Hit hard by falling oil prices, ex-Soviet Azerbaijan has plunged into an economic crisis that has seen rare protests shake the authorities in the tightly-controlled nation. Over the last week, violent clashes broke out between riot police and thousands of demonstrators who took to the streets in cities across the energy-rich Caspian nation to express their discontent against price hikes and unemployment.
The government - which under strongman Ilham Aliyev allows few signs of dissent - sent in troops to quell the unrest in the city of Siazan and several other provincial towns where tear gas, water cannon, and rubber bullets were reportedly used against stone-throwing protesters.
Some 100 people were arrested in the aftermath, Sadiar Osmanov, head of the opposition Musavat party's local branch, told AFP. The government blamed opposition activists for staging riots, an accusation they rejected as groundless.
"People speak out about their woes and the government responds with violence," Musavat's leader Isa Gambar said. "As a result, the protest movement will gain momentum, economic turmoil will spiral into a political unrest," he told AFP.
Exports of hydrocarbons constitute up to three quarters of Azerbaijan's state revenues, making the Caucasus country's economy highly dependent on global energy prices.
As oil prices fall to 12-year lows and the manna of petrodollars diminished, Azerbaijan's once-booming economy quickly hit the skids, the national currency plummeted and inflation soared.
After having depleted over half of its foreign currency reserves, Azerbaijan's central bank admitted in December that the economy was being hurt by falling oil prices and moved to stop propping up the national currency.
The manat plunged immediately by over a third against the dollar, with major retailers halting business and anxious consumers fearing for their future.
Many Azerbaijanis rushed to the banks to withdraw savings.
Others expressed fears that the weak value of the manat would threaten the banking sector's stability and lead to loan defaults as a majority of mortgages and loans in the nation of 9.5 million people are dollar-denominated.
"I don't know if I will be able to repay my mortgage," said 40-year-old Baku resident Arif Gasanov, one of some 2.5 million Azerbaijanis who have taken a mortgage in dollars.
"After the manat collapsed I'll have to pay to my bank much more than expected, much more than I can afford," he told AFP.
Highlighting the seriousness of the situation, a spate of suicides were reported by local media, with several people who were unable to make payments on their bank loans setting themselves on fire. The currency turmoil was followed by an 11-fold acceleration of inflation, with consumer prices rising in December by 4.4 percent after a 0.4 percent increase in November.
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