By Margarita Antidze
BAKU (Reuters) - Millions of television viewers tuned into Europe's annual pop contest in Azerbaijan on Saturday, but a row over human rights in the former Soviet republic has overshadowed the government's planned showcase for its rapid progress fuelled by oil riches.
The Eurovision Song Contest draws more than 100 million viewers almost every year and Azerbaijan spent $60 million on a facelift for its capital Baku and an undisclosed amount on the glitzy 23,000-seat Crystal Hall on the shores of the Caspian Sea to host the event.
But human rights groups say some buildings in the centre of Baku were torn down to make way for the arena and residents forcibly evicted without proper compensation.
Opposition groups have also used the Eurovision spotlight on Azerbaijan to demand democracy and the resignation of the government. Dozens of peaceful protesters have been arrested this month in Baku.
Critics accuse President Ilham Aliyev, who succeeded his father as head of state in 2003, of clamping down on dissent, but the Baku government says Azerbaijan enjoys full freedom of speech and a vibrant free press.
While there is still real poverty in Azerbaijan, oil and gas wealth has poured into the country of nine million people since independence in 1991 and five-star hotels and shiny shopping malls have sprung up near dowdy Soviet-era apartment blocks.
Of the 26 contestants to qualify for the final, only one strayed into the field of politics. Loreen, an artist from Sweden, caused a storm when she met rights activists this week.
But she and Russian rural folk group "Buranovskiye Babushki" (Grannies from Buranovo) are favorites to win.
Buranovskiye Babushki, dressed in the traditional red headscarfs and long dresses of their Russian northern region of Udmurtia, stomping feet shod in tree bark shoes and urging the audience to dance, were a hit at this week's semi-finals.
But also featuring prominently are septuagenarian British crooner Engelbert Humperdinck and eccentric pop duo Jedward - twins from Ireland, much beloved by teenagers in Europe.
Azerbaijan won the right to host the annual contest last year in Germany with the victory of its entry, the love song "Running Scared", from Eldar Gasimov and Nigar Jamal, better known as Ell/Nikki.
(Editing by Jon Hemming)