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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


Area (


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


Azeri Manat

Ilham Aliyev

Ilham Aliyev

Update No: 300- (01/01/06)

A chip off the old block
The Azeri regime is a tight dictatorship, which has staged the farce of several elections, first presidential in October, 2004, and then parliamentary late last year. Quite why it has to go through this ritual is the interesting thing. It is an obeisance to the zeitgeist, the obligatory tribute of dictatorial vice to democratic virtue.
The regime has no real legitimacy. The president is simply the son of his father- period.
Ilham Aliyev has taken 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 has been prosecuted from the start. 

When will there be a finish?
The regime is obviously disconcerted at the downfall of President Eduard Shevardnadze in neighbouring Georgia, where a genuine presidential election took place in 2004, after the fiasco of parliamentary elections in late 2003 were exposed by a vocal opposition. This was a procreant force in the events in Ukraine, and then Kyrgyzstan. Why not Azerbaijan next?
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, and Kuchma and Akayev too, which created the possibility to demonstrate for their removal. No such luck for the Azeris, whose opposition is tightly repressed.

The oil factor
The Azeri regime has the advantage of an abundance of oil revenues and a plenitude of foreign friends, including the US. 
It is not just that it has a munificence of oil reserves itself, 31bn barrels at the last count. It is strategically the only way for Kazak oil to reach the world market, so long as the alternative Iranian and Russian routes are ruled out. 
The Baku-Tbilisi-Ceyhan pipeline is meanwhile in place, transporting Kazak as well as Azeri oil to world markets. So long as the black gold flows, the Aliyev regime is assured.

A spanner in the works
Azerbaijan has angered EU member state, Cyprus, by allowing commercial flights to the internationally unrecognised Northern Cyprus. The tussle has thrown a spanner into EU preparations to extend neighbourhood policy "action plans" to the region.
The problems between Azerbaijan and EU-member Cyprus come as a very unwelcome development for Armenia and Georgia, for instance.
The EU is in the habit of preferring to deal with entire regions, not single countries at a time. As a result, both Armenia and Georgia have discovered that their EU neighbourhood "action plans" -- paving the way for closer political cooperation and greater economic aid -- are held hostage to the spat between Baku and Nicosia.
Initial hopes that the "action plans" could be negotiated and signed by the end of the year have begun to recede. "It would be strange if the start of the planned talks between the [European] Commission and Armenia on the draft action plan remained blocked by the dispute between Cyprus and Azerbaijan over flights to Northern Cyprus, since that dispute does not concern Armenia."
EU foreign policy chief Javier Solana offered solace, but no guarantees of a quick breakthrough. "I hope very much that the neighbourhood policy that we have established in the European Union will be a constructive and positive help for Armenia in their relations with the European Union," he said. "As you know still we have not completely started the negotiations, but we hope very much that will be done in the foreseeable future."
EU member states retain full sovereignty in the area of external relations and a single country can theoretically block any decision. The Greek government of Cyprus held out for a long time before giving its consent to EU membership talks with Turkey. Nicosia is likely to face far lesser pressure in the EU in its dealings with Turkey's more remote ally, Azerbaijan.
It remains to be seen in 2006 whether there will be any progress in dealing with the Nagorno-Karabakh enclave now occupied by Armenia, along with a 'corridor' connecting to it, but comprising some 20% of Azerbaijan's territory. Various outside agencies have sought to mediate this long-standing dispute, but so far without success. Until Azerbaijan recovers its territory - not withstanding Nagorno-Karabakh 'proper,' the hostility of Turkey to Armenia, (as Azerbaijan's 'big brother') will continue, thus restricting Armenian trade with the outside world. This quarrel is long overdue for resolution.

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Azerbaijan to up gas output 14% in 2006 

Azerbaijan expects to produce 6.46 billion cubic metres of gas in 2006, up 13.7 per cent on the forecast figure for this year, a source in the government said, Interfax News Agency reported.
The source said the launch of production at the Shah Deniz field, where 856.4 million cubic metres of gas is expected in 2006, will enable the overall increase. Production at the Shah Deniz will play a determining role in increasing Azerbaijan's gas production. Azerbaijan plans to produce 11.055 billion cubic metres of gas in 2007, 14.054 billion in 2008 and 16.030 billion in 2009. Exports from Shah Deniz are due to start in 2006 and will total 542.4 million cubic metres. Exports should grow to 7.04 billion cubic metres in 2009. Condensate production is also due to start at Shah Deniz in 2006. Production volumes will grow from 200,000 tonnes in 2006 to 2.2 million in 2009. All the condensate will be exported. Azerbaijan produced 5.06 billion cubic metres of gas in 2004, down 3.1 per cent. 

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Azerbaijan, ADB sign loans agreement 

The Asian Development Bank (ADB) and Azerbaijan signed on November 29th two loans totalling US$30 million to help improve water supply and sanitation in the regional towns of Agdash, Goychay and Nakhchivan, Interfax News Agency reported. The loans will also finance institutional reform and capacity building activities, including the establishment of new utilities in the form of joint stock companies with modern managerial skills and providing efficient and financially viable long-term operations. 
ADB will also grant 500,000 Euro from its Japan Special Fund, funded by the government of Japan, to help support sector-wide reforms and address legal, regulatory, administrative and institutional frameworks. ADB will cover 75 per cent of the project's total cost of 39.9 million Euro through two loans. ADB's Asian Development Fund provides a 20 million Euro loan, carrying a 32-year term including a grace period of eight year. Interest charges are 1.0 per cent per annum during the grace period and 1.5 per cent per annum thereafter.
Matthew Westfall, country director of the ADB Azerbaijan resident mission, said that the ADB grant is not only a financial aid but also acts as a source of knowledge for policy and structural reforms, strategy implementation, innovative project design, and sound implementation. The water supply project will give help to maintain the water supply and sanitation sector, reduce poverty and bring clean water and health to the people in the regions.

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