Cut the branches, strengthen the roots.
Hereditary rule in Azerbaijan has been extended. The political structure transformation in Azerbaijan has led to a political system dominated by familial rule, creating a tableau of historical heritage, power dynamics, and contemporary state-building challenges. On Wednesday, February 7, Azerbaijan held its early elections and, as expected, Aliyev won the presidential election for the fifth consecutive term with 92% of the vote.
The pre-election atmosphere can confidently and best be described as a political deadlock characterized by weak political rights, widespread social apathy, and vicious cycles of suppressing opponents and critics. Elections in Azerbaijan, like in other autocratic regimes such as Turkmenistan and Venezuela, have largely become nominal.
Instead of adhering to rational legal principles, it serves the interests of patrimonialism. Patrimonialism is a term coined by German sociologist Max Weber, referring to a type of traditional political domination that Weber primarily associated with Middle Eastern countries.
In a patrimonial system, governance is the personal and private domain of the ruler, and through the development of military and administrative apparatuses, traditional authority evolves into a hereditary system. The political system in the Republic of Azerbaijan is also completely dominated by the Aliyev family. However, the consolidation of power within the Aliyev family has long-term consequences for democracy, social dignity, and economic development. But how did Azerbaijan reach this point?
Family Business
In 2003, when Ilham Aliyev inherited power from his father Heydar Aliyev, he faced three main tasks to ensure his survival in this vital position: maintaining elite cohesion, eliminating political rivals, and ultimately removing legal obstacles. At that time, the ruling elites of the country were dominated by three groups representing clan politics. The first group was the ruling family, including the Aliyevs and the first lady’s family, the Pashayevs. The second was the old guard responsible for foreign policy. The third were oligarchic ministers who led regional support networks.
The latter two groups, rooted in the Soviet nomenklatura—a system of appointments and political patronage in the Soviet Union where individuals were selected for key positions based on loyalty to the party and state—were appointed by Heydar Aliyev in the 1990s in exchange for loyalty to the country’s official authorities.
These rival clans had a strong grip on the country’s state management and the energy-based economy, where the allocation of significant and uncontrolled annual budgets for construction and infrastructure truly served their personal interests.
The oil boom in the early 2000s greatly benefited the Aliyev family, not only by maintaining elite loyalty through extensive pyramid distribution of rents but also by integrating and accepting new peers or severely suppressing key opposition parties, media, and civil activists in the silence of the country’s Western energy partners who favored regime stability in Baku.
In this context, the government held two constitutional referendums: in 2009 to abolish presidential term limits and in 2016 to extend the presidential term from five to seven years. Meanwhile, youth-led protests inspired by democratic changes in the region in 2005 and 2013 were brutally suppressed, and many political civil leaders were imprisoned, with the violence and arrests intimidating others.
Once Aliyev succeeded in achieving his political goals, it was time to cut the branches and deepen the roots of his family’s authority. Over the past decade, Azerbaijan’s elite structure has undergone a significant transformation within the framework of what researchers call the promotion of autocracy. In 2015, a year after Azerbaijan’s oil and currency crisis, Aliyev appointed his wife Mehriban Aliyeva as the first vice president, marking the beginning of widespread reshuffling of high-ranking government officials in the Republic of Azerbaijan.
In the following years, 14 out of 18 ministers, including regional oligarchs, were replaced with capable technocrats. The radical elite reforms peaked when President Ramiz Mehdiyev, head of his old guard who had served him for 25 years and was considered one of the most powerful state heads, was dismissed along with his colleagues in lower positions. As a result, many believed that the extended ruling family, including the Pashayevs, had risen in clan politics.
Invisible Hands
The interconnected reasons for the elite reforms mentioned above were emphasized by Aliyev in the face of declining annual oil production. First, the need to limit rent distribution to family members while eliminating rival oligarchic networks. Second, the assumption that the old elites were not competent enough to tackle the post-oil era challenges.
While there are still many doubts about the real impact of government changes in terms of political and economic development, significant changes have occurred in the structure of political and economic power. Replacing greedy officials and subsequent reforms helped the government save a significant amount in social spending and taxes, according to Qubad Ibadoglu, an economic researcher who was recently imprisoned.
He considers these changes a transition from oligarchic rule to governance management. He noted that the ruling family’s Pasha Holding company was able to dominate the market by eliminating all other key players. Many of the new government appointees actually emerged from Pasha Holding.
A look at the organizational structure of Pasha Holding shows that the company has significant wealth and controls all profitable sectors, including a large portion of banking and insurance, construction and real estate, agriculture, luxury hotels, famous brands, entertainment, and more. For example, the ruling family’s share in the banking sector increased from 16% in 2015 to 43% in 2022, while the number of banks decreased from 45 to 26.
The family also manages major energy companies, gold mining, and telecommunications like Azercell, the country’s main mobile operator. The most important government contracts are awarded to these entities, which is crucial for achieving social control through the labor market. In addition to 900 government sector employees, Pasha Holding alone employs over 20,000 people, mainly from the middle class and inclined towards participation and increased political awareness.
However, exercising overt control over markets through monopoly has detrimental consequences for the economy. Monopolies hinder market competition and economic activity, and Azerbaijan’s economic growth rate in 2023 fell to 11%, in contrast to the over 7% growth rate observed in Georgia and Armenia. The negative outlook due to the risk of losing investments and loans due to deteriorating relations with the West, including the suspension of relations with the Parliamentary Assembly of the Council of Europe, will be exacerbated.
Bitter Future
Aliyev referred to the early elections of February 7 as the beginning of a new era that completed his 20-year presidency. However, there are reasons to assume that the new era will be relatively bitter. Just before the elections, officials suppressed Abzas Media, one of the last remaining independent media outlets in the country that had previously investigated the ruling family’s business activities, and six of its employees, including the media manager and editor-in-chief, were arrested and sentenced to long prison terms.
This occurred following the regime’s efforts to excessively monitor and censor activists and non-state actors through the implementation of strict laws regarding media and political parties in recent years. Before the 2022 elections, Turkmenistan was the first and only country in the Eurasia region to witness a hereditary power transfer. However, the completely closed space for civil and political alternatives over the years and the recent increase in the presence of young Heydar Aliyev alongside state officials in public gatherings suggest that another option might be on the way.
