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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)

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: 279- (23/03/04)

The counter-revolution that did not have to happen
The events of the autumn in the Caucasus formed an interesting pattern. The election of Ilham Aliyev took place in October, on the 15th to be precise and every day counted here. For barely a month later the Rose Revolution in Georgia took place next door. On November 22nd Shevarnadze was ousted by popular clamour at a rigged election, led by the Western-oriented champion of drastic change, Mikhail Shevardnadze.
It is worth speculating what would have happened if the Azeri election had taken place just a month after the Georgian ones, and so after the Rose Revolution. The Azeris would hardly have taken the rigging of their election lying down, because in fact they didn't in October. There were massive demonstrations against the result in Baku. The key thing is that the West did not protest then. It would not have been so easy for them to turn a blind eye to the electoral malpractices after the Rose Revolution as they could beforehand. The double standards would have been too obvious.
The Azeri regime would have used force, just as it did in October. The West would have had to react more sharply. A very different situation would obtain today in Azeri-Western relations and in the morale of the Azeri opposition.

Opposition in disarray
What actually occurred in October was as follows. Officials blamed opposition activists, especially those belonging to the Musavat Party, for attempting to foment unrest during the aftermath of the election on October 15th, which led to hundreds of arrests of loyalists to Musavat, the main opposition grouping. In mid-October, officials began to pressure Musavat loyalists, arresting hundreds. According to various media reports, up to 100 people have also been fired from state jobs because of their affiliation with opposition political parties.
This was about as demoralizing for the opposition as could well be imagined. In the thick of the repression came the Rose Revolution, with the US playing a key role.
Whatever the West may think, the Azeris certainly consider that it is applying double standards, one for a Muslim country with vital oil resources, another for a Christian one that is historically part of Europe. 
Bush made a speech on November 5th at the Democracy Endowment Agency in Washington, in which he repudiated the foreign policy of Realism towards the Middle East that the US had long followed, supporting authoritarian regimes, such as the Saudi one, because they have the oil. Hence the need to remove Saddam.
Well clearly Azerbaijan falls outside of the neo-con remit when it comes to regime change in favour of democracy. The US policy that counts here is best expressed as follows, for the Muslim Caucasus, whether Chechnya or Azerbaijan it is back to Realism. As a certain Richard Cheney, former CEO of Halliburton, which stands to reap profits from Caspian pipeline deals, puts it "The good Lord didn't see fit to put oil and gas only where there are democratically elected regimes friendly to the United States. Occasionally we have to operate in places where, all things considered, one would not normally choose to go. But, we go where the business is."

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ENERGY

SOCAR to install wind power station at field

Azerbaijani state oil company SOCAR and the United Nations Development Programme (UNDP) plans to implement a pilot project to install a wind power station at one of the country's oil companies, Interfax News Agency reported.
The project envisages a one-megawatt wind power station at the Amirov Oil and Gas Production Department. The station will be purchased from Wimpro of Germany.
SOCAR did not specify the cost of the project but said the installation itself cost US$700,000 to US$750,000.
Transport and training costs need to be added to this amount. The UNDP will finance a third of the project, Wimpro a third and SOCAR a third.
The project is to begin in 2004 and take one year to complete. If the wind power station is successful, similar stations will be installed at all oil companies. If this is the case, SOCAR will require six to seven years for complete transferral to wind stations.
SOCAR plans next to install wind stations in Baku, which will lower costs 35-40%.
The installations will pay for themselves within four to five years and can be operated for 25 to 30 years.
SOCAR analysts said state oil companies consume 1.2bn kilowatt-hours of electricity a year, costing from US$38m to US$40m. A one-megawatt wind power station produces up to 6m kilowatt-hours a year.
SOCAR would require 300 to 350 of such stations to satisfy needs. Wind power stations work with a wind-force of three metres a second.
The wind-force in Baku and Apsheron, where the main oil and gas fields are located, exceeds that during 320 days a year.

SOCAR picks up structures dropped by foreign investors

Azerbaijani state oil company SOCAR plans to start developing fields that have been dropped by foreign investors, particularly the Karabakh and Ashrafi fields, SOCAR Vice President , Khoshbakht Yusifzade, said recently, Interfax News Agency reported.
"In any case work will not begin before 2006-2007. First of all we need to calculate investment in development. If the decision is positive, we will begin with Karabakh," he said.
A source in SOCAR said that research at these fields would be completed in the first quarter this year. "Based on the results of this and on economic effectiveness indicators, a decision will be reached regarding development," the source said.
A contract for the development of the Karabakh structure was signed in 1995 by SOCAR (7.5%), Devon (1.3%), LUKoil (12.5%), Agip (5%) and LUK-Agip (45%). Exploration work confirmed the presence of 40m tonnes of hydrocarbon reserves, but this was insufficient to satisfy the companies. Up to US$130m was spent on exploration work. The contract was annulled on February 23rd, 1999. The Karabakh field is located in the northern part of the Absheron Archipelago, 23km north of the Azerbaijani field. Water depth at the contract zone is 180m. 
The contract for the Ashrafi-Dan-Ulduzu block was signed in 1997 by SOCAR (20%), BP (30%), Unocal (25.5%), Itochu (20%) and Delta Hess (4.5%). Reserves here also turned out to be small - 20-40m tonnes. Ashrafi was the first field Azerbaijan discovered by foreign companies. The contract expired on March 7th, 2000. The field is located north of the Absheron Archipelago, to the west of the Karabakh field. The sea depth at the structure is 160-180m.
Of the 22 contracts signed by SOCAR for the development of prospects, six were torn up at the request of the foreign partners. In addition to the two already mentioned, contracts were annulled for the Lenkoran-Talysh, Oguz, Muradkhanly and Kyurdashi blocks.

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ENVIRONMENT

Environment under threat from Baku-Ceyhan pipeline - international body

The speedy implementation of the project to construct the Baku-Tbilisi-Ceyhan (BTC) export oil pipeline poses a threat to the flora and fauna of the entire Caspian region, an official of the World Wildlife Fund, Frank Merchel, said in a statement, Trend News Agency reported.
He said that the project was quite risky. The pipeline would run through a number of national parks of Azerbaijan and Georgia and would also go through areas at a height of 2.7 metres and with high seismic activity, he explained. 
"It is irresponsible to say that the pipeline is ecologically secure. With the current approach by the companies involved in the project, an ecological catastrophe can be regarded as inevitable," Merchel said.

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FOREIGN LOANS & AID

IMF agrees to aid Azeri government with oil revenues strategy

A number of agreements have been reached during talks between an IMF mission and the Azerbaijani government, Deputy Director of the IMF European II Department, John Wakeman-Linn, said at a news conference in Baku recently, Trend News Agency reported.
Namely, the sides reached an agreement on the fund's assistance to Azerbaijan in preparing a long-term strategy of spending its oil revenues. According to the strategy, oil revenues will be used in line with the poverty reduction programme, the development of the non-oil sector, support for macroeconomic stability etc.
John Wakeman-Linn pointed to considerable progress in two important laws - on the banking system and on the National Bank. At the same time, no agreement was reached on other issues, including the issue of privatisating the International Bank of Azerbaijan (IBA). "The government and the IMF understand the importance of privatisating the IBA. As long as the bank continues to be a monopolist and a state body, it is impossible to create a favourable banking system in Azerbaijan," he said.
According to John Wakeman-Linn, the privatisation of the IBA is progressing more slowly than the government and the IMF would like, therefore, measures are being taken to speed it up.
The sides also discussed the issue of raising energy prices in Azerbaijan. According to John Wakeman-Linn, the issue of raising gas and electricity prices is not on the agenda at the moment in order to protect the low-income categories of the population. The sides are not discussing kerosene and diesel prices either.
"The government thinks it necessary to prepare a system of social protection and the IMF agrees with that," the head of the fund's mission said.
He said that the sides are discussing the issue of bringing the domestic prices of petrol, fuel oil and aviation fuel in line with the world standards. The IMF insists that changes should affect retail prices as well, in other words, the government must not change excise rates on oil products.

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MINERALS & METALS

Platinum found in Azerbaijan

Specialists from the Azerbaijani Ministry of Ecology and Natural Resources have discovered the country's first platinum deposits, ANS TV reported.
The deposits of platinum regarded as the most valuable metal, are located in the lowland Caucasus and the north-eastern part of the Talis mountains. The amount of platinum in the deposit and the amount of platinum to be obtained from a tonne of ore will be determined through thorough research.

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