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Slightly more than 20 years ago, Heydar Aliyev, the leader of Azerbaijan for a decade, died while in power. A strongman forged in the Soviet structure, he brought stability to a country emerging from the chaos of independence, the transition from a centrally planned economy to a market one, and the war against neighboring Armenia, which ended in defeat in 1994. Aliyev built institutions, founded his New Azerbaijan Party (YAP), created a strong state centered around his figure, promoted foreign investment for hydrocarbon exploration and exploitation, built infrastructure, and consolidated an image of indisputable leadership—a "captain of the storms"—which later transformed into an explicit cult of personality following his death in 2003. He was succeeded by his son, Ilham Aliyev, who until then served as the vice president of SOCAR, the state-owned national oil and gas company. While this succession could have implied a democratic opening, hopes were quickly extinguished, as what followed were two decades of power concentration and growing repression.
The Bertelsmann Transformation Index (BTI) analyzes and evaluates the situation of 137 states based on 17 criteria related to economy, politics, and governance. In reports published every two years, it examines the evolution of the local situation: whether countries are consolidating a democratic or autocratic trend, and whether the economy is being liberalized. The latest BTI, published last March, shows that almost nothing has improved in Azerbaijan since 2006: over 20 years, the country has dropped from 82nd to 90th place, has stagnated in terms of governance, has liberalized its economy only to a very limited extent, and has seen its democratic standards worsen, especially regarding the rule of law. In ten of the eleven reports published during this period, the country was classified as a hardline autocracy. In the remaining one, corresponding to 2012, it was labeled a moderate autocracy. Today, with a government more consolidated than ever, a banned opposition, and scarce international questioning, it is difficult to imagine a structural and democratic transformation in the short term.
A Wealthy and Strong State
Within the framework of the 2024 United Nations Climate Change Conference held in Azerbaijan, Ilham Aliyev stated that oil and gas are a “gift from God” for his country. Indeed, the local economy relies heavily on hydrocarbons, which account for more than 90% of total exports. Natural resources and the opening to Western investment since the early 1990s have helped maintain a strong economy and, with it, a powerful government. So much so that one of the BTI indicators where the country has grown the most in these 20 years is stateness, within the category of political transformations. This includes measurements regarding the monopoly on the use of force, state identity, the degree of interference by religious dogmas, and the level of stability and reach of the administrative bureaucratic structure.
Part of this growth is linked to national defense: with the military victory against Armenia in 2020 and the military success in the brief 2023 operation, Aliyev managed to reclaim Nagorno-Karabakh—a territory internationally recognized as part of Azerbaijan but controlled by Armenians until then. This provided the leader with a significant narrative; he ceased to be merely his father's heir and became a symbol of triumph—the one who achieved irredentist goals. Aliyev thus managed to strengthen social identity consensuses and national narratives that brought confidence within the Azerbaijani leadership while also increasing his own popularity. Monuments and other victory commemorations installed throughout the country helped impose this unique and homogeneous narrative, with little regard for the fact that nearly one hundred thousand Armenian civilians were forced to leave the region. At the same time, Russian peacekeeping forces also withdrew from the area, meaning that Azerbaijan hosted no foreign troops for the first time in its modern history.
With ample resources and the backing provided only by military revenge and the subsequent recovery of sovereignty, Aliyev can afford to dispense with republican and democratic mechanisms of checks and balances that might limit his ambition and the power of his family and associates. Clientelism, cronyism, and nepotism are deeply rooted practices in a country with marked problems of corruption and inefficiency.
A Restricted Opposition
Another BTI point where Azerbaijan has systematically declined since 2006 is political participation, which includes fair elections, association and assembly rights, freedom of expression, and effective power to govern. Both Aliyev senior and junior have obtained around 80% of the vote in practically every presidential election. In the most recent one, in 2024, Ilham officially received over 92% of the votes in a contest where, according to the Organization for Security and Co-operation in Europe (OSCE), there was a "suppression of critical voices and an absence of political alternatives." In fact, as the BTI emphasizes, since the 2010 elections, the only political parties to have won seats in parliament are those that do not challenge the government's authority and operate under its control.
In addition to presidential and parliamentary elections, two constitutional referendums were held during Ilham Aliyev's mandate: in 2009, the two-consecutive-term limit was abolished, guaranteeing unlimited reelection; and in 2016, the term was extended to 7 years and the position of vice president was created, held since then by First Lady Mehriban Aliyeva.
The delay of any reform aimed at democratization has led to dissatisfaction, some demonstrations, and further repression. The pretexts usually used by the government relate to security and defense: the risks of religious extremism (both Shia, supported by Iran, and Sunni, from the North Caucasus), having had part of the territory militarily occupied by Armenia after the 1994 defeat, and the possibility of a popular revolution toppling the government, as happened in Georgia (2003), Ukraine (2004), or Kyrgyzstan (2005).
In 2019, the Azerbaijani Popular Front (AXC), the main opposition force, called for protests demanding the release of political prisoners and free and fair elections, but the government responded with repression and a de facto ban on all demonstrations against it. A year later, the military victory completely silenced these demands and led to the dismissal of any possibility of political reforms. Instead, feeling strengthened, the executive branch increased repression and allowed bribes, embezzlement, and other widespread corrupt practices to persist.
The leader of the opposition party, Ali Karimli—to whom the government has refused to issue a passport—and other members have been systematically detained and harassed. This led the AXC to boycott the 2015, 2020, and 2024 elections. Furthermore, in 2023, a new law on political parties came into force, formally restricting their formation and consolidation as democratic opposition forces, further limiting the possibility of democratically contesting power.
Repression and Censorship
There are currently more than 350 political prisoners in the country, although according to the Free Voices Collective—a non-governmental organization founded in the European Union by activists in exile—the lack of access to judicial information makes it impossible to compile reliable lists. Among those detained is Bahruz Samadov, a political scientist and peace activist imprisoned since 2024, accused of high treason and sentenced to 15 years. Also listed is journalist and human rights defender Ulviyya Guliyeva, imprisoned since May 2025 on charges of conspiring to commit currency smuggling. Though not yet sentenced, she could face between 10 and 20 years in prison. Shortly before, her colleague Aysel Umudova was also detained under the same charges. As the Free Voices Collective points out, the deplorable detention conditions faced by political prisoners may constitute torture or other cruel, inhuman, or degrading treatment. The lack of press freedom in Azerbaijan is evidenced by the fact that nearly all journalists working for outlets such as Toplum TV and Abzas Media have been arrested on trumped-up charges. According to the 2025 World Press Freedom Index published by Reporters Without Borders, Azerbaijan is among the most repressive countries in the world, ranking 167th out of 180 countries.
Civil society activity through non-governmental organizations is also severely restricted, and the government systematically aims to limit international support, especially regarding financial contributions. In recent years, numerous international donors and NGOs have been expelled from the country, harsh laws have been enacted, false criminal complaints have been filed, and dozens of Azerbaijani activists have been imprisoned, while many others have been forced into exile. In practice, NGOs have been replaced by Government-Organized Non-Governmental Organizations (GONGOs), which appear to represent civil society but are merely an extension of the executive branch.
Furthermore, the government has transformed the courts into mere tools to punish opponents. Since selection for relevant positions in the judiciary depends on loyalty to the ruling elite, high-ranking officials are immune to judicial prosecution. What is punished, and with severity, are violations of personal loyalty to the president.
Concentration and Political Influence in the Market
Regarding economic factors, much of the official data is incomplete or potentially manipulated, including figures on poverty, wealth distribution, average income, inequality, and the contribution of private investment to the Gross Domestic Product (GDP).
While local private investment exists in Azerbaijan, there are no large independent companies, and medium-sized ones barely struggle to survive in a scenario of unfair competition against state-owned companies and politically connected conglomerates. State-owned enterprises (SOEs) are linked to the president’s extended family and typically benefit from preferential treatment and market dominance in key industries, particularly in public services, energy, transportation, and banking. Dominant companies have price-setting capabilities, which impacts consumer costs and economic efficiency. The state-owned company SOCAR enjoys a quasi-monopoly in the oil industry and is also the country's largest company and the state's largest taxpayer.
At the same time, the right to private property is frequently violated by the State and powerful allied oligarchs. In recent years, many of them have been removed from relevant economic or administrative positions, which has reinforced the concentration of power and money within the presidential family, leaving more and more Azerbaijanis out of the distribution. This framework of accumulation and state capture limits the possibility of foreign investment and is one of the reasons why Azerbaijan has opted not to join the World Trade Organization (WTO), as accession would require compliance with international standards that the country seems unwilling to meet.
Hydrocarbons are, as Aliyev says, a gift from God, but they are also a curse: the heavy dependence of the local economy means that any fluctuation in international prices has a direct impact. The drop in oil prices between 2014 and 2015 forced the government to devalue the currency, prioritize economic diversification, and analyze the possibility of transitioning toward a floating exchange rate. At the same time, Azerbaijan's oil production has been declining, and existing gas fields are barely sufficient to meet growing international commitments and domestic needs. However, there have been no major changes in the last two decades regarding economic transformation and, aside from the decline recorded in the 2018 report, the BTI reflects stability on this point.
More Allies Than Limits Abroad
As a landlocked country, Azerbaijan depends on its neighbors for the transit of its oil and gas exports. Relations with Russia have worsened over the last 20 years but remain stable today—so much so that Azerbaijan has purchased gas from Russia for domestic consumption, allowing it to free up its own production for export to Europe. However, the Aliyev government prioritizes trilateral cooperation with Turkey and Georgia, countries with which there is high interdependence due to energy infrastructure, particularly the Baku-Tbilisi-Ceyhan pipeline and the Baku-Tbilisi-Erzurum gas pipeline. Added to these is the Baku-Tbilisi-Kars railway, which connects the Azerbaijani capital's port to Turkey via Georgia and constitutes a vital component of the Trans-Caspian International Transport Route, also known as the Middle Corridor. Azerbaijan's strength lies not only in its natural resources but also in its strategic location between Europe and Asia.
In addition to Turkey and Georgia, Aliyev's government has another significant backer, especially since 2022. Following the Russian invasion of Ukraine and with the aim of breaking its dependence on Russian gas, the European Union signed an agreement with Azerbaijan to double imports of Azerbaijani gas to 20 bcm (billion cubic meters) annually by 2027. However, Brussels failed to establish conditions for future cooperation that would help guarantee improvements in human rights. Meanwhile, the government in Baku has refused to allow the organization to provide grants to local civil society groups. Even so, Ursula von der Leyen, President of the European Commission, described Azerbaijan as "a reliable partner." The combination of rising energy prices and Azerbaijan's growing importance as a potential energy provider for Europe in the context of the war in Ukraine has made it the only country in the region to maintain a trade surplus with the continental bloc, while also boosting the confidence and political influence of the ruling family, both locally and regionally.
Despite this, relations between Azerbaijan and the Council of Europe have deteriorated. In early 2024, the Parliamentary Assembly of the Council of Europe (PACE) refused to ratify the credentials of the Azerbaijani delegation, alleging that the country had not met its commitments and was reluctant to collaborate with international democratic institutions. In response, the Azerbaijani government banned entry into the country for Assembly members who had voted against its representatives.
Perspectives
The Azerbaijani ruling elite, led by Aliyev and his family, has the sole priority of maintaining power and control over the country. They possess the economic resources, a firm grip on the State and its institutions, and a victorious narrative that, for the moment, has encountered more allies than limits. The BTI reports over 20 years show a certain stability in terms of the economy, a slight strengthening in governance, and a steady decline in politics, resulting in the consolidation of an autocratic system. The outlook is not positive, but perhaps the decision of the Parliamentary Assembly of the Council of Europe is a first step toward checking a leader who believes himself to be untouchable.
