Cities 31 (2013) 625–640

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Cities
journal homepage: www.elsevier.com/locate/cities

City profile

Baku
Anar Valiyev ⇑,1
School of Public and International Affairs, Azerbaijan Diplomatic Academy, 11 Ahmadbay Aghaoglu Street, Baku AZ1008, Azerbaijan

a r t i c l e i n f o a b s t r a c t

Article history: Baku, the capital of the Azerbaijan Republic, was one of the major industrial cities in the Soviet Union. In
Received 23 June 2012 contrast, the post-Soviet development of Baku has witnessed a major reconstruction with grandiose con-
Received in revised form 17 October 2012 struction projects, which is meant to turn the city into a global city. Consequently, the urban landscape
Accepted 20 November 2012
has been transformed in many parts of the city, while informal settlements and a deteriorating environ-
Available online 23 December 2012
ment have become the main scourges of Baku. However, while the administration has attempted to fol-
low the model of Dubai, in practice, the urban development is characteristically chaotic due to the
Keywords:
absence of effective regulation and planning. Indeed, with the continued influx of oil revenue, the city
Baku
Master Plan
is spending vast sums on new projects, buildings and infrastructure without any apparent strategic plan.
Decentralization This paper identifies the key forces and processes underlying the transformation of Baku and looks at the
Informal settlements problems haunting the city.
Post-Soviet transformation Ó 2012 Elsevier Ltd. All rights reserved.

Introduction where major funds are directed toward infrastructure projects, city
gentrification2 (beautification) and renovation. Demographic pres-
Baku is the capital of Azerbaijan and the largest city in the Cauca- sure and the demand for new apartments has forced the city to heav-
sus. The city is located on the Absheron peninsula with a territory ily invest in construction, with new high-rise towers constantly
covering over 2130 square kilometers, which is divided into 11 rising across the downtown area.
administrative districts that also includes 59 settlements (Agayev, In addition to changes in the infrastructure, the urbanization and
2007). The city proper borders the Absheron region in the north with de-industrialization of Baku has also helped to promote social class
its capital Khirdalan situated in the outskirts of Baku. Further to the structures that are similar to those in all large global cities. In con-
north, Baku borders the city of Sumgayit that used to be the hub of trast to Soviet times when the decision-making process was com-
the chemical and petro-chemical industries of the Soviet Union. pletely in the hands of the city administration, today the urban
Since the collapse of communism and the disintegration of the So- elites of Baku – consisting of wealthy businesspeople, government
viet Union, Baku has undergone a tremendous transformation. In officials, real estate developers, large-scale retailers and wholesalers
this context, demographic trends for the last decade have been quite – are responsible for decision-making. Thus, many projects in the
favorable to the development of Baku with a constant increase of city are being implemented following the logic of these urban elites.
population due to the high net in-migration from rural areas of Azer- This paper examines the nature of the urban transformation of
baijan. The official population of the capital reached 2.1 million in Baku during the post-Soviet period, while arguing that Dubai is the
2011, while, at the same time, Ganja, the second largest city of Azer- model of development that city administration and business elites
baijan, has only 316 thousands inhabitants (State Statistical Com- follow. Nevertheless, the model has proven to be not appropriate
mittee, 2011a). However, unofficially, it is estimated that up to because of the historical background, culture of governance, geo-
3.5–4 million people live, or commute, to the city every day. As a graphical location, and resources, as well as different population
consequence, it is not surprising that Baku exerts a disproportionally structure of the Baku.
significant influence on the national economy. The total GDP of Azer-
baijan in 2011 was $63 billion of which almost 71% was produced in
Baku (State Statistical Committee, 2011b). Baku in pre-Soviet period
Consequently, the city continues to be the leading recipient of
investments and much of this is funneled into the construction Prior to Tsarist Russian annexation, Baku was considered one
industry. In addition, government investment also favors Baku of the most deserted and forgotten places in the region, with a

⇑ Tel.: +994 12 437 3235x129; fax: +994 12 437 3236. 2

0264-2751/$ - see front matter Ó 2012 Elsevier Ltd. All rights reserved.
http://dx.doi.org/10.1016/j.cities.2012.11.004
626 A. Valiyev / Cities 31 (2013) 625–640

Picture 1. Nikolayev Street in Baku and the State Duma (on the right) in early of 20th century. The State Duma building is currently hosting the Baku Mayor’s office. Source:
Our Baku: History of Baku and Bakuvians, http://www.ourbaku.com/images/5/5e/Nikolaevskaya_str.jpg.

harsh climate and an absence of water, making the location Geographical location as well as the presence of natural
unattractive. According to Alexander Dumas, who visited Baku resources predetermined the course of urban planning in Baku.
in 1840s, the region was characterized as ‘‘place where tigers, Located on a peninsula surrounded by biggest lake in the world,
jackals, panthers, snakes and poisonous snakes roamed freely’’ the historical image of Baku is defined by several natural factors
(LeVine, 2007). Indeed, before Russian annexation in the early including the sea, the landscape, the climate and the limestone,
19th century, Baku was no more than a small fortress, far from used for construction of many of its historical buildings. The first
the major trading routes or cultural centers even though it had city plan dates back to the end of 19th century when the general
access to the Caspian Sea. However, in the second half of the plan of the inner city castle (Icheri Sheher) was drafted. The draft
19th century the city was transformed into the jewel of the envisioned construction of new buildings beyond the walls of the
Russian empire. The birth of the new Baku as an industrial city castle. The plan covered the region from the Bayil area at the en-
can be dated to 1847 following the drilling of the first indus- trance of Baku to the walls of the castle. The planning project
trial oil well. The period from the 1870s till the World War I was also designed for the Black City region – an area of oil extrac-
has been called the ‘‘first oil boom’’, or the golden period, of tion characterized by heavy pollution – and the White City Region
the development of Baku. From this period till 1918, Baku – residential and financial areas. Colonel N.A. Fonder Nonne de-
witnessed the rise of magnificent buildings in a Baroque style signed this first plan of Baku in 1890–1898. The general plan envi-
that was completely alien at the time to the architecture of sioned the location of square-shaped districts to the north of the
the Moslem city. castle, wide and large boulevard-shaped greeneries and squares
By 1913, Baku was producing almost 95% of all Russian oil (see Fig. 1, Fatullayev, 1998).
and 55% of the total global oil production (Hasanli, 1997). The Since Baku was the major port, the largest city and economic
revenue from this development gave birth to the emergence pearl of the Russian Empire’s south, the administration was espe-
of an urban class that was multi-cultural in composition. The cially concerned with its defence capabilities. The first urban plan
richest strata of Baku, often called the oil barons, were the took into consideration the possible vulnerability of the city.
main decision-makers in relation to the development of the Square-shaped district development served to turn Baku into a for-
city, typically constructing the most magnificent buildings. Dur- tress if needed. In 1911–1918, Azerbaijani architect M.G. Hacinski
ing the Russian empire period, Baku initially became the center edited and reformed Nonne’s plan and this became the base of the
of the Baku uyezd (district). Later, in 1846, Baku uyezd became future planning projects (Fatullayev, 1998). The Hacinski plan
the part of Shamakhy guberniya (province). However, in 1859 a envisioned the establishment of new districts in the city taking
devastating earthquake destroyed Shamakhy, the center of the into consideration a growing number of nuovirches, as well as trad-
province, and thus the government was transferred to Baku. ing and administrative class (see Fig. 2).
Consequently the province was renamed Bakinskaya guberniya.
The population of Baku also increased significantly. If in 1883
the population of Baku numbered around 45,000 people, so by Baku during Soviet period
1913 its number reached 200,000 people (see Picture 1,
Bceco⁄pyaz gepegbcm yacekeybz 1926 uola, n. 14, Paradrapcraz The rapid and unregulated development of Baku was
CUCP, u. Mocrda, 1929). interrupted by the Russian revolution of 1917. As a consequence,
 A. Valiyev / Cities 31 (2013) 625–640 627

Fig. 1. Fonder Nonne Plan 1898–1900. Source: The State Committee on Urban Planning and Architecture of Azerbaijan Republic, The Greater Baku Regional Development Plan,
http://www.boyukbaki.az/info_en.php?section=3&subsection=13.

initially Baku became the capital of the Azerbaijan Democratic Azerbaijan. Moreover, from this point onwards, Baku’s develop-
Republic (from 1918 till 1920), before the Red Army occupied the ment during the Soviet period was no different from many other
city. For the next 70 years, Baku was the capital of the Soviet cities of the Soviet Union.
628 A. Valiyev / Cities 31 (2013) 625–640

Fig. 2. M.Q. Hacinski Plan 1911–1918. Source: The State Committee on Urban Planning and Architecture of Azerbaijan Republic, The Greater Baku Regional Development Plan,
http://www.boyukbaki.az/info_en.php?section=3&subsection=13.

The first decade of the Soviet administration in Baku between the entire Absheron peninsula. The major purpose of the project
1920 and 1930, is often called the Decade of Transition. This was the development of satellite cities that began to grow in
period saw the construction of wide new avenues, new suburbs vicinity of Baku. L.A. Ilyin, the chief architect of Leningrad, imple-
and standardized buildings (Khanlou, 1998). Within this period, mented the planning project. The major idea of the general plan
the style of architecture called Constructivism dominated the was establishment of the center of the city and a boulevard in
urban structure. This type of architectural style was heavily the most suitable place – along the waterfront. Based on indus-
influenced by the Bolsheviks who saw urban space in the context trial development, the urban population had been calculated up
of utilitarian purposes (Aliyev, 1998). Thus, most of the buildings to include a million people over the estimated period. Placement
constructed during this period were fashioned in a way to serve of so many people in the Baku landscape raised difficulties and
people, not for aesthetics. demanded an increase in the density of construction and the
In 1924–1927, under the leadership of architect A.P. height of buildings. The shape of the city, the landscape and
Ivanisky urban planning also served utilitarian purposes. The seismicity of urban area were reflected on the plan (see Fig. 4,
first plan of Soviet Baku studied the climate, housing utility Fatullayev, 1998).
conditions, development perspectives, and the production World War II interrupted the normal pace of Baku development
profile of industrial regions in addition to a number of other when around 20–25% of the country’s male population was con-
aspects. The administration paid specific attention to construc- scripted to the war, mainly from industrial Baku. The significance
tion of residential areas with better living conditions, estab- of Baku to the Soviet Union during the period of World War II is dif-
lishment of green spaces and street transport (see Fig. 3, ficult to overestimate. Around 70–75% of all Soviet oil produced be-
Fatullayev, 1998). tween 1941 and 1945 came from Baku (Agayev, 1995). Indeed this
Soviet Constructivism ended abruptly in middle of 1930, when was also noted by the Germans who reacted by undertaking a mil-
the Soviet administration called for return to the use of national itary thrust from the Northern Caucasus toward Baku, at the time
architectural forms. In Baku, the call resulted in the re-introduction of the siege of Stalingrad, in order to stop the oil supply from Baku
of ornamental arches, columns, inner courtyards, balconies and to the frontlines.
fountains (see Picture 2, Aliyev, 1998). Later, the postwar period was marked by a massive investment
Due to the increasing population of the city, the urban in the oil industry, despite the fact that new oil fields in Siberia had
planning process of Baku also changed. In 1932, the State Urban been discovered. Furthermore, Baku became the center for produc-
Design Institute under the leadership of V.N. Semyonov was tion of oil-related industries and a training center for oil experts.
invited to Baku to continue the planning project of Baku and Indeed, the first city on the sea, Oil Rocks, was built in the Caspian
 A. Valiyev / Cities 31 (2013) 625–640 629

Fig. 3. A.P. Ivanisky Plan 1924 – 1927. Source: The State Committee on Urban Planning and Architecture of Azerbaijan Republic, The Greater Baku Regional Development Plan,
http://www.boyukbaki.az/info_en.php?section=3&subsection=13.

Sea near Baku in 1947.3 Subsequently, as a result of the expansion of plan for resort zones that would be established in the north of
the oil industry, between the late 1950s and the mid-1980s, a special Absheron peninsula (see Fig. 5).
emphasis was also placed on housing. Specifically, in order to solve The Master Plan served several purposes including functional
the housing problem due to migration of rural people into the city, zoning of the peninsula area; development of residential areas of
the Soviet administration heavily invested in the construction of Absheron taking into consideration Baku’s city limits, establish-
cheap five-story buildings. This was also the period when many mic- ment of an urban agglomeration provided with improved employ-
rorayons (micro-districts) were constructed in Baku reflecting the ment, education, housing, culture and recreation opportunities;
central socialist urban planning concept of ‘‘Ideal Communist City and environmental wellness (see Fig. 6).
Planning’’. In the jargon of the Bakuvians, such buildings were sim- The Master Plan envisioned that population of Baku and
ply called khrushevka or leningradka. Therefore, according to the final Absheron peninsula would reach 2.26 m people by 2006 while
Soviet census, by 1979, the population had grown to almost 1 mil- housing area would reach 22.3 million m2 or 18 m2 per capita
lion from a city of approximately 453,000 in 1926 (see Picture 3, (see Fig. 7).
State Statistical Committee, 2011a).
In the post-war years, state socio-economic development and
Urban development since independence: Dubai on the Caspian?
rapid urbanization, as well as heavy housing construction charac-
terized urban planning of Baku and Absheron peninsula the first
The collapse of the Soviet Union and the transition toward a
post-war general plan of Baku was finished in 1954. This time
market economy enabled Baku to make tremendous progress in
the plan considered the growing population of the Absheron pen-
urban development and become one of the fastest growing cities
insula and the suburbs of Baku. The last Master Plan of Baku was
in the region of the Caucasus and Central Asia. As in many other
prepared in 1985 and covered a 20-year period. The plan included
Central and Eastern European countries, the rate of post-socialist
the Baku region and the Absheron peninsula planning; a transport
urban change in Baku was striking with privatization being ‘‘the
scheme for Baku, planning of the Baku region proper and a general
leitmotiv of post-socialist urban change’’ (Bodnar, 2001; Stanilov,
2010). Specifically, the post-Soviet urban transformation in Baku
3
Oil Rocks or Neft Dashlary (in Azerbaijani) is the city-type settlement that was was characterized by many positive characteristics. Within two
constructed in the sea during 1940s–50s. Located 42 km South-East of Absheron decades the city’s landscape has changed completely. Most nota-
peninsula it was built on metal piles that were fixed to the bottom of the sea in a few bly, new high-rise buildings, plazas and business centers were built
metres of height on sea level. At the end of the 60s the total length of piers fulfilling
the duty of specific ‘‘streets’’ was over 200 km. The helicopter was used for carriage of
in Baku. Moreover, although the concept of a Central Business Dis-
people, foodstuffs and other items. At the peak of its activity Oil Rocks hosted around trict is absent from the urban planners’ jargon in Baku, some
2000 people. resemblance of a CBD has been established in the areas close to
630 A. Valiyev / Cities 31 (2013) 625–640

Picture 2. The Academy of Science. Constructivism period. Source: Khanlou (1998).

Fig. 4. L.A. Ilyin Plan 1934 – 1937. Source: The State Committee on Urban Planning and Architecture of Azerbaijan Republic, The Greater Baku Regional Development Plan,
http://www.boyukbaki.az/info_en.php?section=3&subsection=13.

downtown near the Central Bank. Continuously, billions of dollars the city at the apex of regional and European attention. The logic
of investments poured into city’s economy, while a variety of inter- of this development in Baku highlights that the government and
national events have put Baku on the media map. For example, the urban elite are trying to turn the city into the main tourist destina-
Eurovision song contest was held in Baku in May of 2012, placing tion of the region as well as an economic powerhouse similar to
 A. Valiyev / Cities 31 (2013) 625–640 631

Picture 3. The Soviet style building. A Typical Soviet khrushevka in one of Baku’s micro-districts. Source: Author’s personal archive.

Fig. 5. Current Master Plan of Baku and Absheron region 1986–2006. Source: The State Committee on Urban Planning and Architecture of Azerbaijan Republic, The Greater
Baku Regional Development Plan, http://www.boyukbaki.az/info_en.php?section=3&subsection=13.
632 A. Valiyev / Cities 31 (2013) 625–640

Fig. 6. Proper Baku Master Plan. Source: The State Committee on Urban Planning and Architecture of Azerbaijan Republic, The Greater Baku Regional Development Plan,
http://www.boyukbaki.az/info_en.php?section=3&subsection=13.

Dubai. Baku’s development after 2004–2005 resembles Dubai’s ra- The attraction of tourists is not the only objective of the busi-
pid expansion. But the work that Dubai carried out for almost ness elites, as the successful example of Dubai also encouraged
45 years, Baku was trying to accomplish within a decade. In addi- the business elites to consider turning Baku into a business center
tion, just as the Dubai rulers tried to turn city into a transportation for the region. Similar to Dubai’s policy to create cluster type satel-
hub by constructing Port Rashid and Jebel Ali (Pacione, 2005), the lite-cities – Dubai Internet City or Dubai Media City – the business
government of Azerbaijan took a strategic decision to construct a elites, with support of government proposed construction of Baku-
new modern port 60 km south of Baku. The port would serve to city, which is a 29 square kilometer coastal area designated for
facilitate transportation of goods and passengers from Central Asia business facilities (Saifutdinova, 2010). In terms of the target audi-
to Europe and back. As in Jebel Ali, the government has plans to ence, Baku-city is intended for business people, diplomats, bankers,
establish a free trade zone near the port spurring a trade turnover and students who are seeking to enjoy their leisure time. As a
of the country. Second, despite geographical constraints, the busi- consequence, it will not include housing for employees, though
ness elites of Baku and the government continue their attempts to Baku-city will also include an allocation of certain lots of the land
lure foreign tourists by way of massive investments in leisure destined for the construction of university campuses. Currently,
attractions and futuristic projects. As in Dubai, brand new hotels most of the universities are located in the downtown area, or close
such as the Marriot, Hilton, Jumeyrah, Kempinsky and Four Sea- to the center of the city, which results periodically in thousands of
sons have been opened in Baku. In an attempt to establish Baku students overcrowding the center. Here, the logic of the business
as a booming center, or tourist Mecca, the government is trying class is understandable in that, by transferring the universities
to market the city for various international events and sport com- from the downtown area to the outskirts of the city, they can divert
petitions. For instance, the victory of Azerbaijan in the Eurovision the flow of the people and ease the pressure on transportation and
song contest led to construction of the Crystal Hall which cost other facilities of the city. Simultaneously, these same business
around $76 m (Economist, 2012). In general, the business elite people would then be able to exchange the newly built suburban
are particularly fond of events such as these that bring additional campuses for the original university property downtown that
profits for them from the thousand of tourists who attend (see could then be converted for business use, thus obtaining an addi-
Picture 4). tional return on their original investment. This plan also copies
 A. Valiyev / Cities 31 (2013) 625–640 633

Fig. 7. Development of Baku–Absheron Peninsula 1822–2011. Source: The State Committee on Urban Planning and Architecture of Azerbaijan Republic, The Greater Baku
Regional Development Plan, http://www.boyukbaki.az/info_en.php?section=3&subsection=13.

Dubai’s policy on university clusters located in one area of the city islands and 19 districts in the Caspian Sea. The archipelago will
(Pacione, 2005). cover an area 24 sq/km by 8 km in length and 3 km in width. The
Another example of a grand project of the post-Soviet period is total length of the boulevard islands will be 50 km. The project
the construction of the Baku Flame Towers that are gradually was launched 1.5 years ago and construction of 6–7 residential
becoming a symbol of the city (for example they are frequently buildings is underway on one of the biggest islands. It is expected
placed on postcards bought by visitors). The towers symbolize that, in general, the city, when completed in 2022–2023, will host
the long history of fire worshippers that considered Azerbaijan as 1 mln residents. Overall, it is expected that construction of these
a birthplace for prophet Zoroaster. The Baku Flame Towers include artificial islands will cost $100 bn of which $30 bn will come from
a residential tower that can accommodate 130 residential apart- foreign investors and another $30 bn from apartment sales.
ments over 33 floors; a hotel tower that consists of 250 rooms According to the project, the price of completely renovated apart-
and 61 serviced apartments; and the office tower that provides a ments, will be around $4000–$5000 per square meter (Ahmadov,
net 33,114 square meters of office space (see Picture 5, Dia 2012). One does not need to be an expert to see the striking simi-
Holding, 2011). larity between the Khazar Islands and the Palm Islands in Dubai.
In addition to the iconic Flame Towers, the Heydar Aliyev Cen- What is surprising about this project is how enthusiastic business
ter is another pearl of the construction boom in Baku. Occupying people and government officials are. None of the involved parties
57,519 m2, the Heydar Aliyev Cultural Centre, that hosts a confer- seems willing to imagine the huge problems and dangers that
ence hall, library, and museum, was opened in May of 2012. De- may plague this ambitious project (see Picture 7).
signed by famous architecture Zaha Hadid, the center is one of There are several issues that could make such a project unfeasi-
the many buildings that have been built in Baku over the last ble in Baku. First, the price of apartments will not allow average
2 years that represent a move away from the Soviet-dominated Azerbaijani to buy apartments (even with a mortgage). The num-
past and toward a national identity. The center is part of a larger ber of people capable of buying such apartments will hardly reach
redevelopment area and is expected to be the hub of the city’s 5% of the intended one million residents. Second, unlike Palm
intellectual and cultural life (see Picture 6, Buildopedia, 2011). Jumeirah, it is hard to imagine that foreign investors or celebrities
Last but not least of the endevours in this list is the Khazar Is- would buy apartments in a volatile region with uneasy neighbors.
lands project. The project, spearheaded by the local company, Last but not least, the inability of the Nakheel company (construc-
Avesta, covers a 3000 ha area. It will consist of 41 different-sized tor of the Palm Islands project) to sell their apartments has not
634 A. Valiyev / Cities 31 (2013) 625–640

Picture 4. The Crystal Hall Venue constructed for the 2012 Eurovision 2012 Song Contest. Source: Eurovision 2012 Contest, http://eurovision-2012.com/?p=3416.

Picture 5. The Flame Towers. A symbol of modern Baku depicted on tourist postcards. Source: Dia Holding Website, http://www.diaholding.com/.
 A. Valiyev / Cities 31 (2013) 625–640 635

Picture 6. The Heydar Aliyev Center. A New Convention Center. Source: Dia Holding Website, http://www.diaholding.com/.

Picture 7. Khazar Islands Project. Source: Khazar Islands, http://khazarislands.com/.

stopped Avesta from continuing the project. Overall, it seems that influx of oil money not supported by production, Baku is becoming
urban elites are more concerned with making Baku livable for for- an extremely expensive city to live in and even to visit.
eigners and turning it into a tourist destination, rather than a city If we try to compare Baku’s development with Dubai, we can
for its citizens. With high prices for almost everything and an see that both cities share many things in common. The first
636 A. Valiyev / Cities 31 (2013) 625–640

similarity is government-led development. As in Dubai, Azerbai- two tiers are not properly defined and no official documents spec-
jan’s government, not the private sector, has taken the lead. Even ify the exact distribution of powers.
the private sector is divided among the business groups closely In 1999, Azerbaijan introduced the system of self-governance or
associated with the government. It allows the government to ob- bElEdiyE (municipalities). Currently, 1718 municipalities and
tain financial support if needed for any type of project. Govern- 15,682 municipality members exist in the country whereas only
ment-led development and no public involvement, make recently the number of municipalities was around 2750 (Agayev,
decision-making in Baku as rapid as in Dubai. If the government 2007). Furthermore, municipalities are elected every 4 years in
needs to build a new facility, sport center, industry or port, deci- general municipality elections, and there are now 52 municipali-
sions on such a strategic issue will be taken very quickly. Last ties in Baku and the surrounding area. Initially, it was envisioned
but not least, is the similarity in supply-generated demand. As in that eventually the powers of EP would be smoothly transferred
Dubai, Baku is trying to build everything to overcapacity against to municipalities, making the city management system democrat-
the advice of experts. Whether it is a hotel, housing or grandiose ically elected. However, when the government did not pass the
projects such as the Khazar Islands, the logic of the business elites functions and responsibilities of the EP to municipalities, the sys-
can be explained by the phrase ‘‘supply goods or service and let it tem of governance became more complicated. Today, municipali-
generate its own demand’’ (Hvidt, 2009). ties lack both political and financial powers and have in practice
Thus, it seems that Baku is fitting Dubai’s model on certain became an additional tier of government in terms of implementing
parameters. However, contrasts between the cities can completely the orders and instructions of the EPs. The Congress of Local and
turn the luck of Baku. First, geographical constraints prevent Baku Regional Authorities of the Council of Europe have proposed to
from becoming a global city. Cities that transform from small have mayoral elections in Baku as well as to establish a large urban
towns to mega cities are usually ports with access to an ocean. Sin- municipality. However, government officials have stated that the
gapore, Hong Kong and Dubai are in the center of sea trade with issue of establishing a single municipality could be seriously dis-
easy access to neutral waters. Baku, with certain exceptions, could cussed only in 5 years (Avicya, 2010).
be considered a land-locked city since the Caspian Sea does not
have access to the ocean. Second, unlike Dubai, Baku is the capital
of a state where almost 80% of the budget and GDP is generated. Informal settlements and housing market in Baku
Thus, a big share of its income is distributed all across the country.
Third, Baku’s (as well as Azerbaijan’s) economy is not diversified Despite many positive changes, Baku has not been able to avoid
and can be characterized as rentier state. The non-oil sector of problems that often plague developing cities. As in many other cit-
the country and the city’s economy is marginal. Unlike Dubai, ies, these problems included a retreat from planning; lack of insti-
whose economy is characterized as knowledge-based with high tutional coordination; poor implementation of laws; chaotic
growth, high value-added products and global mobility, Baku’s development patterns; suburban sprawl and a surge in informal
economy is not diverse at all and the major source of the income construction. Moreover, the impact of transformation was felt in
depends on highly volatile commodity – oil. Finally, is the fact that the loss of open space in urban areas, the privatization of the public
Dubai’s success was highly dependent on historical circumstances realm and social stratification. However, while in Central and East-
of international surplus capital looking for profitable investment ern European cities the process of transformation was accompa-
possibilities in the 1990s and early 2000s. Dubai was lucky to be nied by a decentralization of power and a greater role of public
able to take advantage of the opportunity to create a significant participation and NGOs, in Baku. In contrast, governmental policies
build-up of physical and human assets within a relatively short led to further centralization, as well as an absence of democratic
time (Hvidt, 2009). On the other hand, Baku’s rapid development participation. Indeed, a Byzantine system of governance inherited
began during a period of world financial and economic crisis, when from Soviet times, as well as ineffective resource management
excess capital rushed to save the economies of Europe and other and corruption, have hampered the city’s sustainability and pre-
states. Thus, the only investment that spurred development in cluded reforms in public administration. At the same time, the ab-
Baku was government money received from oil sales. sence of a clear vision creates endemic problems such as
environmental pollution, urban sprawl, informal construction of
dwellings, as well as political and administrative fragmentation.
Local administration One major issue facing Baku’s development is the absence of a
Master Plan that would guide the development of the city. As
The structure of local administration of Baku does not differ was mentioned before, the last Master Plan was designed and
much from the Soviet period. Still, the president of the country ap- introduced in 1984 and expired in 2005. As Kessides (2000) argued,
points the mayor of Baku, who is usually called the Head of Exec- the usual socialist city ‘‘was structured with little regard to the lo-
utive Power/EP, and only the president of the country can replace gic of market forces and the spatial transformation of the post-
the mayor. At the same time, the president appoints the heads of socialist urban areas in accord with the principles of market
all eleven administrative districts of Baku. Technically, Baku’s efficiency has required significant adjustments in the spatial
mayor is the head of the city, but he does not have the power to fire arrangement of urban activities’’. Baku’s original Master Plan did
or replace the heads of an administrative district. Thus, Baku’s not envision the collapse of the central economy and its transfor-
mayor is obliged to cooperate with the heads of districts and take mation into a market economy. The city’s new economy required
joint decisions. However, at the same time no proper mechanism of new types of buildings for the banking sector, hotels, business
decision-making has been established. Indeed, it was logical to as- and commercials projects among others. Moreover, the original
sume that a city council would be the next step, where the mayor plan did not anticipate the explosion of Baku’s population. Thus,
and eleven heads of districts could come together and take deci- without a Master Plan, Baku is developing in unorganized fashion
sions. Unfortunately the City does not have a Council bringing to- and the absence of zoning is leading to chaotic construction
gether the heads of EP of districts under Baku’s mayoral (Khanlou, 2005). In fact, such a situation favors the business elites.
leadership to solve problems. Each district solves problems in iso- Without proper plans and zoning ordinance requirements, busi-
lation, or occasionally in consultation with the mayor’s office. ness corporations can construct any type of building at random
Although Baku has a two-tier administrative system, in terms of in Baku, regardless of the consequences. Indeed, development
the city mayor and EP heads at district level, the powers of these and construction has proceeded so fast that the inherited Soviet
 A. Valiyev / Cities 31 (2013) 625–640 637

legislation has not been able to keep pace (Khanlou, 2005; Valiyev, problem of informal housing. However, before entering a discus-
2009). sion on this situation, it is essential to define these terms. In Azer-
The situation with planning and zoning in Baku is exacerbated baijani, informal housing, or construction, in most cases, involves
by the fact that no single agency has been given a unifying and some kind of dwelling built without legal documentation or per-
coordinating responsibility over it. Several agencies and commit- mit. In many cases, such construction does include some docu-
tees oversee such work without coordinating with each other. mented action issued by the municipalities, or local executive
The absence of a regulating body also adds to the problem of qual- government, for a fee, which is often a bribe. However, the next
ity housing and construction. In contrast, during the Soviet period, elected municipality, or other state agencies, very often do not rec-
some restrictions existed in terms of building height due to Baku’s ognize these documents as legal. The phenomenon of informal
location in an earthquake prone zone. These restrictions have been housing initially appeared in Azerbaijan in the 1990s and there
lifted in the post-Soviet period, and the justification for the lifting were several reasons that provoked the problem. First, after inde-
of these restrictions is being debated. It is true that since indepen- pendence, and the conflict with Armenia, in the 1990s, the country
dence, there has been only one significant earthquake (in 2000) faced huge problems relating to internally displaced people (IDP)s,
and that the few newly built high-rises that existed at that time which numbered around 600,000. Many IDP families did not have a
did not suffer significant damage. However, over the last 10 years choice, but rather moved to Baku where they were able to find
the number of high-rise buildings has increased significantly, and jobs. However, the high price of housing in Baku, as well as prefer-
concerns with safety continue to grow. ences of rural people to live on land rather than in buildings played
The rapid growth of Baku’s population has also significantly af- its role. Second, while there were homeless families who applied
fected the housing market in the country. The old Master Plan for construction permits, the complex level of bureaucracy meant
envisioned that population of Baku, estimated at 1.7 m in 1985, that obtaining a response from the authorities could take several
would grow to 2.26 m by 2006. Population forecasts considered months. Naturally, such families could not afford to wait such peri-
both natural growth and migration. The plan estimated that the ods before starting construction on their dwellings. Furthermore,
majority of the growth would be realized in small and medium- there is no strict control, or penalties, which target informal con-
sized cities within the Absheron peninsula that would not create struction. As a consequence, the absence of modern urban develop-
more pressure on Baku City itself. The plan estimated that total ment plans further exacerbates the problem. In addition, systemic
residential housing would be 19.9 million m2 or 11.5 m2 per capita corruption and the ineffective management of services also aggra-
in 1986. It was further forecast that per capita residential space vate the problem. As in Turkey, these houses are often called geceg-
would be increased to 18 m2 and the total additional residential ondu, which relates to the fact that such houses are built ‘over one
space in Absheron peninsula would reach 22.3 million m2 in night’, in order to avoid interference by police or other administra-
2006. One of main purposes of the master plan was to provide tive agencies. Once informal housing is inhabited, the police re-
housing to every family in Baku City until 2000. The collapse of quire a court eviction order that could take years to obtain. The
the Soviet Union and the inability of the Master Plan to reflect such common features of informal housing in Baku and the suburbs
dramatic changes led to complete chaos in the housing market. are squatting on another person’s land (including State or munici-
Baku stood in the line with many other cities of Asia and some pal property); no legal documentation (including construction per-
in Europe (such as Tirana or Istanbul) in being unable to avoid the mits); unsafe structures and locations (buildings erected on utility/

Picture 8. Informal settlements in one of Baku’s suburban areas. Source: UN Commission for Europe (2010).
638 A. Valiyev / Cities 31 (2013) 625–640

infrastructure pipelines and gas, oil and electricity networks); Analyzing the housing market of Baku, it is worth mentioning
extensions of existing buildings with no construction permits; that, for the last decade, construction has grown by 7.5 times. To-
and violations of the requirements for construction permits day, over 1500 construction companies operate in the country. In
(including technical norms and standards) (see Picture 8, UN Com- 2011, around 1,351,200 square meters of housing were commis-
mission for Europe, 2010). sioned in Baku, 25% more than in 2010 (BakuBuild, 2012) However,
By some raw estimates (UN Commission for Europe, 2010), the high oil prices and the influx of oil money to Azerbaijan since
there are approximately 800,000 informal constructions in Azer- 2005, has resulted in skyrocketing apartment prices. As a conse-
baijan, including 500,000 in the Baku area alone. It is suggested quence, a two-bed room apartment in Baku could be as expensive
that 30% of Azerbaijan’s and 50% of Baku’s population, approxi- as one in Prague, Berlin or Frankfurt. The financial crisis of 2008
mately 4 million, live in informal housing. An obvious problem significantly affected the prices and they dropped by between
for residents is that informal houses lack addresses and are not 25% and 35%. It is interesting to mention that the financial crisis
connected to basic utilities such as running water (UN Commission did not have a great effect on the Azerbaijani economy since it is
for Europe, 2010). However, a number of positive improvements heavily dependent on oil and gas export. It also did not affect the
did occur between 2005 and 2009, when more parks and schools, purchasing power of the Azerbaijani population. Nevertheless,
roads, and new houses were provided by the state. Moreover, the prices went down because the financial crisis hit Azerbaijani
informalisation around Baku does have clear social and environ- citizens living in Russia who are the major buyers of Baku apart-
mental implications that need to be considered. For example, there ments. Around 1 to 1.5 million citizens of Azerbaijan reside in Rus-
is now a growing concern about these settlements and those com- sia as migrant laborers. By some estimates (Markedonov, 2009),
munities operating beyond formal regulations. around $1.8–2 billions are transferred to Azerbaijan every year to
While informal residents remain socially, environmentally and support the families of these workers. The same migrants laborers
politically vulnerable, the authorities are also experiencing difficul- were the main buyers of apartments in the period of 2003–2008
ties with properly managing the land. The most significant concern keeping prices high. Often, the affluent migrant worker would
of the government is the fact that many of these informal houses buy two, or even three, apartments in downtown Baku without
were constructed in the areas near electricity pylons, gas pipelines residing there for years. Thus, the financial crisis that hit the world
and other infrastructural utilities, despite appeals from their own- and Russia in particular, affected the purchasing ability of Russian-
ers. According to public officials, around 5317 properties were built Azerbaijanis. The prices for apartments in Baku before the crisis
too close to gas pipelines, of which 2814 were in Baku, 543 in the was not affordable at all and a middle-income class family earning
nearby Absheron region and the rest scattered around the country. from $700 to $1500 would hardly be able to buy an apartment that
Some 70% of the buildings were houses, while the rest were restau- equal to their 10-year income. Thus, the same circle of people –
rants, shops, and other businesses (Hagverdiyeva, 2010). In 2008, governmental officials, businessmen closely related to government
the government started seriously thinking about destroying houses as well as foreign citizens – were buying apartments in Baku. In
near strategic facilities, but were met with fierce opposition from 2007–2008, in order to revive the housing market, the government
inhabitants. Yet another problem with informal housing is the fact launched a mortgage system letting people borrow money to buy
that many of them are built on the lands belonging to various gov- apartments. However, the mortgage system did not affect the pur-
ernmental agencies and the people who purchase them from munic- chasing power of the middle class for several reasons. First, the
ipalities who do not have rights to sell them. Thus, for example, the maximum amount of funds that citizen can borrow for 25 years
State Oil Company of Azerbaijan Republic (SOCAR) revealed that was limited to $65,000 and the citizen should contribute at least
thousands of houses are built on their land. Indeed, around 5000 15% of the funds for purchasing of apartment. The sum was too
informal houses and facilities alone are built on territory owned small to buy a decent apartment since a 2 or 3 room apartment de-
by the company Balakhany-Sabunchi that spans across 570 ha. SO- cently renovated costs between $100,000 to $130,000. Thus, the
CAR states that it is not only illegal to build on these territories but people only borrowed money to buy apartments in suburbia or
also very dangerous, since the waste on these lands is hazardous far from downtown. Second, the majority of newly constructed
for human health. The response from the people inhabiting these houses in Baku do not have proper documentation. They have been
sites is that they had bought the land parcels from the municipali- built by construction companies and sold to buyers before the state
ties. As a consequence, the government prefers to close their eyes commission inspected them. Most of the newly constructed build-
to this issue, but the problem continues to expand. SOCAR has re- ings in Baku did not pass inspection and thus do not have docu-
acted by demolishing several houses built on its territory, which mentation proving the property rights of the resident. The
has lead to violent clashes with residents, who fear that they will residents usually only have a piece of paper confirming an agree-
have to move to yet unknown locations to resettle (Avciya, 2012). ment between the construction company and the resident. Only
Another major problem for Baku is the absence of a regulating after the building passes inspection and gets approval, is a resident
body that could inspect and ensure the safety of informal build- able to register his or her property and get proper documentation.
ings. Currently, only the EPs, or municipalities, can provide permits In order to get a mortgage, the citizen needs to leave collateral at
to construct houses or facilities. However, at some later date, such the bank in the form of documentation for his/her new apartment.
properties are often considered dangerous to life by the Ministry of Thus, the citizens are forced to buy apartments in the secondary
Emergencies (MoE) and scheduled for destruction. In the absence market or in old buildings that have proper documentation. By
of a regulating body, tragic events frequently occur. For instance, 2011 the government allocated around $190 million to revive the
in 2007, some 20 rural migrants south of Azerbaijan were killed housing market. By the end of 2009, over 3000 mortgage loans
in one of the nearly completed buildings in Baku. MoE claimed that had been given to people for buying apartments (Azerbaijan Mort-
uneven foundations and low-quality construction work caused the gage Fund, 2010). Despite these measures, the property market lost
tragedy (Ismayilov, 2007). The tragedy opened up new debates 20% of its value in 2009 alone and over 30% over the period of the
about the ability of government to keep up construction safety crisis.
standards in an earthquake-prone zone. According to Bahruz Pan- Today, the weighted average cost of 1 square meter of housing
akhi, the head of the department of seismology at the National in Baku is $780. Apartments in the primary market for bulk buyers
Academy’s Research Institute on Geology, an earthquake measur- were offered at an average of $688, business class at $1250, and
ing 4.5 on the Richter scale could destroy many buildings, regard- luxury apartments at $2380 per m2 (Turan, 2011). The housing
less the number of stores (Ismailzade, 2006). market in Azerbaijan is also characterized by the lack of an ‘‘urban
 A. Valiyev / Cities 31 (2013) 625–640 639

growth machine ‘‘consisting of consultants, bankers, brokers, departure time. Meanwhile, the large monitors on the central
agents, and realtors (Logan & Molotch, 1987). In Baku, construction streets were aimed at improving life for drivers by showing them
companies are free to define the prices for houses and other prop- the roads in the city where the traffic jams were, helping drivers
erty. In addition, commercial property in Baku has experienced a to avoid such trouble spots. Nevertheless, the absence of an inte-
boom over the last 10 years. However, due to the current crisis, grated approach to solving urban transportation problem did not
interest in real estate in Baku is decreasing. The sale of real estate allow the intellectual system to effectively solving the problems
in 2011 dropped by 15% in comparison with the previous year. To- and in fact did not help much overall.
day, the price of commercial property in Baku is around $2720 per
square meter, a decline from the summer of 2011, when the price
of commercial property in downtown Baku cost around $4860 for a Quo Vadis Baku?
square meter; territories further away from downtown cost from
$760 to $2144 (Khalilov, 2012). It is hard to apply any literature on urban regimes to the case of
Baku because of the nature of politics in the city. Baku, in contrast
to case study cities such as Atlanta, New Haven, Chicago or New
Urban transportation York is not an independent body with an elected administration,
vibrant grassroots organizations or an independent business sector
On the eve of independence, Baku had an effective and efficient that shapes its development. Development is totally in the hands of
system of public transportation. The city had developed a subway the government in Baku. Moreover, the absence of fear of losing
system while trams, trolleybuses and buses were typically able to elections by the mayor’s office and no public pressure make the
meet the demands of the city. However, the demographic explo- process of development opaque and highly patriarchal. Research
sion between 1992 and 1999 has completely changed the situation, conducted by the author in 2010–2011 highlighted the deep disap-
and the public transportation is not able to serve the dispropor- pointment of Baku inhabitants in relation to urban development.
tionally increasing population. At the same time, under-financing The majority of people interviewed among the wider public con-
and the absence of funding for public transportation has further sider themselves excluded from the decision-making process.
exacerbated the situation. As a result, within a few years, new Moreover, Bakuvians are losing the feeling of ownership of their
types of transportation – marshrutka-jitneys – appeared on streets city. They have now started to believe that the city no longer be-
of Baku. With a maximum capacity of 12–14 people, these mini longs to them; they have also begun feeling uncomfortable in the
taxis were able to partially solve the mobility problem. However, environment, which has led to a passive attitude towards the deci-
these mini-taxis also undermined the tram and trolleybus system sion-making process. Most of those interviewed had come to the
in Baku. Being slow and costing as much as jitneys, trams and trol- conclusion that protests will not lead to any change.
leybuses were not able to compete. Thus, in 2000 trams and trol- In this context, one remarkable feature of the redevelopment of
leybuses disappeared from streets of Baku. However, the jitneys Baku is the absence of grassroots organizations. In many cities,
were not able to survive either. From the beginning of 2006, the such as Prague, Moscow or Kiev, there are citizen groups trying
city government decided to change the image of the city and to influence the process by seeking information, writing petitions,
started substituting regular large buses. Consequently, by 2010 and providing alternative expert opinions, though they are not al-
all mini-taxis also disappeared from the streets, replaced by the ways successful. However, in Baku, this is not happening, and the
large buses. However, even today, the urban transportation system rather large and active NGO community of Baku is remarkably
of Baku experiences serious problems. First, disappearance of uninterested in the process of urban transformation. Many of the
trams and trolleybuses negatively impacted the ecological situa- people interviewed also complained about the fact that govern-
tion and CO2 emissions. Thus, the old Master Plan envisioned that ment and urban authorities do not inform them about proposed
in 2006 around 30% of passenger transportation would fall on elec- projects. At the policy-making level, there is a clear deficit of infor-
tro powered vehicles (against 17% in 1986). The first arises from mation. The public is usually informed about redevelopment pro-
the rapid motorization of the country after the collapse of the So- jects after the decisions have already been reached, the projects
viet Union. Indeed, in 2000 around 440,000 cars were on the roads approved and the construction, or renovation, is about to begin.
of Azerbaijan including 146,000 in Baku alone. By 2010 around one The general public does not participate in the process of making
million cars were on the roads of the country, including 600,000 in decisions about development, even though such issues have a pro-
Baku. Moreover, around 50,000 more entered Baku from other found effect on their life. The process is now even less participatory
provinces. Therefore, 65% of all cars nationally commute to Baku than in the pre-Soviet period when urban projects had to be at
every day (Jafarli, 2011) Second, the road system of Baku remained least approved by the City Council and thus the Soviet legacy of
unchanged during the years 2000–2006 leading to substantial traf- centralization and inaccessibility is being continued (Valiyev,
fic jams and accidents. Only in 2005 did the city administration be- 2010).
gin to construct bridges and express lanes to mitigate the situation. Having explored some of major issues relating to the urban
Third, due to the high prices of property in downtown Baku and development of Baku, it is still very difficult to define a future pos-
high opportunity cost, it has become very expensive and not prof- sible model for the city. Indeed, it appears that none of the current
itable to build parking lots. Thus, drivers usually park on sidewalks, global models is a particular fit for the city. In fact, Baku already
or on the side of the roads, limiting the driving space. Last, but not displays some of the features characteristic of all models in that
least, the low quality of public transportation adds another prob- it has the vitality of the Western European inner city neighbor-
lem. Here the absence of express lanes for buses increases com- hoods; the suburbanization of the North American style with erod-
muter time, thus discouraging people from using public ing downtowns and the creation of edge cities; eroded levels of
transport. Ordinary people prefer to commute either by taxi or in public services, as well as a rapid growth of informal houses in
their own cars. Investing more in a metro system that is quite poverty-ridden areas; and finally the booming economy and huge
developed in Baku could solve the problem. In fact, the government investments, as in Dubai, Abu Dhabi or Singapore. Nevertheless,
has built two new stations over the past 2 years and plans to con- after examining the construction and infrastructure projects, the
struct several more over next 5 years. The smart Transport System gentrification of the city center, as well as massive investments
launched in Baku in 2011 envisioned the installation of monitors into landmark buildings, it is becoming clear that the Baku admin-
on all bus stations of Baku showing the timing of bus arrival and istration and government is trying to increase the competitiveness
640 A. Valiyev / Cities 31 (2013) 625–640

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