FIRST EXPERIENCE OF INDEPENDENCE

The establishment of the Azerbaijan Democratic Republic (ADR) on 28 May 1918 marked the conception of a modern national statehood. The first republic was also the first experience of democratic governance in the Turkic world and the Muslim East.

Meanwhile, the ADR had to live and work in extremely difficult political and economic circumstances. From the very first day of its existence, the authorities and political forces of the Democratic Republic, among priority issues of state policy, faced the task of bringing the country out of a profound crisis. It was therefore no surprise that the political space of the ADR was turned into an arena of principled wrangling and heated ideological debates over urgent anti-crisis measures.

Against state monopoly 

The situation in Azerbaijan at the time of the ADR declaration was one of complete ruin, lack of organization in the financial and economic life of the country, which effectively led to its isolation and severance of relations with previous industrial markets. This was caused by the world war and revolutionary shocks on the territory of the former Russian empire.

As early as in June of 1918, after the resignation of the first coalition government which existed for a little more than two weeks, the government of right-wing forces led by Fatali Khan Xoyski ascended to power in the republic under pressure from the Turkish military command which was trying to secure Azerbaijan's territorial integrity. Having amassed not only executive but also legislative functions in its hands, the government, which included representatives of nonpartisan democrats, the Ittihad Party and the right wing of the country's leading centrist political force, the Musavat Party, started taking measures to lay the foundation of the political, economic and social course of the state.

The right-wing essence of the government manifested itself in the fact that it abandoned the idea of a rapid land reform that was much anticipated by the peasants. In the trade and industrial sector, it passed a resolution to denationalize the oil industry. As far as the employment issue was concerned, the government regarded it as a secondary matter despite it being the most acute problem. In evidence of that, the Ministry of Labour was abolished. At the same time, although most of the right-wing activists did not see social issues as a priority, they allowed the state a central role in the system of economic control and regulation without encroaching on the institution of private property.

Initially, the activities of the government were intended to prevent famine and to import the products the country needed. Therefore, the decision was made to prohibit the export of food and first steps were taken to create a supply of food of the Azerbaijani state. The "policy of control" was slightly softened after the activities of public bodies started covering the entire territory of the country.

Right-wing political forces representing trade and industrial circles mainly stuck to the opinion that the only way of eliminating food and other economic shortcomings was to get rid of restricted trade and to switch to a free economic system. This approach was opposed by the left-wing movement, worker and cooperative organizations. They believed that free trade would create favourable conditions for the encroachments of private owners on the interests of the low-income population. Therefore, they were in favour of introducing a state monopoly in the industrial and food sectors.

Wrangling over this issue did not bypass the government cabinet either. Most members of it decided in August 1918 to reject the prospect of introducing a state food monopoly. The Council of Ministers adopted a resolution on introducing free trade of all food products within Azerbaijan. A so-called resolute system was also introduced to foreign trade, enabling private industrialists to contact foreign entrepreneurs only with the government's permission.

Shift towards socially-oriented policy

Following the opening of parliament on 7 December 1918, power in the ADR passed to the centre-left coalition whose Musavat-socialist majority formed the majority in the legislature. It was on this majority that two centre-left cabinets were based: the first led by nonpartisan F. Xoyski from December 1918 to April 1919 and the second led by Musavat member Nasib Usubbayov from April to December 1919.

The coalition restored the Ministry of Labour. After this, social policy became a priority direction of the ADR state policy and was aimed at protecting the interests of the low-income population. Starting from the spring of 1919, the activities of the centre-left cabinet started slanting to the right. This was particularly noticeable in trade and industrial policies. The liberalization of the domestic and foreign economic sphere led to unhindered export of Azerbaijani oil and oil products. This policy caused a barrage of criticism from statist forces, including the pro-government camp which advocated preservation of the strong role of the state in the country's economic life.

Bread supplies sharply deteriorated in mid-February 1919 and prices for grain dramatically increased. Under rising pressure from both the political right and left, Prime Minister Xoyski tendered his resignation.

On 14 April 1919, the new head of the cabinet, Nasib Usubbayov, stated in a program declaration that the form of state intervention in trade had not achieved the desired effect. Therefore, he stated the government's intention to release a sufficient quantity of goods in order to reduce market prices and put the food situation in the country back on track by attracting goods from the outside and completely liberalizing domestic trade.

In May 1919, the government set a course to establish free trade within Azerbaijan and cancel the "regulatory approval system" "in order to put an end to speculation". On 1 September, the government made the decision to allow unhindered export of oil. Two months later, the government authorized the exports of cotton, wool and other raw materials. The persons and enterprises interested in exporting raw materials abroad were required to surrender 25 per cent of exports to the state treasury free of charge.

Overall, the centre-left coalition added socially-oriented quality to the ADR's economic policies in the one year of its operation. However, it failed to bring about an economic breakthrough and avoid the sinister prospect of public and political instability in the country.

Between socialist and right-wing dictatorship 

In late 1919, a broad coalition of parties adhering to the platform of Azerbaijani independence (Musavat and nonpartisan democrats, Ahrar, Ittihad and the Socialist bloc) formed a fifth government of the republic which was also led by N. Usubbayov. The government started operating on the background of the nascent international recognition of the ADR on the one hand and direct attempts of Russia to establish political influence on Azerbaijan, on the other.

The government's efforts to expand state intervention in the trade and industrial sectors and take the country out of the food crisis went down well with most of society. At the same time, the left-wing forces, including the Socialist bloc, objected to the government's refusal to encroach on the foundation of private property, which resulted in delaying the transfer of land to peasants.

It was extremely important that by early 1920 many ADR activists were convinced that the state they had established could survive only if all domestic political, economic, military and humanitarian resources were mobilized. Economically, this was supposed to lead to hard-line suppression of anti-state activities of major capital and land owners, on the one hand, and left-wing political organizations that could sacrifice Azerbaijani independence for the sake of their socioeconomic demands, on the other.

At a time when the ADR was faced with a deterioration in the plight of the greater part of its people, the unseen exacerbation of socio-political tension within the country, aggressive acts on the part of Armenia and military and political pressure from Bolshevik Russia, Azerbaijan faced a choice that was abhorrent to its democratic course - between socialist or right-wing dictatorship. The first alternative was backed by left-wing political forces, while the second was proposed by the right wing of Musavat and nonpartisan democrats. Paradoxical as it was, the socialist alternative in its most radical form, which Bolsheviks eventually succeeded in implementing, was also supported by one of the largest right-wing organizations, the Ittihad Party: the hatred for the imperialist West which was accused of enslaving the Muslim world got the better of class interests.

In early 1920, the government stepped up control over the trade and industrial sector and started fighting against corrupt practices in the economy. The Baku city administrator, Tura Gudiyev, announced that taxes would be imposed on the property-owning classes in favour of the poor, that the bank bourgeoisie would pay a contribution of 136 million rubles in order to lower the prices of bread and other foods, and cooperative organizations would be actively engaged in improving the food situation. This showed that the authorities had begun relying more on public organizations than private circles in resolving food problems.

It is also worth pointing to the measures taken by the minister of internal affairs, Mustafa Vakilov. He decided to "exact money from the wealthy as soon as possible" in favour of the price reduction committee and established a special department on levies under the Baku police chief.

The official newspaper "Azerbaijan" emphasized in those days, "Pumping the money out of private pockets to be spent on the food for the population is a measure that has a favourable impact on the population and interests of the state. It raises the value of the money and leads to the provision of the poor with articles of daily necessity." The republic's leading newspaper advocated compulsory taxation of the property-owning classes because the "psychology of private capital holders does not speak favourably about their readiness to meet the interests of the state and sacrifice their own appetites for the sake of the country."

In unison with a great epoch

The main problem of the ADR's economic development boiled down to the choice of a model: free economy or the economy controlled by the state. Right-wing political forces, primarily Ittihad, right-wing Musavat members and some nonpartisan democrats, protected private property and advocated a free economy, but said it was necessary to resolutely fight against the speculative activities of trade and industrial circles. Left-wing forces, represented by the Socialist bloc, were in favour of state control over the economy and absence of any capital pressure on the authorities. A combination of these two approaches manifested itself in the activities of the country's leading political force, Musavat, especially its centre and left-wing. Their approach combined the advantages of state monopolism, liberal economy and socialist regulation, but it could not be implemented at that particular moment in history.

The economic reforms so much striven for by the authorities of the young republic were interrupted in the aftermath of Azerbaijan's occupation by Soviet Russia in late April 1920. The Bolsheviks ascended to power and established total control over all spheres of state and public life, including the economy.

In conclusion, we would like to point to an interest fact. Considering the serious and controversial nature of objective factors, the immaturity of the ADR's party system and the inadequacy of parties' economic programmes, their political colouring and the political identity of many civil servants of the republic cannot be clearly defined. Thus, one of the most prominent persons in the ADR's political firmament, F. Xoyski, headed three completely different cabinets: the government of a broad democratic coalition, the government of right-wing forces and the first centre-left cabinet.

The activities of outstanding ADR politicians are enabling us to assess their personal flexibility, the amazing open-mindedness in relation to different advanced ideas, the desire to actively look for ways out of the crisis the country was in, and the unthinkable ideological and practical richness of their great epoch. A whole range of politicians whose names have been written in the history of the ADR with golden letters (Xudadat Malikaslanov, Aliaga Hasanov, Aga Asurov, Rasid Kaplanov, Aga Aminov, etc.) can be attributed to the list of founders of statism, conservatism and social liberalism which were emerging in Azerbaijan at the time.