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AZERBAIJAN


  
  

 

 

In-depth Business Intelligence

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)

Books on Azerbaijan

REPUBLICAN REFERENCE

Area (sq.km)
86,600

Population
7,830,764

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

Capital
Baku

Currency
Azeri Manat

President
Ilham 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: 283- (26/07/04)

The Azeri regime is in trouble. It has no real credibility and so legitimacy, which the proceeding one did by reason of the stature of its boss, Haidar Aliyev, who died in September last year, necessitating an election in October, won - but very dubiously so - by his son, Ilham Aliyev. 

Aliyev; the father of the country; but which country? 
The career of Haidar Aliyev is worth reflecting upon, if one wants to understand Azerbaijan and the prospects for his son.
He became First Secretary of the Communist Party of Azerbaijan, and thus leader of the republic, in 1969. He was a Brezhnevite to beat all Brezhnevites. When the great man came to Baku on a visit the streets were festooned with laudatory placards penned by Aliyev himself. He was duly confirmed as viceroy.
Gorbachev took against him, the epitome of everything he disliked about the aficionados of the old regime, corrupt, cringingly obsequious and counterfeit. He dismissed him from the Politburo in 1987.
This was to be the making of a late flowering of Aliyev's career. He had the greatest quality a politician can have - luck.
He decided to leave the Communist Party in July 1991! Did he know something; or was he just fortunate?
At all events a comeback became possible, with the ubiquitous and iniquitous Gorbachev soon to be out of the way. In September 1991 Aliyev was elected Chairman of the Supreme Majlis (parliament) of Nakhichevan, the Azeri enclave between Iran and Armenia. This was his home base and the launch-pad of many a career in Azeri politics. The Nakhichevani clan have long called the shots in Baku, just as the zealots from Nagorno-Kharabak, the Armenian enclave in Azerbaijan, do in Yerevan, notably the former president of the enclave, now president of Armenia, Robert Kocharian.
Being an embattled enclave- champion lends one endurance for the fight, maybe? For whatever reason Aliyev made a great comeback. 
Luck seems to have come to his rescue when he was debarred from entering presidential lists in 1992; he never had to account for the appalling war that ensued between Azerbaijan and Armenia. When various Islamicist presidents bit the dust, he was there to pick up the pieces.
He had been debarred from the presidential elections of 1992, on the grounds that he was above the age-limit, 65. This would have debarred Winston Churchill from assuming the premiership of Great Britain in 1940, then 66, probably the most momentous turning-point in European history. 
Aliyev had his own, if not quite so sublime, a triumph. In June 1993 at the age of 70, the former President Elchibey amid a domestic crisis called him back to be prime minister:
Within two days he was president. For ten years he never looked back - until taken over by ill-health. 

The US backs the son and heir 
President Ilham Aliyev launched a particularly brutal attack on the opposition from the moment of his accession in October. Many were arrested and many tortured, according to human rights activists. The principal opposition party leaders are still in jail.
The US administration does not seem in any way phased by this, at least in public. The Pentagon has forged ahead with plans to increase its presence in Azerbaijan. The strategic importance of the country, next to Iran and dominating the Southern approaches to the Caspian Sea and the Caucasus, is undeniable, both in the fight against terrorism and for more mundane reasons.
By late next year, 2005, the Baku-to-Ceyhan pipeline should be bringing one million barrels of oil per day westwards to Turkey and the European and US markets. The $3bn pipeline project is facing problems, financial, organisational, environmental and other, to which we will return in due course. It will certainly go ahead, however, given recent events in the Middle East. It is the guarantee that the Caspian Sea will be an alternative to the Persian Gulf, even if it is never likely to supplant its premier position.
Washington is increasing to 50 the number of military advisers to train Azeri troops, while doubling its annual military aid package to nearly $20m. One European diplomat puts it that the US is developing a "permanent military presence by stealth." An exchange programme for Azeri troops with the Oklahoma national guard is scheduled for 2005; and the US has built a radar station on the Caspian coast to aid border control.
American planes are given access to refuelling facilities at Azeri airfields. There are persistent reports in the local media that the US is helping to fund improvements to Azeri airfields, which the embassy denies. The co-operation took on a new candour, however, on June 10th, when a squad of elite US navy Seals publicly trained with Azeri special forces, racing powerful speed boats in the Caspian.
On the same day, the second most important US general in Europe, Charles Wald, held his second meeting in three months with top Azeri officials. The Pentagon is emphatic that this presence is not 'permanent.' It will not amount to a US base on Azeri soil. Yet General Ward himself said in March that he hoped Azerbaijan could improve some air bases so US craft could 'temporarily' use them. President Aliyev was at the latest NATO summit in Istanbul. Azerbaijan is clearly a NATO associate now. 

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AVIATION

Azerbaijan to buy 4 An-140-100s


Azerbaijan is to buy from Ukraine four An-140-100 planes shortly. Interfax News Agencyquoted the liaison department of Kharkiv's state aviation production enterprise as saying that a memorandum was signed in Baku on mutual understanding between the Kharkiv enterprise and state air concern Azerbaijan Hava Yollari, in keeping with which the Azeri side is planning to purchase four An-140-100 planes. The memorandum was signed in the course of the business tour of Ukraine's delegation led by Industrial Policy Minister Alexander Neustroev to Azerbaijan and Syria. 
Under the document, one plane will be supplied this year, and three more next year. Aviation administrations of Azerbaijan and Ukraine signed normative documents lifting all restrictions on the supply of Ukrainian aviation equipment to that republic. 

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ENERGY

SOCAR to boost Baku-Novorossiisk H2 exports 28%

Azeri state oil company SOCAR plans to export 1.28m tonnes of oil through the Baku-Novorossiisk pipeline in the second half of 2004, which is 28% more than in the same period in 2003, Interfax News Agency quoted a source in the company as saying on July 6th. In the third quarter the company plans to export 730,000 tonnes of oil along this route, including 210,000 tonnes in July, and 260,000 tonnes each in August and September. The company will export 550,000 tonnes of oil through the pipeline in the fourth quarter, including 210,000 each in October and November and 130,000 tonnes in December.
"In December we constantly forecast small transport and shipping volumes, as in winter the port of Novorossiisk is frequently closed due to poor weather conditions," the source said.
In total, the company plans to export 2.5m tonnes of oil to Novorossiisk in 2004, the same as in 2003. SOCAR transported 1.281m tonnes of oil via the Baku-Novorossiisk pipeline in the first half of 2004.

AO Azerenergy plant upgrading

AO Azerenergy, a state-owned monopoly energy producer in Azerbaijan, estimates the cost of modernising Azerbaijan State Regional Power Plant (GRES) at US$150m, New Europe reported recently. 
The company's press service quoted company President Etibar Pirvediev as saying that as part of the modernisation it is planned to reconstruct all eight power-producing units at the plant, to restore the smokestack and to install a deep water-intake unit. The reconstruction of power-producing units will make it possible to increase the capacity of each of the blocks to 330 megawatts, as a result of which electricity production will increase from 10.5bn cubic metres at present to 12.5bn cubic metres per year. In addition, the reconstruction will also cut fuel consumption, from 388 grams of fuel per kilowatt-hour of electricity to 320 grams, which will save 430,000 tonnes of fuel oil per year. 
According to preliminary estimates, the restoration of the smokestack will cost US$12m, the completion of the water-intake unit - US$17m and the reconstruction of each of the power-producing units - US$15m. "In total, all the reconstruction work will cost US$150m. More exact figures will be established after the preparation of a feasibility study," Pirvediev said. The European Bank for Reconstruction and Development has already expressed interest in the project and plans to pay out a credit to US$70m to finance the modernisation of the plant.

DEPA to buy Azeri gas

Greek company DEPA has reached agreement with Turkey's Botas to start buying gas produced at Shah Deniz field in Azerbaijan in 2006, DEPA Chairman of the Board, Raphael Moissis, said in Baku recently, Interfax News Agency reported.
"We have reached an agreement with Turkish company Botas to start buying 750m cubic metres of Azerbaijani gas a year in the third quarter of 2006 and increase that to three billion cubic metres by 2010. Under Stage-2 development of Shah Deniz field we will buy directly from Azerbaijan. In that case the gas will be exported to Italy, France, Macedonia, Albania, Serbia and Slovenia. But the price should not exceed the cost of Russian gas in Europe," he said. 
Moissis said of the construction of a gas pipeline between Turkey and Greece that a feasibility study would be ready by the end of August and work will begin in December. Botas buys gas from Azerbaijan Gas Supply Company.

Pirsagat investment at 300m Euro

Investment in the development of Pirsagat inland oil field in Azerbaijan will amount to 300m Euro, double the amount initially planned, Azeri state oil company SOCAR President, Natik Aliyev, said at the signing of the agreement to rehabilitate Garachukhur field, Interfax News Agency reported.
"The Chinese company, Shengli, (the operator for Pirsagat field) had submitted to SOCAR a working programme and project budget. Investment over the contract period is planned at 300m Euro, including 147m Euro to drill new wells, 18m Euro for exploration and infrastructure repair, and 127m Euro in operating costs," Aliyev said. He said 8m Euro will be invested by year's end. Aliyev said oil production resumed at the field in April and daily flows total 13 tonnes. "The Chinese company has promised to increase annual production at Pirsagat to 160,000 tonnes. During the 25-year contract production will total 2.8m tonnes of oil," he said. The contract to rehabilitate, explore and develop Pirsagat field was signed on July 4th, 2003 for 25 years with the option to extend for another five years. 

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ENVIRONMENT

Azeri, Turkish ministers sign environmental protection accord

Azerbaijan and Turkey signed an intergovernmental agreement on cooperation in environmental protection on July 9th. The agreement was signed by Azerbaijani Minister of Ecology and Natural Resources, Huseyn Bagirov, and Turkish Minister of Environment and Forestry, Osman Pepe, Turan News Agency reported.
The cooperation envisages management of forests, forestry and protected territories, the preservation of biodiversity, the implementation of the convention on the environment, to which Azerbaijan and Turkey are signatories, the protection of the environment of the Caspian and Black Seas, environmental impact assessments, waste management and so on. 

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