UEFA sponsorship Azerbaijan relies on a new strategy
Status: 12.06.2021 12:17 p.m. Azerbaijan’s capital Baku is a venue for the European Football Championship. State-owned oil company SOCAR has been a UEFA sponsor since 2013, but recently it dropped out. It’s part of a new strategy. From Silvia Stöber, tagesschau.de Azerbaijan’s capital, Baku, shows itself from its brilliant side: three group matches and the quarter-finals of the European Football Championship will be played in the national stadium, which was opened in 2015. The state-owned energy company SOCAR signed on as a sponsor eight years ago for 90 million euros. However, its logo has recently been missing from the UEFA website. When asked by German media such as “11Freunde”, the European Football Association only confirmed the departure of SOCAR. There are several reasons to part with the oil company: The involvement in sport should distract from the human rights violations of the leadership in Baku, which has critics of the authoritarian and corrupt government persecuted and imprisoned – is one charge, another: Propaganda against the enemy neighbor during the war in autumn, with SOCAR mainly sharing tweets from the Azerbaijani leadership.
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New business strategy
However, according to news on Azerbaijani websites, the initiative to break up did not come from UEFA. Accordingly, SOCAR decided to end the sponsorship. At the end of May, the financial news portal fins.az quoted the deputy head of the public relations and event organization department of SOCAR, Ibrahin Ahmedov, saying that the company had changed its business strategy. For those projects that no longer fit, the expenses would be reduced. This also includes the extension of the partnership with UEFA. The press organ “iki sahil” explained that SOCAR decided in 2019 to rethink its old business strategy. With the management consultancy McKinsey, a new one has been developed for the period up to 2035, which takes into account the transformation of the global economy, the fourth industrial revolution and the energy transition.
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Questions about the political benefit
In fact, the question arises how profitable the costly sponsorship as well as the Hosting sports and cultural events for Azerbaijan were. The country has become better known around the world since it hosted the “Eurovision Song Contest” in 2012 and sports events such as Formula 1 in Baku every year since 2016. But sports and cultural events were always associated with reports on authoritarian governance, corruption and the human rights situation. This was ensured by national and international actors from civil society, the media and politics.
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In Azerbaijan, hoped for political support for the forcible recapture of areas under the control of enemy neighbors Armenia was limited to a few countries such as its close ally Turkey. Whose President Recep Tayyip Erdogan will not only use the European Football Championship to play in the group game between Turkey and Wales in Baku. He will also be in that during the war in autumn conquered city of Shusha travel.
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Heralded the post-oil era
Apart from that, SOCAR’s withdrawal from sponsorship shows the adaptability of the leadership around President Ilham Aliyev, who succeeded his father Gaidar in office in 2003. The often underestimated president succeeded in asserting himself against competitors and old power structures. To this end, he appointed his wife Mehriban Aliyeva as his deputy in 2017. She comes from a business family from Baku that has a corporate empire with Pasha Holding, but is considered more modern than the conventional oligarchs.
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Modernization was the Aliyev’s response to severe crises that befell the country from 2014 onwards. At that time, oil prices fell massively for the first time. Azerbaijan experienced the first recession since 1995, the central bank had to devalue the national currency sharply. Despite the repression, the population’s displeasure over falling incomes was expressed in protests. In previous years, experts had warned of the dry up of energy sources on land. Extracting oil and gas from the Caspian Sea is more complex and expensive. At the World Economic Forum in Davos in 2018, Aliyev said: “When we saw a significant drop in oil prices, I said the post-oil era had already begun for us in Azerbaijan. We should forget about oil and gas.” He made the diversification of the economy the main objective. The main sources of income should be innovative technologies, entrepreneurship and agriculture.
Digital and green technologies
In fact, Aliyev filled senior posts with young technocrats. you de-bureaucratised and digitized the administration – to the delight of the citizens, who can now receive services from the state without bribery. Foreign companies should be able to invest more easily in special economic zones.
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Aliyev drew up ambitious plans for the areas recaptured during the war with the use and development of digital and green technologies. The British company Chapman Taylor received the contract for the town planning from Schuscha, who had previously carried out construction projects for Pasha Holding. Turkish companies, some with ties to Erdogan, take on infrastructure and mining projects.
Elite corruption remains
Experts and journalists point out that these contracts were awarded without tenders and transparency. This gives rise to the assumption that the fight against corruption is intended to spare the elite sector who want to develop sources of income apart from oil and gas with new branches of the economy. The fact that Azerbaijan is undergoing modernization, but not democratization, is also supported by the result of the parliamentary elections in 2020. To the disappointment of many of the younger generation, mostly old cadre members remained. Many new candidates from the ruling party were also not considered. The leadership used the strict restrictions at times during the corona pandemic to crack down on government critics. It remains to be seen whether the Azerbaijani leadership will withdraw from sponsorship entirely and whether other states with a similar background will also reconsider their commitment. For associations like UEFA, the question would then arise of how expensive events can be financed in the future.
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