News / Asia

    Oil Crisis Takes Shine Off Azerbaijan's Lavish Sports Events

    FILE - Fireworks explode during the closing ceremony of the 1st European Games in Baku, Azerbaijan, June 28, 2015.
    FILE - Fireworks explode during the closing ceremony of the 1st European Games in Baku, Azerbaijan, June 28, 2015.
    Reuters

    When oil exporter Azerbaijan signed up to host its first ever Formula One Grand Prix this year along an esplanade in its capital, the government promoted it as an opportunity to showcase the country's new confidence.

    Now, with the economy in a state of crisis and police in some parts of the country using tear gas to disperse protesters, a sporting extravaganza that attracts the world's super-rich is jarring with the public mood.

    "It would be better if the government used this money on local businesses. We will run out of oil one day," Vugar, a manager at a cafe in the capital, Baku, said of the Grand Prix that takes place in June.

    Azerbaijan's penchant for lavishly hosting high-profile events — previous examples were the Eurovision Song Contest in 2011 and the inaugural European Games last year — has prompted questions about whether the government is mismanaging the economy.

    Political opponents say the events are intended mainly to glorify the government of President Ilham Aliyev, who took over from his father Heydar, a Soviet-era Communist Party boss who ruled until his death in 2003.

    Similar questions are being asked in other oil producing countries, from Kazakhstan to Algeria and Venezuela, where the decline in the price of crude to its lowest level in 12 years has slashed budget revenues and hobbled economic growth.

    In Azerbaijan's case, economic managers have taken some prudent decisions. The country committed early to putting some oil revenues in a rainy-day fund, which is cushioning the economy now. During the good times, there was investment in important infrastructure, including in roads.

    But the International Monetary Fund has for years been saying the government should show more fiscal discipline and do more to develop the non-oil economy by tackling corruption and informal monopolies that stifle competition.

    Showcase

    When the Grand Prix comes to Baku on 17-19 June, drivers such as Lewis Hamilton and Sebastian Vettel will race along Oilmen Prospect, on the banks of the Caspian Sea, then loop around Baku's Old City, a United Nations World Heritage Site.

    The price listed on the Formula One website for a ticket in the main grandstand over the three-day race weekend is $665, more than twice the average monthly salary in Azerbaijan of 460 manats ($287).

    Authorities say the event, broadcast around the world, will help showcase Baku as a modern city with a rich heritage, and promote long-term economic growth.

    "A Formula One race will improve our country's image. When we took an obligation to host this event two years ago, we could not forecast such a sharp decline in the oil price," Vakhid Akhmedov, a lawmaker with the ruling party and a member of the parliamentary economic commission, told Reuters.

    "But Azerbaijan has enough currency reserves and I don't think there is anything bad about spending some of this money on such an important project," Akhmedov said.

    Grand Prix hosts typically pay fees to the sport's commercial rights holder for the privilege of having the race, but contract details are a closely-guarded secret. The size of the fees varies, with traditional European venues paying less than newcomers.

    Azerbaijan's state budget contains an allocation of 324 million Azeri manats ($202 million) for hosting international sporting events in 2016. Though it does not break the sum down by event, the only ones this year are Formula One and an international chess competition.

    The combined sum is about the same as Azerbaijan plans to spend in 2016 on keeping hospitals running for its population of 9.5 million people, according to a finance ministry presentation.

    Figures are not available for how much Azerbaijan spent hosting the 2012 Eurovision song contest, staged in a brand new sports arena called Baku Crystal Hall.

    According to official information, construction of a stadium where the opening and closing ceremonies for last year's European games were held cost 640 million manats ($400 million). The stadium is now used for football matches.

    Hasan Quliyev, a taxi driver in Baku, said the Baku Grand Prix is already causing disruption, because streets in the city center are closed for renovation to prepare them for the event.

    "Our authorities lead us into poverty and spend millions on this event which will probably improve their own image, but not the image of our country," said Quliyev.

    You May Like

    Top US General: Turkish Media Report ‘Absurd'

    General Dunford rejects ‘irresponsible' claims of coup involvement by former four-star Army General Campbell, who led NATO forces in Afghanistan before retiring earlier this year

    Video Saving Ethiopian Children Thought to Be Cursed

    'Omo Child' looks at efforts of one African man to stop killings of ‘mingi’ children

    Protests Over Western Troops Threaten Libyan 'Unity' Government

    Fears mount that Islamist foes of ‘unity' government plan to declare a revolutionaries' council in Tripoli

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    London’s Financial Crown at Risk as Rivals Eye Brexit Opportunitiesi
    X
    VOA News
    July 25, 2016 5:09 PM
    By most measures, London rivals New York as the only true global financial center. But Britain’s vote to leave the European Union – so-called ‘Brexit’ – means the city could lose its right to sell services tariff-free across the bloc, risking its position as Europe’s financial headquarters. Already some banks have said they may shift operations to the mainland. Henry Ridgwell reports from London.
    Video

    Video London’s Financial Crown at Risk as Rivals Eye Brexit Opportunities

    By most measures, London rivals New York as the only true global financial center. But Britain’s vote to leave the European Union – so-called ‘Brexit’ – means the city could lose its right to sell services tariff-free across the bloc, risking its position as Europe’s financial headquarters. Already some banks have said they may shift operations to the mainland. Henry Ridgwell reports from London.
    Video

    Video Recycling Lifeline for Lebanon’s Last Glassblowers

    In a small Lebanese coastal town, one family is preserving a craft that stretches back millennia. The art of glass blowing was developed by Phoenicians in the region, and the Khalifehs say they are the only ones keeping the skill alive in Lebanon. But despite teaming up with an eco-entrepreneur and receiving an unexpected boost from the country’s recent trash crisis the future remains uncertain. John Owens reports from Sarafand.
    Video

    Video Migrants Continue to Risk Lives Crossing US Border from Mexico

    In his speech Thursday before the Republican National Convention, the party’s presidential candidate, Donald Trump, reiterated his proposal to build a wall along the U.S.-Mexico border if elected. Polls show a large percentage of Americans support better control of the nation's southwestern border, but as VOA’s Greg Flakus reports from the border town of Nogales in the Mexican state of Sonora, the situation faced by people trying to cross the border is already daunting.
    Video

    Video In State of Emergency, Turkey’s Erdogan Focuses on Spiritual Movement

    The state of emergency that Turkish President Recep Tayyip Erdogan has declared is giving him even more power to expand a purge that has seen an estimated 60,000 people either arrested or suspended from their jobs. VOA Europe correspondent Luis Ramirez reports from Istanbul.
    Video

    Video Calm the Waters: US Doubles Down Diplomatic Efforts in ASEAN Meetings

    The United States is redoubling diplomatic efforts and looking to upcoming regional meetings to calm the waters after an international tribunal invalidated the legal basis of Beijing's extensive claims in the South China Sea. VOA State Department correspondent Nike Ching has the story.
    Video

    Video Four Brother Goats Arrive in Brooklyn on a Mission

    While it's unusual to see farm animals in cities, it's become familiar for residents of Brooklyn, New York, to see a little herd of goats. Unlike gas-powered mowing equipment, goats remove invasive weeds quietly and without adding more pollution to the air. As Faiza Elmasry tells us, this is a pilot program and if it proves to be successful, the goat gardener program will be extended to other areas of New York. Faith Lapidus narrates.
    Video

    Video Scientists in Poland Race to Save Honeybees

    Honeybees are in danger worldwide. Causes of what's known as colony collapse disorder range from pesticides and loss of habitat to infections. But scientists in Poland say they are on track to finding a cure for one of the diseases. VOA’s George Putic reports.
    Video

    Video Wall Already Runs Along Parts of US-Mexico Border

    The Republican Party’s presidential nominee, Donald Trump, gained the support of many voters by saying he would build a wall to keep undocumented immigrants and drugs from coming across the border from Mexico. Critics have called his idea impractical and offensive to Mexico, while supporters say such a bold approach is needed to control the border. VOA’s Greg Flakus has more from the border town of Nogales, Arizona.
    Video

    Video New HIV Tests Emphasize Rapid Results

    As the global fight against AIDS intensifies, activists have placed increasing importance on getting people to know their HIV status. Some companies are developing new HIV testing methods designed to be quick, easy and accurate. Thuso Khumalo looks at the latest methods, presented at the International AIDS conference in Durban, South Africa.
    Video

    Video African Youth with HIV Urge More Support

    HIV, the virus that causes AIDS, is the top killer of teens in sub-Saharan Africa. But many youths say their experience with the virus is unique and needs to be addressed differently than the adult epidemic. VOA South African Correspondent Anita Powell reports.
    Video

    Video Pop-Up Art Comes to Your Living Room, Backyard and Elsewhere

    Around the world, independent artists and musicians wrestle with a common problem: where to exhibit or perform? Traditional spaces such as museums and galleries are reserved for bigger names, and renting a space is not feasible for many. Enter ArtsUp, which connects artists with venue owners. Whether it’s a living room, restaurant, office or even a boat, pop-up events are bringing music and art to unexpected places. Tina Trinh has more.
    Video

    Video Scotland’s Booming Whisky Industry Fears Brexit Hangover

    After Britain’s vote to leave the European Union, Scotland’s government wants to break away from the United Kingdom – fearing the nation’s exports are at risk. Among the biggest of these is whisky. Henry Ridgwell reports on a time of turmoil for those involved in the ancient art of distilling Scotland’s most famous product.

    Special Report

    Adrift The Invisible African Diaspora