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AZERBAIJAN


  
   

 
Key Economic Data 
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 6,090 5,600 5,300 102
         
GNI per capita
 US $ 710 650 600 145
Ranking is given out of 208 nations - (data from the World Bank)

REPUBLICAN REFERENCE

Area (sq.km)
86,600

Population
7,771,092

Principal ethnic
groups
Azeri 90%
Russian 2.5%
Armenian 2%
Dagestani 3.2%
other 2.3

Capital
Baku

Currency
Azeri Manat

President
Heidar Aliyev
 

  

Background:
Azerbaijan - a nation of Turkic Muslims - has been an independent republic since the collapse of the Soviet Union in 1991. Despite a cease-fire, in place since 1994, 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 (IDPs) as a result of the conflict. Corruption is ubiquitous and the promise of widespread wealth from Azerbaijan's undeveloped petroleum resources remains largely unfulfilled.  

Update No: 275 - (01/12/03)

The new Azeri president, Ilham Aliyev, made an early appearance on the world stage, just before he was elected, when he was still acting premier. Not that anybody doubted for a moment that he would be. He went to the US in early October to the UN general assembly session.
There he met Bush and also Stipe Mesic, the president of Croatia. Another meeting was held with Iranian Foreign Minister Kamal Kharazi, who agreed to expand energy cooperation in the Caspian.
Few of his interlocutors can have expected him to be very different from his predecessor, his own father, Haidar Aliyev. Ilham is not exactly a chip of the old bloc. He is notorious for having been a playboy and former manager of casinos, which all went bust.
His father was for decades a loyal Soviet apparatchik, president in communist times and a member of the Brezhnev politburo no less. He was always the reverse of frivolous. But then his son is giving up his frolicsome ways by now and assuming the full dignity of his high office.
The Azeri regime is obviously disconcerted at the downfall of President Eduard Shevardnadze in neighbouring Georgia. But it has never made the mistake of allowing a free press and giving opposition forces rights of free speech and assembly, as Shevardnadze did. Hence the possibility to demonstrate for his removal.
No such luck for the Azeris, whose opposition is tightly repressed.

The inaugural address
On October 31st Ilham made his inaugural speech to the people, before any embarrassing need to mention or ignore the events in Tbilisi. He said that he would build on his father's achievements; "we shall build on your monument. I believe in Azerbaijan's lucky future" he said.
The government has been reporting GDP growth rates of 10% annually. The president promised that 60% of the budget would be spent on social services and the like. The eradication of poverty is a prime goal, he said. 
Aliyev fils indicated that he was prepared for a dialogue with the opposition. Those who allege massive electoral fraud find that it becomes a monologue, often in prison from the secret police. Even for those who are more circumspect the dialogue has a strange character: "The establishment of solidarity between political parties is necessary, " 
said the new president. There is a word for this in the lexicon of politics - totalitarianism.

The nature of the 'dialogue'
The definition of the democratic game as played out in Azerbaijan are pretty clear. They approximate to those described by Churchill for his war cabinet: "after I have exhausted the topics of debate, a ready and reasoned assent to my points of view." He was only being half humorous here. But then a war was on.
There is a war of sorts in Azerbaijan also, one conducted by the regime against the people. It is clear that the terms of any dialogue are set by the government. Officials have blamed opposition activists for creating unrest in the aftermath of the election on October 15th, a failing which has led to hundreds of arrests of loyalists to Musavat, the main opposition grouping.
Nevertheless the US and the EU have expressed no undue concern. Important oil deals are at stake. On October 30th the EU representative for the Caucusus, Heikki Talvitie, announced that "the EU will be working with Ilham Aliyev."

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ENERGY

Azeri consortium head says major oil export project on schedule

New gas reserves have been discovered at the Azerbaijani offshore Sah Daniz field. The president of BP Azerbaijan, David Woodward, has declined to disclose the volume. He only said that the construction of the Baku-Tbilisi-Ceyhan oil export pipeline is going according to schedule, Lider TV has reported.
The construction of the Central Azari field has been completed by 76 per cent. The platform will be launched by the end of November. Early oil will be extracted from the field by the end of next year. The work on the Western and Eastern Azari fields is also on schedule. An appraisal well will be drilled in Eastern Azari in December and another one in Western Azari later. A master plan will be drafted based on the results of drilling.
We are still looking into the problems which appeared at the Western Azari field back in September. It will be clear at the beginning of 2004 whether the work on the area should go according to schedule. But David Woodward is confident that the project will not be affected.
The situation around the Alov field is not clear either. The company, which is awaiting the results of talks between Iran and Azerbaijan, has suspended the drilling temporarily.
Although there were some delays, particularly in Turkey, in the construction of the Baku-Tbilisi-Ceyhan pipeline due to bad weather at the beginning of the year, the schedule has not been altered. The laying of the foundation of the main pump station in Sanqacal [south of Baku] has been completed, the first pipes have been laid at a sub-station and the construction of facilities has started.
Work is under way at 17 construction sites between Baku and Ceyhan. Around US$1.5bn have been spent on the project so far. Approximately 500km of the Azerbaijani-Georgian-Turkish route have been prepared for construction by the end of October. Over 100 km of pipes have already been laid. In all, 80 km of trenches have been filled in the three countries. All the pipes are expected to be delivered to Baku from Malaysia by the end of the year.
Woodward said that in three quarters of this year the company paid to the Azerbaijani government up to US$170m in revenue and US$36m in taxes and invested US$2.4m in the country's social sphere within the framework of various projects.

Azeri oil boss hails World Bank's decision on oil loans

The Washington office of the International Finance Corporation, which is part of the World Bank, has said that its board approved the investment decision on Phase 1 of the Azari - Ciraq - Deepwater Gunasli project and the Baku-Tbilisi-Ceyhan pipeline, ANS TV has reported.
The acting president of the Azerbaijani State Oil Company, Natiq Aliyev, said that a contract on the loans will be signed on 15th December. He added that the loans will be allocated in January-February next year.
Natiq Aliyev said: "We expected the decision to be taken in May-June. There were those who opposed Baku-Tbilisi-Ceyhan, those who attempted to hinder it. In general, there were others who wanted to either hamper the project, to completely halt it or to create a negative image. But they have failed." 
A total of 24 directors attended the discussions, 21 of whom expressed their official position both orally and in writing. Their assessment was very positive.

EBRD approves loan to build Baku-Ceyhan oil pipeline 

The Board of Directors of the European Bank for Reconstruction and Development (EBRD) has approved financing the Baku-Tbilisi-Ceyhan oil pipeline construction project, Trend News Agency has reported.
Trend reports that the EBRD will allocate US$125m for 12 years. The bank has also approved another US$125m for 10 years to be raised through commercial banks.

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PRIVATISATION

Azeri capital's gas and water supply systems to be privatised

The American companies Deloitte Touche [Tohmatsu] and PA Consulting Group are performing the functions of financial consultants to prepare the gas and water supply and sewage systems of Baku for privatisation, MPA News Agency has reported.
Having analysed proposals linked with the privatisation, financial reports and possibilities of attracting investments, the companies will submit the results to the Economic Development Ministry, the ministry told MPA. Relevant proposals by a working group have been sent to the Azariqaz [Azerbaijani gas] and the Abseron regional joint-stock water company. The first part of the project includes privatisation of the gas distribution network and costs US$1m. The second part of the project envisages privatisation of the water supply and sewage systems and costs US$800,000.

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