve, pro-vide with advice and consultancy, research and training.4. Lack of well-trained specialists and regulators.

“Guerilla Islamic Finance”

There are some Islamic banking initiatives in Azerbaijan which we label as “Guerilla Islamic finance” – banking activi-ties “hidden” under the forms of conventional banking and thus accepted by the regulators as a result. Of four above-men-tioned types of Islamic banks two are hypothetically applica-ble for the current situation in Azerbaijan: Islamic banks and financial institutions that work in a dual banking system and Islamic banking activities undertaken by conventional banks. Legislation in Azerbaijan does not recognize Islamic finance, Islamic banking and their modes as legally accepted. These terms have not found their way into the hearts and minds of legislators and regulators and into the texts of laws and regu-lations as a result. However, there have been some elements of Islamic finance introduced into the realities of Azerbaijan. These are as follow:1. Activities of Kovsar Bank, which positions itself as an Is-lamic bank.2. Collaboration of local banks (first of all, International Bank of Azerbaijan - IBAR) with Islamic Development Bank.3. Caspian Investment Company

Kovsar Bank

As claimed by the representatives of Kovsar bank its present activity is focused on attraction of finance from legal and physical persons by two basic ways of Islamic Bank: mudaraba and musharaka, and also from the sale of bills of bank which are analogue of sukuk.

All these three forms of attraction of financial means do not contradict the existing legislation of the country. In mushar-aka the client of bank chooses the projects financed by bank, and concludes the contract between bank and the person which performs work of the given project and the investor or the investors participating in it.

In mudaraba investors usually trust their money to the bank, and the latter directs them for the different projects financed by bank. At the sale of bills of bank: the bank issues its bills, and investors under the contract buy bills of bank for the stip-ulated term. On the expiration of this term the bank buys the bills at the price of above than that on which they have been sold. For allocation of the financial means Kovsar Bank uses mudaraba, i. e. purchase of the bills of clients, and musharaka. Another way of allocation is purchase of bills of clients for the concrete term. After this term clients have to redeem these bills at the higher than the initial price.

However, Kovsar Bank is a small, not open to the public bank and not much information could be obtained. According to the experts’ views the bank management may carry out the above-mentioned activities collaborating with the insiders or shareholders. This is a form of guerilla Islamic banking in Az-erbaijan.

Collaboration of local Banks with IDB

There are banks that fund corporate projects in the frame-works of credit lines opened by IDB. The first bank to carry out several Islamic banking operations was International Bank of Azerbaijan (IBA). A few other banks have signed or in the process of completing agreements. IBA allocated 6 million USD through ijarah, ijarah thumma al bai’ and installment sale. These operations do not contradict the Azerbaijani legislation and could be “hidden” under the accepted terms of conven-tional banking.

Ijarah (Leasing) - an agreement between the bank and the cli-ent on which the bank buys due to the involved money, and then leases the equipment on demand of the client. Duration and the size of rent of a rent are stipulated beforehand. The property on the equipment remains with the bank. In other words, the bank sells usufruct (manfa) to the client for inter-mediate term and long-term operations.

Ijarah thumma al bai’ (Hire purchase) - this kind of operation is very close to ijarah except that in this case there are obliga-tions from the client of bank to redeem the equipment by the end of a rent term. Thus, it in advance stipulates, that the cli-ent by the end of a term of rent will redeem the equipment under the price agreed with the bank where the rent paid be-fore by the client is included. The client pays a rent to bank and partially pays cost of the equipment, by the end of the term of rent the client becomes the full owner of an active. Or the client can pay a rent, and by the end of term of rent redeem at bank the equipment under the agreed price.

Installment Sale - the product intended for intermediate term and long-term financing, is convenient both for design financ-ing, and for trading. If to compare to other mechanisms, has

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In 2009, Baku is the de-clared cultural capital of the Islamic world not least be-cause of a certain avant-garde role in combining se-cular rule and Islamic tradition. So, why not now realize the paradox of Guer-rilla Islamic Finance?

similarity with Ijarah Thumma Al Bai ‚ (Hire Purchase). The bank can involve at Islamic financial institutions, or physical, and also at the legal person, wishing to invest the means in the project working and invested within the limits of Shariah, on behalf of the client to buy the goods on its name and „to resell“ to the financed party in view of urgent payments.

Referring to the above-stated examples and according to the existing legislation, local banks can open “Islamic windows” and render bank services and products to the client segment, wishing to be served according to Islamic Banking. However, such a partial Islamic banking does not cover so called “pas-sive” banking operations dealing with deposit accounts.

Caspian Investment Company

Azerbaijan Investment Company and the Islamic Corporation for the Development of the Private Sector established a joint Caspian Investment Company (CIC) on November 29, 2007. CIC uses equity financing modes and deals only with the com-panies that operate in the activities allowed by Shariah. It is hard to say at the moment what kind of activities and in what scope will be carried out by this company. However, since it is not a banking institution it will be easier to implement the in-vestment activities and implement various projects based on Islamic finance. On the other hand, it also means that the com-pany will not be able to render banking services and collect de-posits.

Reasons for the current State of Things

Although most operations of Islamic banking have their ana-logues in conventional banking they do not fit conventionally within existing regulatory frameworks. In general, Islamic banking techniques are riskier than their conventional coun-terparts. Islamic financial techniques are fundamentally dif-ferent form conventional loans, and they should therefore not be subjected to the same prudential regulations and minimal capital requirements as conventional banks. The attitude of regulators can be summed up in a statement by Robin Leigh-Pemberton, former governor of the Bank of England about Is-lamic banking that is “a perfectly acceptable mode of invest-ment, but it does not fall within the long-established and well understood definition of what constitutes banking in this country”. Another complication is that Islamic financial institutions are usually not from OECD countries, which are given more con-fidence for prudential regulation. Taking into consideration existing quotas against foreign capital participation in the bank sector of Azerbaijan this add more against involvement of foreign banks in general and Islamic foreign banks in partic-ular. Due to the lack of suitable Islamic investments, many banks have been prone to placing their excess liquidity in

risky places. They do not purchase government obligations (Treasury Bonds), often place their assets overseas which makes for regulators it hard to monitor the bank. Not to men-tion eternal problem of regulating non-interest less liquid and more risky investment credits and deposits. There is also high operational risk in Islamic banking operations thanks to their investment nature and the need for more stringent internal control as a result.

If we consider wide-spread free-rider behavior and an intrinsic weakness of Islamic banking known as “Islamic moral hazard” then the picture for regulators becomes even gloomier. For all the above-mentioned reasons plus lack of knowledge on Islamic banking techniques and some prejudices, there is no regulatory-legislative base for Islamic banking. Political will on the part of the government as well as awareness work on the part of local banks and IDB may help in changing the status-quo.

Islamic Paradox of Azerbaijan

Baku – the contemporary capital of Islamic world of the year 2009. The city indeed deserves this for its legacy and contribu-tion Azerbaijani scholars, philosophers, poets, enlighteners, musicians and architects have made throughout the history. First Muslim republic, first newspaper, first opera, and many other “first”s of the Muslim world belong to Azerbaijani Turks and Azerbaijan. Long history of tolerance, peaceful coexist-ence between various confessions is a good proof of the achievements Azerbaijan has the right to be proud of. But the paradox of the contemporary capital of Islamic culture is that veiled women are banned from having their passport photos with their heads covered, every now and then there are inci-dents of discrimination and injustice against religious women and men at the work places and universities, there are a few of TV and radio programs about religion and not because there is no public interest in them.

Moreover, for some reasons bureaucrats seemed to be waiting for Baku to be declared the capital of Islamic culture to start closing down and demolishing mosques. In 2009 only in Baku two mosques were closed (for now temporarily), two – demol-ished for different reasons. Is it a coincidence or a trend?

Guerilla Islamic finance is another paradox of Azerbaijan. The nation, where Islam lives its rebirth after the decades of sup-pression by the Soviet ideology and state, still faces some arti-ficial challenges, which though can’t stop the trend. It is a mat-ter of time for policy makers to realize that addressing issues related to Islam in the positive manner, incorporating what it has to offer is not a challenge for secular state; unlike margin-alization of religion and religious citizens. The sooner we real-ize it the better. But for now: welcome to Baku - a paradoxical capital of Islamic culture!

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Business Elites of Baku

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