25 June 2022

Saturday, 12:08

BAILOUT WITH DOUBLE STANDARDS

No donor conferences, no trust funds: Azerbaijan alone against dire consequences of Armenian occupation

Author:

01.05.2022

Economic damage caused by warfare has never been comparable to the scale of human tragedies. However, we should be mindful that any war not only impedes economic development, but also sets a country back an order of magnitude, forcing it to spend much effort and many years to recover from the consequences of hostilities.

Based on its bitter experience of devastating wars, the world community has learned to help countries suffering similar disasters by providing them with interest-free loans or grants from various international funds. And it would be all right if such assistance were distributed fairly among all those affected, not only between the ‘favourite’ ones.

 

Selective bailout

Bailout is a well-known English term meaning material assistance to failing economy to save it from collapse. The first ever large-scale bailout was launched 65 years ago, in 1947, with the approval of the American European Recovery Program better known as the Marshall Plan. Many European countries after the Second World War were in a dilapidated and impoverished state, unable to escape the economic crisis on their own. For four years, the US donated $12.4 billion from the federal budget to the program participants (about $600 billion today). The funds were spent primarily on the restoration and upgrade of industry and infrastructure, as well as on repayment of foreign debt and social support for the population.

The USSR then refused assistance for fear of American hegemony and forced the Eastern European states and Finland to do the same. However, this did not prevent the implementation of the Marshall Plan.

The success of the plan prompted the continuation of similar programmes, of which there are dozens over the years.

Today, Western countries are rallying to help Ukraine. G7 members together with the international community are promising and providing Ukraine with more than $24bn in additional support for 2022 and beyond, as finance ministers and central bank governors announced recently following a meeting in Washington.

"We call on all countries and international organisations to join efforts to ensure adequate support for Ukraine to meet its urgent needs and rebuild its future," said a final statement from the meeting, which also noted the importance of continuing close coordination of support to Ukraine and its neighbouring countries.

G7 welcomed the opening of an IMF multi-donor account for Ukraine and the EU's announcement of a Solidarity Trust Fund, and supported the World Bank and EBRD sustainability packages for Ukraine.

President of the European Council Charles Michel, who recently visited Kiev, said that the EU was determined to use all possible instruments, including financial ones, to help the Ukrainian side. He announced the preparations to launch the Solidarity Trust Fund for Ukraine. "In the coming days, on May 5, we will launch the fund at an international donor conference. We will organise it together with Poland, Sweden with the help of the European Commission, all member states, and with the support of many international players," Michel said.

Meanwhile, the Ukrainian Ministry of Infrastructure has announced an ambitious goal to rebuild the destroyed infrastructure in the liberated territories within a year or two, although the amount of war damage reaches $600bn with the war is still ongoing.  These preliminary estimates were voiced by Ukrainian President Vladimir Zelensky at a meeting of the Congress of Local and Regional Authorities on April 27.

It is planned to launch reconstruction works and funding immediately after the end of hostilities, rather than waiting three years, as was the case with the Marshall Plan.

 

Humanitarian disaster

We can only welcome the desire of strong economies to assist Ukraine, as well as any other country affected by war and destruction. Baku is also involved in these programmes as much as possible, providing humanitarian and economic aid. For Azerbaijan, which just recently went through a 44-day war and is faced with the urgent need to restore its completely destroyed territories, similar problems of another state are quite understandable and close...

The scale of devastation that the Armenian occupation has left behind in Garabagh and eastern Zangezur is appalling. Entire towns, hundreds of villages have in fact been wiped off the face of the earth. But unfortunately, Azerbaijan has to rely only on its own ability to rebuild its liberated territories. Why?

As a rule, it is the donor funds that should offer this kind of assistance. No such offers have been made to Baku, despite numerous visits to the liberated territories by delegations from various countries and international organisations of all kinds, extensive media coverage of the situation, and photographs and video footage which clearly show the scale of restoration works to be carried out by Azerbaijan. Let alone the considerable scale of mine contamination on the liberated lands. The specific amount of damage has not been announced officially, but it is probably not less than hundreds of billions of dollars.

However, Armenia has not been called to account, punished with sanctions or international censure neither during the years of occupation, nor during the Second Garabagh War, although it has in fact been recognised as an invader by the UN, the Council of Europe and other organisations. Moreover, as Azerbaijani President Ilham Aliyev recently said, during the Second Garabagh War, Azerbaijan destroyed about $4-5 billion worth of Armenian military equipment, which raises logical questions. "The question is: where did a poor country get so much money? Where did these loans come from? Were these loans repaid later? Or maybe they were written off? It is absolutely clear that had these loans not been provided, there would be no need for the Second Garabagh War. Armenia itself would have obediently agreed, just as it signed the surrender act, accepted all our conditions. But after the war, it demonstrates a completely different position. Therefore, if Armenia continues to receive money again, we will consider it as an unfriendly step and act accordingly," Mr. Aliyev said.

Also, not only did Armenia completely destroy the infrastructure in the occupied territories, but it also created problems for the rest of Azerbaijan by polluting water in transboundary rivers, cutting off the supply of irrigation water from reservoirs, cutting off the gas supply to Nakhchivan for 15 years. All these facts have been stubbornly ignored by international organisations, while the failure to deliver gas to the Armenian-populated regions of Garabagh  due to faulty pipes was immediately labelled as a humanitarian disaster.

 

Debt or help?

So far Azerbaijan has not received a single dollar in international aid, either from international organisations or from any country in the world. Representatives of organisations visit Garabagh, get outraged by the scale of destruction and… that is it. No proposals, ideas or donor conferences during a year and a half since the end of the war.

Azerbaijan's participation in international life, including in anti-terrorist operations, humanitarian projects, ensuring European energy security and ongoing regional projects give every reason to expect its partners to treat its own humanitarian problems adequately. Especially when the resolution of these problems is important not only for Azerbaijan, but also for the establishment of lasting peace and economic integration in the region.

Azerbaijan is not only a member but also a donor to international financial organisations. Baku has established itself as a stable, self-sufficient and reliable partner in major global projects; a country with good investment ratings. So what is the problem?

"I still hope that international organisations, large foundations, international non-governmental organisations involved in charity will pay attention to this. Aghdam is the Hiroshima of Caucasus. It is not me saying this, but international experts. All cities, just like Aghdam, have been razed to the ground by Armenians. We have not received a single manat from anyone. But this injustice cannot be tolerated. I think that our authorities, the government, the Office of the President, ministries, each of these bodies should work seriously on this issue. If you do not want to help, say it openly. We will know what to do then. No foundation has ever provided assistance to Azerbaijan during almost two years passing since the war," President Ilham Aliyev said at the government meeting.

The investment programme for Garabagh and Eastern Zangezur covering the first year of the recovery operations is estimated at ₼2.2 billion. These funds are allocated gradually to ease the burden to the state budget and the national economy. In this situation, any gratuitous support in the form of technology, equipment, etc. would be very useful. After all, they can at least assist Azerbaijan in demining operations. "More than 200 people have died or been seriously injured after the war. There are so many foundations, NGOs dealing with this issue. What are they doing? Let them help. We are not strong enough to do everything on our own. We have acquired everything we need, including machinery, equipment, even drones detecting mine-contaminated areas. But we don't have enough specialists and manpower. They can helps us at least in this way," President Ilham Aliyev said recently.

Azerbaijan has become accustomed to double standards over the years of occupation. But tolerating this obvious injustice is impossible.

According to Azerbaijani Finance Minister Samir Sharifov, only after a number of speeches made by President Aliyev, the European Union announced plans to provide Baku with a €2bn loan through two banks - the European Bank for Reconstruction and Development and the European Investment Bank. In addition, other international financial institutions, first of all the World Bank, which has extensive experience in reconstruction works, also offer their loan lines. Asian Development Bank is also ready to lend a rather large amount on the basis of programmes presented by the Azerbaijani government.

These are certainly positive signals. Loans are available with favourable conditions for certain projects. Nevertheless, debt and help are two different concepts altogether. Helping a friend who will help you in return, having the resources and capacity to do so.



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