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Key Economic Data 
  2003 2002 2001 Ranking(2003)
Millions of US $ 7,124 6,090 5,600 102
GNI per capita
 US $ 810 710 650 146
Ranking is given out of 208 nations - (data from the World Bank)

Books on Azerbaijan


Update No: 349 - (25/01/10)

A tangled skein
There is no doubt what constitutes the prime geopolitical issue for the Azeris - to establish a modus vivendi with Armenia and obtain the return of the dispossessed territories around Nagorno-Karabakh, the Armenian enclave within Azerbaijan, from which one and a half million Azeris have been evicted.

The Azeris are scared that the Armenians and Turks are hatching a deal that will not be in their interest, indeed very much to their detriment. But the profound distrust that prevails between the two latter may well prevent it coming to fruition.

The elites in Armenia and Turkey want an end to the feud between their countries that costs them millions per month in trade revenues and the like. The Turks imposed a trade embargo on Armenia in the course of the war the latter won, with Russian help, over the Azeris in the aftermath of the break-up of the USSR. It concerned of course Nagorno-Karabakh and its surrounds.

It looked in October as if a rapprochement between the Armenians and Turks was being initiated, at least between their respective governments and central authorities. But the populace in Armenia have other ideas, much to the relief of Baku.

Protest against the Armenian Central Court judgement
As protestors in downtown Yerevan in late January yelled : "No concessions to the Turks!," the Court, guarded by a police line, ruled that the "obligations contained in the protocols signed on October 10, 2009 by Armenian President Serzh Sargsyan and Turkish President Abdullah Gul" comply with the Constitution of the Republic of Armenia.

The protocols will next go to Armenia’s National Assembly for a vote on ratification. Turkey’s parliament has yet to ratify the documents.

The protests and the Court’s prolonged deliberation - Sargsyan submitted the protocols for review on November 19, 2009 - sparked some speculation that a decision by the body’s nine judges might be delayed. But the final verdict took few Armenians by surprise. The Court is not known for going against the Sargsyan administration’s policies.

Controversy over whether or not the protocols will hold Armenia to so-called "pre-conditions" - an expression that embodies multiple popular misgivings - nonetheless looks set to continue.

Many Armenians fear that the protocols presume an Armenian withdrawal from territories surrounding the disputed region of Nagorno-Karabakh that are claimed by Turkish ally Azerbaijan. Others take issue with the formation of a commission of historians to review materials related to Ottoman Turkey’s 1915 slaughter of ethnic Armenians; an event most Armenians see as an indisputable case of genocide. Still others worry that the protocols’ call for the recognition of the Armenian and Turkish borders means the permanent loss of lands in Turkey once held by Armenia.

Ruling Republican Party of Armenia spokesperson Eduard Sharmazanov counters that the reconciliation process is proceeding according to plan, and presents no cause for alarm. "We will never agree to establish ties [with Turkey] with any preconditions, as we have repeatedly declared," Sharmazanov said. The Court found that the protocols’ terms "have an exclusively bilateral, interstate character and cannot relate to or be attributed to a third party."

But that finding will most likely do little to persuade domestic critics of the peace process. The nationalist Armenian Revolutionary Federation - Dashnaktsutiun and 14 other political groups have announced plans for a joint lobbying effort to persuade parliament to vote against ratification. Protestors earlier burned copies of the documents outside the Constitutional Court.

"The Armenian authorities got carelessly stuck in the Armenian-Turkish process, but cannot master it," fumed Armenian Revolutionary Federation - Dashnaktsutiun member Armen Rustamian at a January 11 rally in Yerevan. "The earlier they realize their mistakes, the easier it will be to avoid the threats looming over the country and the people."

Armenia’s government coalition holds a clear majority in parliament, but that tactical advantage does not discourage key members of one minority opposition party allied with the Armenian Revolutionary Federation-Dashnaktsutiun.

Opposition Heritage Party parliamentary faction leader Stepan Safarian charged that Turkey’s ongoing references to Nagorno Karabakh leave but one option open for Armenia’s opposition, despite government reassurances that concessions on the issue will not be made. "We will do our best both in the parliament and outside it to suspend this . . . unpatriotic process," Safarian pledged.

Gazprom turns to Azerbaijan
Having significantly lowered natural gas imports from Turkmenistan, Russia’s state-controlled energy conglomerate Gazprom is turning to Azerbaijan to make up some of the difference. Gazprom and its Azerbaijani counterpart SOCAR announced on January 21 that the Russian conglomerate would significantly increase gas purchases from Azerbaijan over the next two years.

An agreement signed last year, indicated that Gazprom would buy 500 million cubic meters (mcm) of gas from SOCAR in 2010. But following a meeting in Moscow between Gazprom CEO Alexei Miller and his SOCAR counterpart Rovnag Abdullayev, the Russian firm announced that it would obtain 1 billion cubic meters (bcm) of SOCAR gas this year and 2 bcm in 2011.

Following the meeting with Abdullayev, Miller reiterated a pledge to purchase "as much gas as SOCAR can supply." Experts widely believe Gazprom’s desire to lock up SOCAR’s gas production is motivated by a desire to prevent the construction of new energy export routes that would circumvent Russia, and, therefore, break the Kremlin’s stranglehold on the European market.

One such project, the proposed Nabucco pipeline, has long been stalled by questions about financing, profitability and reliable suppliers.

Azerbaijan has been a supporter of Nabucco, but Baku’s willingness to ramp up exports to Russia could be a signal that Azerbaijani policymakers are losing faith that the project will ever surmount its existing obstacles.

SOCAR in recent months has significantly increased its volumes of gas exports. According to a company statement, it exported 146.58 mcm of gas in December, up from 41.83 mcm last June. Overall in 2009, SOCAR exported 1.03 bcm of gas.

Gazprom recently cut the amount of gas that it imports from its main Central Asian supplier, Turkmenistan, by almost half.

Purchases from Azerbaijan will not come close to covering the shortfall in Turkmen supplies, but they could nonetheless help Moscow maintain its strong position in the Caspian Basin energy market.

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