NEXT month around two dozen Formula One racecars will speed through the gleaming center of Baku, the capital of Azerbaijan. They will zoom along the shore of the oil-rich Caspian Sea, past five-star hotels and shops displaying Brioni suits and Chopard watches. They will also race past the less attractive side of Azerbaijan: its sputtering economy, oppressive political system and simmering conflict with Armenia. At such speed, it will be hard to spot the signs of insecurity in this former Soviet republic of 10m people squeezed between Iran, Turkey and Russia.
Formula One’s European Grand Prix is a fitting vanity project for Azerbaijan. The country has transformed itself from a failing state in the early 1990s to a rich and corrupt oil economy. Between 2003 and 2015 oil and gas revenues were $ 119 billion; the cash was spent on infrastructure, weapons and ostentatious follies. Some of the money the country earned from oil and gold mines has been funnelled into powerful people’s offshore accounts. But enough of it trickled down to fuel strong domestic demand, largely satisfied by imports.
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