This information comes from the assessment conducted in country for the Azerbaijan report, which was published in August 2002.
Even making allowance for the difficulties produced by war with Armenia, Azerbaijan has not moved as far beyond its Soviet legacy of command-and-control systems as other transition countries reviewed over the past few years. Much of the economic capacity of the country has been maintained under the control of the government or well-connected private sector interests, leaving the average investor (domestic or foreign) in precarious circumstances.
The framework laws, while generally oriented toward the market, are incomplete (lacking detailed regulations) and often confusing due to overlapping legislation that has not been harmonized. On the positive side, many of the laws permit private interests to sue the government agencies responsible for implementation, and an increasing number of lawyers are beginning to take cases against these agencies.
Implementing institutions were weak. Courts are held in very low esteem by the public and the legal community. Interviewees raised questions of competency and integrity on a regular basis. In terms of competency, however, the commercial law regime has been almost completely rewritten in the past 10 years, with major changes (a new Civil Code) only two years old. Consequently, virtually no one in the legal community is up-to-date on the law or its application.
One of the most consistent themes arising in connection with government institutions was corruption. Private citizens almost unanimously complained of unofficial payments, inappropriate audits and assessments, and other rent-seeking behavior. This was compounded by a fear of complaining publicly and openly, so there is little formal protest or lobbying for change.
The lack of supporting institutions was surprising. Most transition and developing countries have a much deeper layer of NGOs, professional associations, business associations, and other interest groups developing and finding their way in civil society. These groups are generally either weak or nonexistent in Azerbaijan.
