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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
 

 

Update No: 288- (01/01/05)


Aliyev visits London; Britain May Provide Military Aid 
The UK is an important partner for Azerbaijan these days, second only to the US and Russia. BP after heads the huge AOIC consortium with AMOCO and there is considerable other British investment.
On December 14th, President Aliyev met with British Prime Minister Tony Blair, Foreign Minister Jack Straw and other officials to discuss the Nagorno-Karabakh conflict and economic relations between the two countries.
It is logical for Azerbaijan to court the City of London and big British business. A visit by the country's president, Ilham Aliyev, makes perfect sense. It greatly helps that he is fluent in English.While in London, President Aliyev also spoke at a conference entitled "The development of the non-oil sector of Azerbaijan". 
During the visit, Aliyev held meetings at various commissions of the British parliament. He also met BP President George Brown and heads of several other companies. 
Great Britain may provide military and technical assistance to upgrade the Azerbaijani Army and establishment of various entities. This was discussed at a meeting of President Aliyev with British Minister of Defence Geoffrey Hoon. Also considered were issues related to Azerbaijan's integration with European entities and a plan of action on the NATO-Azerbaijan Individual Partnership Plan. 

Azerbaijan's president about to be tested by challenges he inherited
His real job of course is back home, although it helps him build up stature domestically to bestride the world stage. His main problem is that he is still very much in the shadow of his father. In his office a portrait of his father, the patriarch Heydar who ruled over the country in the South Caucasus for a decade until his death 2003, looks out sternly, as it does in strategic points across the capital Baku and the rest of the country.
The principal question is how far Aliyev junior is able to assume and modify the legacy of his father, and how far he remains a captive to the previous powerful establishment, which remains largely in place. Like his counterparts in the region, he stresses the challenges he inherited. "From the time of independence, we had one of the most difficult situations among the states of the former Soviet Union," he said. "The country was completely disintegrating. There was civil war, domestic problems, elements of chaos and crisis."
Despite the challenges, geography has also handed Azerbaijan significant natural resources. With the strategic Baku-Ceyhan pipeline set to begin piping local oil for export next summer, and gas output soon to grow sharply, Mr Aliyev faces the prospects of a substantial boost in government revenues soon.
If he meets his pledge to use the money transparently and to help kick-start broader economic diversification and reform, none of which his Father did, as he discussed in London, he could yet live up to his father's legacy. If not, he risks being overshadowed by it, as a pale imitation.

Political problems abound
Mr Aliyev is operating against the backdrop of an enlarging European Union and NATO; and his self-professed foreign policy priority is to "integrate into European and euro-Atlantic structures." Hence the importance of the London visit. But breathtaking corruption, human rights abuses and democratic restrictions are all attracting increased international scrutiny as a result.
"Of course there is a lot to be improved," he said. "Azerbaijan is a country in transition. Our objective is creating a normal, pluralistic, democratic country. But it's very difficult to create civil society. We need economic growth and education. We must not expect a miracle, but we have made a lot of positive steps."
He brushes aside suggestions that the state is pressuring print media, while saying that his ministers and government officials are within their rights to pursue publications for libel, in cases that have proved a powerful blow to local journalists, (a technique developed by Singapore).
He also stresses that he has recently released a group of "so-called political prisoners," although recently seven other rival politicians were convicted. Mr Aliyev accuses his opponents of being involved in violence - and of being those who imposed censorship and tension when in power at the start of the 1990s. "We need a normal, civil relationship between different forces, but we will never tolerate violence," he said, adding that he easily won the election despite international criticism of voting, although international observers held this election to be farcical, given the repressive techniques, like locking up their political opponents.

Nagorno-Karabakh looms large
He has recently spent time with Russia's President Vladimir Putin, and the two men discussed the single most important issue confronting Mr Aliyev: the unresolved conflict in Nagorno-Karabakh, the mountainous western zone occupied by Armenia since a ceasefire in 1994.
"Azerbaijan will never compromise its territorial integrity," he said. "We are ready to talk about compromises, but outside this issue. We will not give independence to Nagorno-Karabakh or allow it to become part of Armenia.
At least in public, he shows little sign of fresh concessions on the subject, demanding Armenian military withdrawal from the region and seven surrounding districts that they have occupied, and the return of almost a million Azerbaijanis driven out by the conflict.
In exchange, he said he is willing to offer "security guarantees" for the Armenians left in Nargono-Karabakh and the "the highest possible autonomy."

Georgian-Azeri relations improve
Commenting on the current situation on another key regional issue, the Georgian-Azerbaijani border, across which there has been extensive smuggling, President Aliyev told journalists on December 17th that the issue has been clarified. "All problems on the border will be eliminated after we make sure that no cargo is passed to Armenia," underlined the President, saying that Azerbaijan and Georgia are committed to fighting contraband. 
Aliyev noted that consignments are smuggled to Armenia through Azerbaijan, President Aliyev said: "We will not have this happen again". He stressed that the border will remain closed until a normal work schedule in Georgia is provided. 
Expressing his stance on the recent incident involving Azerbaijanis living in Georgia, President Aliyev said that a peaceful life for Azerbaijanis abroad is a very important issue for the state. "There are forces trying to harm the friendly relations between the two countries. We know who they are. Unfortunately, there are such forces in Azerbaijan as well. However, the main forces are outside the country. We cannot allow hurting the strategic partnership between Georgia and Azerbaijan." 
President Aliyev called on the Azerbaijanis living in Georgia to respect the laws of the country and not to commit violations. He also voiced his confidence that all the outstanding discrepancies will be eliminated. 

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CONSTRUCTION

Iran, Azerbaijan agree on building two bridges to Naxcivan

The Iranian and Azerbaijani transport ministers have agreed on the construction of two bridges connecting Iran with the Naxcivan Autonomous Republic (NAR) [Azerbaijan's exclave]. Azerbaijan and Iran will jointly fund the construction of a bridge between Poldasht (Iran) and Saxtaxti (NAR), and a bridge between Jolfa (Iran) and Culfa (NAR). Three million dollars have been allocated for the construction of the first bridge and US$4m for the second one. Iran has begun to carry out the feasibility study of the project. The construction will be done by Iranian companies and will start in the first months of 2005, MPA News Agency reported.

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ENERGY

Azeri oil boss, Iranian envoy discuss energy cooperation

A meeting between SOCAR [State Oil Company of the Azerbaijani Republic] President, Natiq Aliyev and Iranian ambassador to Azerbaijan, Afshar Soleymani, in Baku has focused on the development of cooperation between Azerbaijan and Iran in the energy sector, Turan News Agency reported. 
The Iranian embassy's press service said that during the meeting, Soleymani had touched on the delivery of the Caspian oil through Iranian territory on the principle of swap (equal exchange). The envoy said that this could be regarded as a factor of the "development of regional cooperation."
Talking about bilateral relations, he described the future deliveries of the Iranian gas to Naxcivan [Azerbaijani exclave] as a "success" of the two sides.
In turn, Aliyev spoke highly about the expansion of bilateral cooperation in the energy sector and expressed his satisfaction with the implementation of the project to transport the Iranian gas to Naxcivan.

SOCAR, EBRD agree Shah Deniz credit terms

Azeri state oil company SOCAR and the European Bank for Reconstruction and Development initialled all documents for a credit of €170m to finance the SOCAR share in the Shah Deniz project, SOCAR President, Natik Aliyev, said, Interfax News Agency reported.
"We agreed all the documents for the credit," Aliyev said after talks with bank representatives. Aliyev said earlier that if necessary the EBRD might provide a credit for more than €170m.
Of this total, €110m will be used to finance the SOCAR share in the development of the Shah Deniz field and €60m on building the Baku-Tbilisi-Erzurum pipeline.
Shah-Deniz holds an estimated 625bn cubic metres of gas and 101m tonnes of condensate. Stage-1 development includes the production of 178bn cubic metres of gas and 34m tonnes of condensate. During peak production under Stage-1 the field will produce 8.4bn cubic metres of gas and 2m tonnes of condensate a year. Gas will be produced from 15 wells at the TPG-500 platform at sea depths of 105 metres. Production will increase to 16bn cubic metres a year in the later stages of the project. Participants in the Shah Deniz project include SOCAR - 10%, BP - 25.5%, Statoil - 25.5%, TotalFinaElf - 10%, LukAgip - 10%, OIEC (Iran) - 10% and TPAO (Turkey) - 9%.

BP signs US$10m contract on Azeri oilfield with British engineering firm

BP and the British company KCA Deutag Drilling Ltd have signed a US$10m contract on the Phase 3 project envisaging the full-scale development of the Azari-Ciraq-Gunasli oil fields, Yeni Azarbaycan, Baku, reported. 
The contract envisages the drilling, engineering, procurement and building of drilling modules for a technological supply platform, the BP press service has reported. The work will end by the third quarter of 2007.

Salans advises SOCAR on restructuring

Britain's Salans should finish drafting recommendations to restructure Azeri state oil company SOCAR by 2006, Natik Aliyev said recently, Interfax News Agency reported.
"Salans has started to draft the recommendations and will work on them throughout 2005. Once it has submitted the recommendations, we will spend six months identifying the most interesting ones and present them to the government," Aliyev said. The European Bank for Reconstruction and Development (EBRD) has provided one million Euro to finance work on the recommendations. Aliyev said the objective was to "dispense with organisations that perform the same tasks as others and with those which can work independently, and to provide services in other spheres as well as the petroleum industry." SOCAR was last modified in January 2003, following a presidential decree. SOCAR was left with eight major enterprises, constituting a vertically integrated company, at the time.

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FOREIGN ECONOMIC COOPERATION

Azerbaijan, Qatar sign cooperation accords

The emir of Qatar, Hamad Bin-Khalifah Al Thani, met Azerbaijani President, Ilham Aliyev, in Doha recently. The Azerbaijani president was paying an official visit to Qatar, Turan news agency reported.
Emir Al Thani expressed his country's interest in developing cooperation with Azerbaijan. "Political relations between our countries are at a high level. This visit by the Azerbaijani president will enable us to expand cooperation in the economic and other spheres," the emir of Qatar said. 
He added that to develop relations even further, it is necessary to open an Azerbaijani embassy in Doha, organize mutual visits of the two countries' foreign ministers, heads of other state institutions and businessmen. 
During the meeting, the sides pointed to Qatar's extensive opportunities for investing in different sectors of the Azerbaijani economy. Al Thani said that in addition to cooperation, Qatar was ready to help Azerbaijan. The sides agreed to start inviting different specialists from Azerbaijan, including doctors, to work in Qatar.
Ilham Aliyev said Azerbaijan would soon open an embassy in Doha and supported the idea of setting up a joint economic commission. 
Aliyev also expressed his appreciation for Qatar's support of Azerbaijan's position in international organizations, including the UN and the OIC [Organization of the Islamic Conference].
After the top-level negotiations, agreements on cooperation in the areas of health, culture and art, on trade, economic and technical partnership were signed. The sides also signed a memorandum of understanding between the foreign ministries, documents on cooperation between the national Olympic committees of the two countries and on cooperation in tourism.

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