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ALIYEVS’ EMPIRE FLOURISHES WHILE LIVING STANDARDS PLUMMET

The Azeri Times

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A company controlled by the First Daughters expanded its assets rapidly as savings and living standards in Azerbaijan plummeted with the national currency.

The massive Azerbaijani company, Pasha Holding, controls over 100 subsidiaries in everything from finance and real estate to agriculture, retail, and catering. The company’s assets are primarily concentrated in Azerbaijan, but extend across the border to Turkey, Georgia, and Montenegro.

Pasha Holding was previously controlled by its namesake, Arif Pashayev, father of First Vice President and First Lady Mehriban Aliyeva, but in 2013 Pashayev passed control of the holding to the First Couple’s daughters, Arzu and Leyla Aliyeva.

Since that time, the national currency, the manat, has lost half its value, causing living standards and savings to plummet as debt skyrocketed (most bank loans had been calculated in dollars or euros). Yet Pasha Holding’s assets rose from $3.3 billion in 2013, to $4.1 billion in 2017, the equivalent of over 40% of Azerbaijan’s state budget for that year.

This is even more impressive taking into account the fact that the vast majority of Pasha Holding’s business is conducted in Azerbaijan in the national currency. The value of the company’s assets calculated in manats has skyrocketed from 2.6 billion AZN in 2013 to 6.9 billion AZN in 2017. It’s an open question as to how Pasha Holding achieved this staggering growth.

Pasha Holding’s deals

There is no precise information about the capital of Pasha Holding LTD and many of its subsidiaries (Pasha Concrete, Pasha Construction, PMD Group, Amal Invest Group, etc) because they evade providing open information for the registry of commercial organizations, but at least some information is publicly available.

In 2009, residents were resettled en masse from Khan Shushinski Street in Baku and the neighborhood was demolished. The families that had been forced out of their homes told the media that the area had been taken for state needs: a residence was being built for President Ilham Aliyev. No such property, however, is included on the list of presidential residences last updated in 2017. Instead, a complex of luxury homes was built there, mostly populated by the heads of the various diplomatic corps in Azerbaijan. The complex, called Baku City Villas, belongs to Pasha Holding.

Baku City Villas
Baku City Villas.

PMD Group, founded in 2013, is rapidly growing. In short order, the company acquired a 37.5% stake in Bank Avrasiya (63.8 million AZN in capital), began managing the hotels Shamakhi Palace Shiradil (45.5 million AZN) and Naftalan Gashalti (8.1 million AZN), and founded Prime Estates – a real estate company with 17.8 million AZN in capital. In 2013, the state leased a 523 hectare agropark in Yalama to PMD Group for 49 years, as well as 956 hectares of pastures in Mugtadir.

In 2015, Pasha Holding signed several large investments both inside and outside the country, including:

  • The purchase of Turkish TAIB Yatirim Bank from Aksoy Holding and its transformation into Pasha Yatirim Bank OJSC;
  • The establishment of Blue Planet Distribution, which controls a beachfront hotel in Shurabad (Khizi District) and numerous sports and clothing shops in Baku;
  • The establishment of Azerbaijan Supermarket and Bravo Supermarket, large importers and retail chains;
  • The rapid expansion of PMD Group LTD, which operates in the fields of agriculture, processing, construction, real estate, hotel management and recreation, banking, etc.;
  • The expansion of the holding’s hotel, public catering, and cinema network, etc.

Pasha Holding LTD holds a 60% share in Pasha Bank, which operates in Azerbaijan, Georgia and Turkey. As of 1 October 2017, the bank’s consolidated financial report said its assets were worth 3.5 billion AZN and aggregate capital was worth 372 million AZN. On the same day, assets in Kapital Bank OJSC (99.87% of its shares belong to Pasha Holding LTD) were worth 3 billion AZN and capital was worth 287.6m AZN.

The capital of Pasha Development LTD was most recently published in February 2017, reportedly controlling a total of 420 million AZN in capital, including 72 million AZN in Pasha Insurance, and 58 million AZN in Pasha Life Insurance. This year the group acquired a fashionable hotel complex in Bilgah and invested 100 million AZN in the company that runs it (Yeni Bilgah Oteli).

Pasha Holding holds a 10% share in SOCAR Polymer which is being built in Sumgayit and is planned to be put into operation in the middle of this year.

Pasha Holding’s public significance

In October 2014, Azerbaijan’s Cabinet of Ministers approved a list of entities of public significance that were to do their accounting in accordance with the International Financial Reporting Standards. Pasha Holding was not included in the list, which contains many well-known domestic companies. At the time the holding matched at least two of three criteria required to be considered an entity of public importance: the number of employees at the holding was 2,500 (the requirement was 1,500) and its assets exceeded 2.6 billion AZN (the requirement was 300 million AZN). The third requirement was that annual revenues must exceed 120 million AZN, which is certainly true of Pasha Holding now, but the government has not updated the list of entities of public importance for over three years. If Pasha Holding is ever added to the list, the public will gain access to the company’s consolidated financial statements.

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Azerbaijan

The US Calls Azeri Government to free All Individuals Imprisoned for Exercising Their Fundamental Freedoms

The Azeri Times

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The US welcomes the release of the opposition politician Ilgar Mammadov from imprisonment in Azerbaijan and calls on the authorities to remove accusations from him, as well as to release all other persons arrested for the implementation of fundamental freedoms.

This was stated by the Department of State spokeswoman Heather Nauert.

“The United States welcomes the decision of the Azerbaijani Court of Appeal to release Republican Alternative Party Chairman Ilgar Mammadov, whose conviction and imprisonment for over five years raised serious concerns about the rule of law in Azerbaijan. We call on the government to drop the charges against him, in keeping with its international obligations and the rulings of the European Court of Human Rights.

We urge the Azerbaijani authorities to release all other individuals who have been imprisoned for exercising their fundamental freedoms,” Nauert said in the statement published on the website of the US Department of State.

According to local human rights defenders, there are at least 150 political prisoners in Azerbaijan.

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Azerbaijan

The true price of Azerbaijani cotton

The Azeri Times

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The fall in oil prices during the last few years has forced the government of Azerbaijan to seek alternative revenue sources. Baku placed its bets on cotton, without heeding the consequences – human rights violations, rising costs of agricultural produce and even the threat of boycotts by major buyers. After the mass poisoning of cotton workers this summer, Meydan TV reporters started to wonder: what is the price this country has to pay for growing cotton?

Criminal proceedings after poisoning allegations

“We all started to have bad stomachaches, then foam came out of our mouths. We got scared and left the field. Those who were not affected took us to a hospital,” recalls Gulnara Gardashova.

The 33-year old is one of the Azerbaijani cotton workers who was poisoned while working on the fields this summer. There are said to be hundreds of people like her, though the government is concealing the actual scale of what is happening.

On 10 July, 25 other people were poisoned along with Gulnara, working on cotton fields in the village of Simada in the southwestern Saatli district.

“Before we started working, the farmer told us that he had sprayed the soil with a chemical two weeks earlier, and that it was safe to resume work after two days. But it seems that the effect of the chemical lingered.”

Gulnara and the others affected were taken to the local hospital. She said their condition was taken seriously, which is why they were sent to the Clinical Medical Center in Baku.

When talking to reporters, Azer Magsudov, head of the clinic’s Toxicology Department, confirmed that those affected were feeling “lightheaded and sick” but rejected the suggestion that this was due to poisoning. He did not specify what caused the symptoms. Similarly, doctors in other hospitals who treated the patients with the same symptoms told journalists that the cause was excessive exposure to the sun, not poisoning due to pesticides.

The Azerbaijani Prosecutor General’s Office has launched criminal proceedings into negligence by officials and potential violations of procedures in combatting plant diseases and pests. On 10 August, the Prosecutor-General’s Office said it had completed a preliminary investigation in the criminal case regarding 10 people – agronomists, heads of centers for the protection of plants, and other officials. All of them have been charged with violating occupational health and safety rules, and their cases have been passed on to courts in Saatli, Imishli and Tartar districts.

Scale of poisonings remains unclear

There is no official information about the number of people affected. Media reports and eyewitness testimonies suggest that there have been at least 400 cases this summer alone. Among the victims are children, who often help their parents on the fields. In Saatli, a Meydan TV correspondent saw three teenage girls weeding a cotton field.

So far, the poisonings occurred in four districts: Imishli, Saatli, Tartar and Yevlakh.

In June, around 80 cotton workers were poisoned working on fields in the Imishli district. Since the official narrative of sunstroke had not yet been established, the head of the local hospital, Eynulla Gasimov, shared his assessment freely:

“In Soviet times, people used to get poisoned by pesticides. Such incidents still happen today, and this is one of them.”

The main buyers and distributors of pesticides are agro-industrial unions. Since they are controlled by the government, it is difficult for journalists to obtain information about the specific types of pesticides used on the fields.

In a recent investigative report, Ifact.ge published pictures of chemical containers found on Saatli cotton fields. They contained Rifle 48 EC, which contains the herbicide Trifluralin. The EU banned it ten years ago, but it is still permitted in some countries – including the United States and Turkey – provided that workers spraying it wear protective clothing.

Контейнеры от химикатов, найденных на хлопковых полях Саатлинского района Фото-ifact.ge

Other pictures show empty chemical containers scattered around fields in Imishli. The labels indicate that the farmers used domestic pesticides made by the Azerbaijani Gilan Holding.

An OCCRP investigation recently revealed a link between Gilan Holding and the daughters of the Azerbaijani president, Arzu and Leyla Aliyeva, who are its main shareholders.

Agrarian expert Vahid Maharramov believes that it will the source of the pesticides will remain a mystery.

“Those guilty of what happened are so powerful that law-enforcement agencies are not in a position to deal with them.”

Fotolar ifact.ge saytına məxsusdur

The area of land on which Gulnara Gardashova and 25 other cotton workers were poisoned belongs to farmer Latif Khalidov.

Farmers used to buy pesticides for their fields without knowing about potential health and safety risks.

“We are ordinary people. We do not know what kind of chemical this is, if it is safe or not, we were not warned when we bought it. We saw that it did not have any effect on the weeds after we sprayed it, so we decided to clear the field of weeds manually. We hired some workers, and this is the result.”

After the first mass poisonings, cotton workers started to be more careful. Workers told reporters in Saatli that now, they ask if a pesticide has been sprayed, and if so, they refuse to enter the field.

“Farmers sow cotton out of fear of losing their land”

Lawyer Khalid Bagirov believes that violations of labor rights are particularly common in the agricultural sector: “People do not have labor agreements and they never have insurance. A person who spends the entire day weeding cotton fields under the baking sun makes eight to ten manat (four to five euros).”

But not all cotton workers are paid. In the past few years, employees of public-sector organisations and students had to work on cotton farms without getting paid. Economist Natig Jafarli says that the state not only forces citizens to work on fields for free (which is illegal) but also urges farmers to sow cotton:

“As a result of the land reforms, land in Azerbaijan has long become private property. However, in 2016, as a result of the referendum and under the pretext of efficient land use, the state imposed restrictions on the right of ownership. Executive authorities abuse these changes to legislation and make farmers sow certain products. Most farmers sow cotton out of fear of losing their land.”

Economist Togrul Mashalli believes that the government’s interventions in cotton-growing decreases the industry’s output and profitability. In 2017, the per hectare output actually decreased compared to the previous year, falling from 1,730 tons o 1,510 tons, despite all the efforts.

“When the executive authorities are forcing the farmers to sow cotton, the farmers either do not know how to increase their output, or what kind of pesticides they should use. Consequently, they fail to produce quality output, and they don’t make a decent profit either.”

Natig Jafarli does not believe that profit is the government’s main goal. “They view cotton-growing as a social project. Their aim is to create a lot of jobs, even if those jobs are paying low salaries, because they want to reduce social tension in the regions.”

In Azerbaijan, the official unemployment rate is just 5%, but analysts dispute those numbers. They say that the very methods used to calculate it do not conform to international standards, and therefore do not reflect reality.

For many Azerbaijanis living in the regions, the economic situation leaves no other choice. Most of the cotton workers who were poisoned have now returned to the fields. Some say they are still unwell but must work to provide for their children. One of the women, Hagigat Mammadova, says that after she was poisoned, her arm went numb and she is now unable to weed.

“Now I do not have an income, and nor do I have money to continue my treatment,” she complained.

A threat of boycott?

During the Soviet years, Azerbaijan successfully grew cotton. The industry declined in the 1990s, but recently underwent a renewal. Three years ago, the government indicated that cotton could become an alternative to energy after the decline in oil prices and declared cotton a strategic industry. Last year, the president issued a decree saying that output should grow to 500,000 tons a year by 2020.

The key buyers of Azerbaijani cotton are Turkey and Russia. Exports are growing: in 2016, the country exported 89,400 tons of cotton worth 24 million dollars and 207,000 tons worth 52 million dollars in 2017.

For cotton to grow, land is needed, and the numerous cotton plantations in Azerbaijan have already caused a noticeable reduction in pastures.

Хлопкоробы на поле, Саатлинский район, Июнь 2018. Фото:Мейдан ТВ
Хлопкоробы на поле, Саатлинский район, Июнь 2018. Фото:Мейдан ТВ.

Agrarian specialist Vahid Mahharamov estimates that a total of 50,000 hectares of pastures are being used as cotton fields, while the import of animal products into the country has tripled in the past two years. This has caused prices of staple products like meat, milk, herbs and melons to shoot up; people are paying three times as much as they used to.

Cotton Campaign coordinator Kirill Boychenko has described how the cotton industry works in Uzbekistan and Turkmenistan:

“In Uzbekistan, the government sets quotas for the production of cotton. Farmers who do not own land but lease it from the government are obliged to grow and sell cotton for low prices that do not match actual market costs. Each year the government forces students, teachers, medical workers and other public and private sector employees to collect cotton, and makes farmers fulfill the output norms. If they refuse, they are punished. In Turkmenistan, the situation is even more difficult. In addition to forcing adults, they are also relying on children. According to international conventions and recommendations, cotton-growing is a poisonous activity, and child labor is not acceptable.”

Cotton Campaign was established in 2005 to eliminate forced child labor in Uzbekistan and Turkmenistan. According to Boychenko, about 300 companies including major world clothing brands have already refused to buy cotton from these countries because of child labor. Starting in 2018, the United States banned cotton imports from Turkmenistan.

“I really hope that Azerbaijan will not go along the same path”, concludes Kirill.

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Azerbaijan

Boss sues cleaning lady for her interview with Meydan TV

The Azeri Times

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The chairman of the Gazakh District Utilities Services is suing an employee for 10,000 manats ($5,900) for claims that she made in an interview with Meydan TV.

On 26 July, Meydan TV published an interview with Royala Azimova, a cleaning lady at the utilities service in the Azerbaijani region of Gazakh. Azimova claimed that the organization’s chairman, Arif Heydarov, did not distribute the bank cards with which employees in Azerbaijan normally receive their salaries. According to Azimova, Heydarov kept the cards and withdrew all the salaries himself, keeping the lion’s share. Azimova said that she received 52 manats ($30) per month out of her official monthly salary of 122 manats ($72).

Azimova told Meydan TV that just before losing her job she confronted her boss. “This time, when the boss called me in and gave me half my salary, I said that I want my full salary. I’ve got three kids at home and my husband is disabled and can’t work. How long will I sweep the streets while you take my salary? He said that that’s the rule here, and if you don’t like it you’re welcome to leave.”

Now Heydarov is suing Azimova at the Gazakh District Court for 10,000 manats (($5,900) in damages for libel and insults to his dignity. In the lawsuit, Arif Heydarov denies Azimova’s allegations that he stole money from his employees’ salaries. “On 26 July I was told that Royala Azimova had had an article published about me on the Meydan TV website, the Qazaxlilar Facebook page, and Xalqxəbər.az,” the document reads. “I purportedly took her salary from her, gave her 52 manats and kept the rest. All employees, including Royala Azimova, received their salaries from Kapital Bank using their plastic cards. People who posted comments on those libelous and insulting articles used indecent and insulting phrases about me.”

The regional executive authorities declined to comment on the lawsuit, stating that the court will have the final word.

Royala Azimova’s husband, Mirjafar Huseynzadeh, told Meydan TV that he recently had a run-in with his wife’s former boss. “Using obscenities, [Heydarov] insulted me for our complaints to the press about him, and the two people who were with him came at me and grabbed one of my ears each and pulled,” Huseynzadeh says. “Arif Heydarov said that if I complained to anyone again, he would have my ears cut off.”

Huseynzadeh is disabled and unable to work. “We have three ill children, and my wife started working so our family could somehow meet its demands,” he told Meydan TV. “My pension is 165 manats ($97), and it’s not enough to support the family or to buy medicines. Arif Heydarov has no idea about our situation… If the court satisfies his suit, we’ll renounce our citizenship and go to embassies to seek asylum. An official demanding 10,000 manats from a hungry family that lives an intolerable life is the greatest disgrace.”

The Gazakh District Court will hold a hearing on Arif Heydarov’s suit against his former employee on 3 September.

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