Authorities in Azerbaijan have arrested an army lieutenant wanted in connection with an alleged terrorist plot targeting the US and British embassies and other facilities in Baku, according to local news reports. Lieutenant Kamran Asadov and another man were arrested on 9 November in a forest near Baku. Ten days prior to their arrest, the pair had reportedly stolen several thousand dollars worth of cash in a gas-station robbery. The authorities said the two had confessed to the terror plot.

Earlier, on 2-3 November, the authorities arrested eight people, including purported al-Qaida emissary Abu Jafar and confiscated four crates of submachine guns. It was unclear if the two incidents were connected.

According to local media reports citing official statements, Lieutenant Asadov had deserted his military unit, taking with him grenades, assault rifles and ammunition. The country's security ministry described him as a follower of Wahhabi Sunni Islam, which holds to strict literal interpretations of the Qur'an and Hadith.

When the authorities initially announced they had thwarted a terrorist attack, the US and British embassies responded to the potential threat by temporarily closing down, while the offices of several major international oil companies followed suit.

Azerbaijan exports around 700,000 barrels per day (bpd) of crude via the Baku-Tbilisi-Ceyhan pipeline operated by an international consortium led by BP.

It was the first such plot uncovered in Azerbaijan, and the arrests raise questions as to how organized the oil-rich country's radical Islamic forces have become, and regarding the threat they pose.

While the government is strictly secular and has close ties to Washington, the public's relationship with Islam, especially outside the capital Baku, is a complicated one, as is the ethnic patchwork in many regions.

For now it remains uncertain to what extent these radical groups pose a threat to the country's secular government, but what is clear is that the country's disenfranchised minorities who benefit little if at all from the oil-rich nations resource revenues are increasingly disillusioned.

Radical Islam is quickly stepping in to fill in the gap, and while these groups appear to lack any concrete organization, the government's failure to address minority needs and to strengthen its democratic institutions could buy them enough time to become a much more serious threat.
Trouble in the north

The varied ethnic minorities that inhabit the north are increasingly expressing their dissatisfaction with Baku. The northern province retains the characteristics of a nearly separate country, inhabited by Legzins, Nakhchivanis, "Armenian Azeris" (sometimes called "Yeraz"), Georgians and Kurds. The Lezgins, who hail largely from Dagestan and Azerbaijan, are, with several other minorities, particularly distant from the centers of power.

According to ISA source Karl Rahder, who spends much of his time in the region, the Lezgin's Sunni identity and the fact that they are not Turkic Azeris widens this gulf. "The mix of foreigners (e.g. Chechens) in the north as well as Azerbaijani ethnic and religious minorities is something that Sunni radicals exploit cleverly, using the resentment as a component of their power base. And in its extreme form, you find certain Salafi (Sunni fundamentalist) groups spreading hatred against Shia, claiming that it is an impure form of Islam," Rahder told ISA.

"What I'm suggesting," Rahder said, is that when Chechens and Dagestanis filter into Azerbaijan to avoid pursuit by the Russian army, they feel quite at home. And occasionally, they find a receptive audience at Sunni mosques in northern regions such as Quba and Zaqatala. And it is in the north where the occasional weapons cache is (allegedly) found or where a shootout with police takes place from time to time."

Rahder believes, however reluctantly, that radicalism in Azerbaijan could spread because the people do not feel that they "own" their own country. "They feel economically squeezed and totally disenfranchised by rigged elections and systemic corruption. The perceived tribalism of the elite families is fuel on the fire."

As such, he says, radical Islam is a "seductive and powerful alternative to participation in a political system that marginalizes these groups." Further to this he points to a small group of Sunni separatists recently proclaiming an "autonomous republic" in the northern regions of Zaqatala and Balekan, complete with its own flag.

Still, it is far from clear whether these groups are organized and to what extent they pose a serious threat.

In Rahder's opinion, "there is no network that is being activated or even can be. The growing disaffection and resultant Salafi activity are spontaneous and remain uncoordinated, in my view. If and when things blow up (figuratively or literally), at least for now, it's going to be in fits and starts."
Iranian influence in the south

In the south, there is also evidence of ethnic alienation and rumblings of discontent. While there is a close cultural and confessional bond between Azerbaijan and Iran, Iranian influence in the country is characterized by a complicated set of historical factors.

The Talysh minority, which lives mostly in the southern Astara and Lankaran regions, are particularly sensitive to ethnic alienation. And it is here, according to Rahder, and in other districts abutting the Araz River, that Iran has established a sphere of influence. Furthermore, he said, the village of Nadaran has a history or clashes with government forces and is a stronghold of Iranian influence."

And Rahder surmises that Iran has things relatively under control "in the south." He says that some of his sources in the region attest to the presence of Iranian-controlled sleeper cells in the country - some of them linked to Hizbollah. "These cells may be activated when the time is ripe."

"Certainly, if an American attack on Iran even appears to be aided by Azerbaijan, these groups will go into action, moving against western economic targets, embassies and Azerbaijani government facilities," Rahder said.

But for now, they are waiting patiently.
The government's response

In the meantime, the administration of President Ilham Aliyev will find heading off any jihadist trouble a serious challenge, despite the fact that security forces are quick to crack down on any movements or even potential movements that could threaten the secular government.

While police frequently break up alleged cells of jihadist activity, a report earlier this month from Zaqatala that the dean of the Art Department of the Azerbaijan Institute of Teachers suspended eight female students for wearing hijabs was particularly telling and indicative of the government's growing anxiety.

"So they are nervous," says Rahder. "And they've got a right to be, after all. Jihadists do use Azerbaijan as a sanctuary, and the Salafis do hate the Shia, and Iran does have an interest in encouraging ethnic and religious unrest in the south."

However, this decisive security action begs another question: Why don't they break up the Abu Bakr mosque - the largest mosque in the country and a nexus of Salafi activity? Rahder points out that security forces raided the much smaller Juma mosque in 2004, even though its leader was a liberal Muslim with a human rights rather than a jihadist agenda, though there were suspicions that the mosque's imam, Ilgar Ibrahmoglu, was taking orders from Tehran.

Rahder says the government has likely decided that it is in its best interest to keep the Abu Bakr mosque and its congregation in plain view, and that closing down the mosque would result in the creation of private or "underground" facilities that would be much more difficult to monitor.

In the meantime, while the government has embarked on some solid projects aimed at improving life in discontented regions, not nearly enough is being done. Rahder suggests a number of measures to quell tensions in the long term, including: a new distribution of oil wealth that would resemble the "Alaskan model" - i.e. give everyone a share of the revenues and make the revenue stream completely transparent. Alternatively, investment in infrastructure, job training, education, etc. to attract further investment and provide a pool of talented Azeris for new jobs would be beneficial, as would fostering a genuine participatory democracy that embraces (instead of undermining) the opposition.

Rahder refers to oil as a "resource curse" and key concern, arguing that the State Oil Fund is anything but transparent.

As for democratic values: "Azerbaijan has been on the cutting edge of democratic, Muslim secularism since the post-WWI period - or it was prior to being absorbed by the USSR. This brief period shows that Azerbaijan has a lot to teach the Muslim world, including Iran," says Rahder.

"And if Aliyev is smart, he will use this historical legacy to unify the country and deprive the radical Islamists of their central premise: that democracy is a sham in Azerbaijan and corruption is a permanent fact of life."
ISA is a nonprofit, independent consultancy that specializes in providing analysis of developing issues in international relations to NGOs

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