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Azerbaijan oil: a mixed blessing

The corruption-prone country expects oil revenues to total $160 billion by 2025.

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On the outskirts of the Azeri capital, one can find the starting point of the $4 billion Baku-Tbilisi- Ceyhan (BTC) pipeline, a marvel of 21st-century construction and engineering that has just begun to pump oil on a 1,093-mile journey from the Caspian Sea to the Turkish Mediterranean port of Ceyhan.

On the other end of town, one can also find Veli Garacayli's crumbling cement apartment building, the product of 1960s-era Soviet construction and engineering. Hot water hasn't flowed through the radiators in a decade, after the boiler that serves the building and several others nearby broke down, and water for bathing and drinking is available only two or three hours a day.

Mr. Garacayli, a radio and television repairman who has been unemployed for the past five years, says the sorry state of his building and the ones around it makes him question whether any of the growing oil revenues in Azerbaijan - one of the world's most corrupt countries - will make their way to his neighborhood.

"If Azeris don't show their concern, the officials who control the oil money will split it among themselves," Garacayli explains in the living room of his small apartment. "The problem isn't only that these people will pocket the money, but they also won't invest it in the country."

With oil revenues set to reach $160 billion over the next 20 years, the question of where the money will go and how it will be spent is one that seems to be on everyone's mind in Azerbaijan these days. But economists inside and outside the country are warning that based on the problems Azerbaijan has had with combating large-scale corruption and in building solid democratic institutions, the oil revenue could end up being as much of a curse as a blessing.


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