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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: 277- (01/02/04)

Keeping power in the family
The Azeri regime is a tight dictatorship, which on October 15th staged a farce of a presidential election. Ilham Aliyev took over from his father, Heidar, as Azerbaijan's president, promising to keep the policies of his parent intact. Following his inauguration, Ilham expressed willingness to engage opposition leaders in a political dialogue. In fact, a crackdown on opposition activists had been unleashed at the outset after the controversial presidential vote was announced. 
The regime is obviously disconcerted at the downfall of President Eduard Shevardnadze in neighbouring Georgia, where a genuine presidential election took place on January 4th, after the fiasco of parliamentary elections in November were exposed by a vocal opposition.
But the Azeri clique in power has never made the mistake of allowing a free press and giving opposition forces rights of free speech and assembly, as Shevardnadze did, which created the possibility to demonstrate for his removal. No such luck for the Azeris, whose opposition is tightly repressed.
Ilham's father, who has since died, 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, we are told, is giving up his earlier frolicsome ways, notorious for having been a playboy and former manager of casinos, which all went bust. He is now assuming the full dignity of his high office


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 legacy. Ilham offered extensive praise for Azerbaijan's economic achievements during his father's presidential tenure. "We will strengthen your monument," Ilham said. "I believe in Azerbaijan's lucky future," added Ilham, who became the country's fourth president since Azerbaijan regained independence after the 1991 collapse of the Soviet Union.
Ilham vowed to keep existing policies in place, while promising to devote more resources to reducing poverty and addressing other social ills.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 said the continued development of the country's oil and gas sector would serve as the cornerstone of overall economic growth. He pledged that oil profits, invested by the State Oil Fund, would "effectively serve the Azerbaijani people."
"The stability and public and political order that have reigned in Azerbaijan in recent years have enabled us to take great steps in the sphere of attracting investment," Aliyev said. "It is the duty of all of us to preserve, retain and strengthen this stability in Azerbaijan. No one can disrupt stability ... and if someone tries to do so, we will not allow this to happen." 
The nature of the 'dialogue'
The sting is in the tail here. At first 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 with 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 - authoritarianism.
It is abundantly clear that any dialogue would occur on terms set by the government. Officials have blamed opposition activists, especially those belonging to the Musavat Party, for attempting to foment unrest during 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. Since mid-October, officials have pressured Musavat loyalists, arresting hundreds. According to various media reports, up to 100 people have been fired from state jobs because of their affiliation with opposition political parties. 
Many Azerbaijanis appear skeptical that Aliyev will make good on his promises to improve living conditions. Such sentiment was summarized in a November 1 commentary published in the Novoye Vremya newspaper in Baku. 
"Yesterday [October 31] behind the wide shoulders of policemen who reliably sealed off the Palace of the Republic, and in conditions of heightened security, Ilham Aliyev became the fourth president of the country," the commentary said. "The first one [Ayaz Mutalibov] is in [exile in] Moscow. The second one [Abulfaz Elchibey] is dead. The whereabouts of the third [Heidar Aliyev] are still unknown, and the fourth pledges to take Azerbaijan to a bright future, which was also promised by the second and third presidents before him." 
"The presidents come and go, but the 'bright future' remains a mirage," the commentary added.

The West approves
Nevertheless the US and the EU have expressed no undue concern at Azeri developments. Too much is at stake. On October 30th the EU representative for the Caucusus, Heikki Talvitie, announced that "the EU will be working with Ilham Aliyev." He made his first foreign trip to Paris in late January, invited by French President, Jacques Chirac, who must be missing his former chum of a Mustin despot in Saddam Hussein.
As a certain Richard Cheney, former CEO of Halliburton, the massive oilfield construction company, private security firm, 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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AGRICULTURE

Azeri government importing grain to stop rise in bread prices

Measures are being taken to prevent a rise in the price of bread in Azerbaijan. Prime Minister, Artur Rasizada, has said that the government is having ongoing negotiations with several countries on purchasing grain, 525 Qazet has reported. If the import of grain does not affect the rise in the price of bread in the country, the government will take other measures in this direction. The premier said that the Cabinet of Ministers is having negotiations on purchasing 100,000 tonnes of grain from Russia in January-February.
Azerbaijan will import 300,000 tonnes of grain from Kazakstan by May 2004. A delegation led by First Deputy Prime Minister Abbas Abbasov met the Kazak president and prime minister a few days ago and signed a number of agreements on purchasing grain. The agreements were signed by private companies on behalf of Azerbaijan. One tonne of grain will cost US$165; 50,000 tonnes of grain purchased from Kazakstan under agreements signed earlier have already been delivered to the country.

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ENERGY

IFC to open credit line for Baku-Ceyhan in February

The International Finance Corp will open a credit line to finance the Baku-Tbilisi-Ceyhan pipeline in February 2004, Interfax News Agency quoted Aliya Nuriyeva, the head of the IFC office in Azerbaijan, as saying on December 12th. "The signing of this credit agreement is scheduled for January 2004. The funds will be allocated in February as long as no technical problems occur," she said.
Preparation of documentation to organise financing for the project has almost been completed. The official signing of an agreement between all creditors of the project, BTC Co shareholders and governments of Azerbaijan, Georgia and Turkey will take place in January 2004. The total amount of funds attracted for the project, including interest rates will amount to US$2.5bn, with a total project cost of US$3.6bn, the source said.
Direct construction costs will amount to US$2.95bn, of which 30 per cent will be invested by shareholders and 70 per cent will be received as credits. Other expenditures include the acquisition of 10 million barrels of oil to fill the pipeline (about US$250m) and servicing of credits, the source said. Of the total amount of credits, the IFC will provide US$125m, and also participate in a syndicated credit with commercial banks, whose names have not yet been released, amounting to US$125m.
The future pipeline will stretch 1,767 kilometres (443 km through Azerbaijan, 248 km through Georgia and 1,076 km through Turkey) and will have a capacity of 50 million tonnes of oil per year and will require 1.5m tonnes of oil fill it. 

US bank approves US$160m loan under Baku-Ceyhan pipeline project

The US Exim-Bank approved on 30th December a long-term guarantee of US$160m for the export of American equipment and services to be used in the construction of the Baku-Tbilisi-Ceyhan (BTC) oil pipeline, Turan News Agency has reported. The bank made the decision after submitting information on the project to the US Congress.
"The US involvement in this project will give the Americans thousands of jobs among the exporters and suppliers," the bank's chairman, Philip Merrill, said.
US companies will supply engineering services, management and pumping systems for the project.
In assessing the project's environmental impact, Exim-Bank cooperated with the International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD) and export-credit agencies of other countries to ensure that the project meets international standards.
The IFC, the EBRD, the US Overseas Private Investment Corporation (OPIC) and four commercial banks are involved in financing the project which is valued at about US$3bn.

Azeri oil major produces 8.9m tonnes of oil in 2003

In 2003, the State Oil Company of the Azerbaijani Republic (SOCAR) and the joint ventures it co-founded produced 8.924m tonnes of oil, which is 123,700 tonnes, or 1.4 per cent, above the plan. SOCAR told Media-Press News Agency that SOCAR itself produced 8.064m tonnes (a 0.2-per cent increase), while the joint ventures produced 861,300 tonnes (increase of 14.8 per cent).
According to the forecast, 15.45m tonnes of oil will be extracted in 2004, 8.75m tonnes of which will be extracted by SOCAR and 6.7m tonnes by the Azerbaijani International Operating Company (AIOC). Of this, 9.2m tonnes of oil will be exported, including 6.7m tonnes through the Baku-Supsa and 2.5m tonnes through the Baku-Novorossiysk oil pipelines.

SOCAR announced tender for 2nd January oil consignment

Azeri state oil company, SOCAR, has announced a tender for a second consignment of Azeri oil to be exported through the Baku-Novorossiisk pipeline in January, a source in the company's marketing department said.
The second consignment will amount to 80,000 tonnes to be shipped from Novorossiisk at the end of January. The results of the tender were to be announced in late December.
France's TotalFinaElf bought the first January consignment amount to 130,000 tonnes. This consignment should be shipped on January 17-18th. SOCAR plans to export a total of 210,000 tonnes to Novorossiisk in January in two consignments. Total exports along this route in 2004 will amount to 2.5m tonnes, the same level as in 2003. 

BP-Azerbaijan chief confident of oil projects' success

A possible drop in world oil prices will not lead to the shutting down of oil projects in Azerbaijan, Interfax News Agency quoted BP-Azerbaijan President, David Woodward, as saying in a recent interview.
Even if there is a sharp drop, for examples if prices fall to US$10 per barrel or below for the long-term, this will only affect the pace of implementation of projects, but will not lead to the total stoppage of work in Azerbaijan, Woodward said. "We and our partners have spent billions of dollars and have taken on obligations for new investments. There is no way back. Even if oil prices fall we will have to push forward with projects, just so as to recover investments," he said. He estimated that prices in 2004-2005 would remain at US$20 or over per barrel. 
Woodward also does not see any serious problems with the sale of Azeri oil in connection with a future increase in supplies of Iraqi oil to the world market. The oil market is an international market, on which oil from one country cannot squeeze out oil from another. Market demand increases annually, therefore additional volumes of oil are needed, both from Iraq and from the Caspian region, he said. BP is the operator of four large oil and gas projects in the Azeri sector of the Caspian Sea.

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ENVIRONMENT

Azerbaijani mine clearance agency set to buy equipment

The Azerbaijan National Agency for Mine Action (ANAMA) intends to purchase special vehicles and equipment from foreign countries in a bid to clear the areas, which are near the zone of conflict with Armenia, of landmines, Assa-Irada News Agency has reported.
The reason for the move is the Azerbaijani government's intention to repatriate internally displaced persons (IDPs) to Fuzuli, Agcabadi, Xanlar and Agstafa Districts starting in 2004. The clearance process is also expected to commence in Xocavand District next year. 
ANAMA told Assa-Irada that each vehicle to be purchased would allow the clearing of a 5m sq. area from landmines per annum. A Sixty million sq. m. area is still to be cleared. 
Thus far, ANAMA has cleared a total of 6,700,000 sq. m. from landmines through manual clearance activities. 400 of the 1,400 landmine victims have died in the areas freed from Armenian occupation since 1994, when a cease-fire was reached.

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FOREIGN LOANS & AID

IMF allocates US$18m to Azerbaijan to alleviate poverty

The reserves of the National Bank of Azerbaijan [NBA] have increased by US$18m because of credits allocated by the International Monetary Fund [IMF], ANS TV has reported. 
The IMF, which expects the Azerbaijani government to fulfil its demands, was to allocate the credit this October. But the issue was postponed since the Baku government delayed fulfilling some of the IMF demands. 
The credit is allocated to Azerbaijan within the framework of the poverty reduction and economic development programme. This is the fourth credit that the IMF has allocated to Azerbaijan under this programme. Before this, the institution, whose headquarters are located in Washington, allocated to Azerbaijan about US$41m. 
As for the IMF demands, they are the elimination of tax concessions, the reduction of the VAT-free products, and a speedy privatisation of the International Bank.

Asian Bank of Development allocates US$22m to Azerbaijan

The board of directors of the Asian Bank of Development [ABD] has approved the allocation of a US$22m credit to Azerbaijan. The credit will be channelled into the financing of projects to establish flood-protection structures in Azerbaijani regions, MPA News Agency has reported. The project is worth US$29.35m in total. The Azerbaijani government will pay US$7.35m for some of the work.
According to MPA, the credit is allocated for 32 years with an eight-year period of grace and one per cent interest per annum during this period and a 1.5 per cent interest rate after that. The project envisages the protection from floods of farm land along the coasts of the Araz, Qanix and Mazim Rivers. The project will cover 12 districts in four regions of the republic prone to floods. The protection facilities will be constructed in five main towns and 43 villages which cover 76,790 hectares of land.
The board of directors also decided to allocate a grant worth US$500,000 through the special Japanese fund to assist the Azerbaijani government in drawing up a strategy for resolving the flood problems for the medium and long term. The state committee for melioration will implement the project (it will end in March 2008).

World Bank to grant US$15m to Azerbaijan to clean oil-polluted land

The World Bank will allocate US$14-15m for the implementation of the project to clean up the polluted land of the Abseron peninsula, on which major onshore oil and gas fields are located, Ecology and Natural Resources Minister of Azerbaijan, Huseyn Bagirov, has told journalists, Turan News Agency has reported.
He said that the bank agreed to provide the funds, 50 per cent of which would be given as a credit and the rest as a grant. 

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