General background: Azerbaijan - a nation of
Turkic Muslims - has been an independent republic since
the collapse of the Soviet Union in 1991. Despite a
1`994 cease-fire, Azerbaijan has yet to resolve its
conflict with Armenia over the Azerbaijani Nagorno-Karabakh
enclave (largely Armenian populated). Azerbaijan has
lost almost 20% of its territory and must support some
750,000 refugees and internally displaced persons as
a result of the conflict. Corruption is ubiquitous and
the promise of widespread wealth from Azerbaijan's undeveloped
petroleum resources remains largely unfulfilled.
Area comparative: Slightly smaller than
Maine
Climate: Dry, semiarid steppe
Terrain: Large, flat Kur-Araz Ovaligi (Kura-Araks
Lowland) (much of it below sea level) with Great Caucasus
Mountains to the north, Qarabag Yaylasi (Karabakh Upland)
in west; Baku lies on Abseron Yasaqligi (Apsheron Peninsula)
that juts into Caspian Sea
Population: 7,798,497 (July 2002 est.)
Ethnic groups: Azeri 90%, Dagestani 3.2%,
Russian 2.5%, Armenian 2%, other 2.3% (1998 est.)
note: almost all Armenians live in the separatist
Nagorno-Karabakh region
Religions: Muslim 93.4%, Russian Orthodox
2.5%, Armenian Orthodox 2.3%, other 1.8% (1995 est.)
note: religious affiliation is still nominal
in Azerbaijan; percentages for actual practicing adherents
are much lower
Language: Azerbaijani (Azeri) 89%, Russian
3%, Armenian 2%, other 6% (1995 est.)
Government type: Republic
Capital: Baku (Baki)
Legal system: Based on civil law system
Economic overview: Azerbaijan's number one
export is oil. Azerbaijan's oil production declined
through 1997 but has registered an increase every
year since. Negotiation of production-sharing arrangements
(PSAs) with foreign firms, which have thus far committed
$60 billion to oilfield development, should generate
the funds needed to spur future industrial development.
Oil production under the first of these PSAs, with
the Azerbaijan International Operating Company, began
in November 1997. Azerbaijan shares all the formidable
problems of the former Soviet republics in making
the transition from a command to a market economy,
but its considerable energy resources brighten its
long-term prospects. Baku has only recently begun
making progress on economic reform, and old economic
ties and structures are slowly being replaced. An
obstacle to economic progress, including stepped up
foreign investment in the non-energy sector, is the
continuing conflict with Armenia over the Nagorno-Karabakh
region. Trade with Russia and the other former Soviet
republics is declining in importance while trade is
building with Turkey and the nations of Europe. Long-term
prospects will depend on world oil prices, the location
of new pipelines in the region, and Azerbaijan's ability
to manage its oil wealth.
Communication/Telephone system: Inadequate;
requires considerable expansion and modernization;
teledensity of 8.6 main lines per 100 persons is very
low, the majority of telephones are in Baku and other
industrial centres - about 700 villages still without
public telephone service; satellite service connects
Baku to a modern switch in its exclave of Naxcivan.
The old Soviet system of cable and microwave is still
serviceable; a satellite connection to Turkey enables
Baku to reach about 200 additional countries, some
of which are directly connected to Baku by satellite
providers other than Turkey (1997).
Places of interest:
Travel Tips: Travel to the western region of
Nagorno Karabakh, and the Azerbaijan-Armenia border
region in general, should be avoided.
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