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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: 305 - (30/05/06)

Westward Ho
Azerbaijan has offered to help Europe meet its long-term energy needs and reduce its dependence on Russia by putting itself forward as a potential source of natural gas.
llham Aliyev, president of the energy-rich Caspian nation, has made it plain that Azerbaijan is ready to focus on mainland Europe as a potential future market when planning new gas projects. He is departing here from the policy of his father, Haydar Aliyev.
His father was always viewed in Azerbaijan and the wider world as a stooge of Moscow, which by and large he was, a member of the Politburo in Soviet days as president of the country. He invariably carried out its bidding.
He continued doing so after independence in 1991, remaining a loyal satrap. Hence why he was evicted and replaced by Islamic rulers for a while. 
But Moscow arranged a coup that saw him put back in place later in the decade. He died in 2004, bequeathing his son the succession. 
The idea was that Ilham was to continue the same Russophile policy. But he is not so much a chip of the old block as a splinter of it. He, an inveterate gambler, sees Azerbaijan's future towards the West. Sons do not always pursue the path of their fathers.

Welcome to Washington
Aliyev, whose party's sweeping victory in last November's parliamentary elections was widely denounced by Western observers as fraudulent, was, nevertheless, warmly welcomed in Washington in late April. "We talked about the need for the world to see a modern Muslim country that is able to provide for its citizens, that understands that democracy is the wave of the future," Bush said at a brief photo-opportunity. "And I appreciate your leadership, Mr. President." 
The occasion was cut off before reporters could ask any questions about precisely what Aliyev's "understanding" of democracy might be, let alone Azerbaijan's placement as one of the world's most corrupt nations, according to the latest rankings by Transparency International. 
What Aliyev has going for him, of course, is the fact that his nation territory sits atop billions of barrels of hydrocarbons at a time when global supply is stretched very thin; the United States is more dependent than ever on external supplies; and presidential public approval ratings appear increasingly tied to the price of gasoline and home heating oil. Azerbaijan has 31bn barrels of oil reserves at a conservative estimate.
"At the heart of Bush's democracy doctrine was the principle that the United States would abandon its Cold War-era practice of propping up dictators - especially in the Muslim world - in exchange for easy access to their energy resources and military cooperation," according to press sources. 
But "the race for energy and an increasingly bare-knuckled contest with Moscow for influence over its producers have caused the downgrading of the democracy strategy," he wrote, noting that Azerbaijan's proximity to Iran and the existence of a fairly significant Azeri minority in Iran might also help explain Washington's willingness to ignore Aliyev's autocratic peccadilloes. 

Baku undaunted by Iran's pipeline strike threat 
Iran, indeed, recently issued a statement that it might target US regional energy projects, clearly meaning Azeri projects. This does not frighten Azerbaijan, Minister of Industry and Energy, Natig Aliyev, another of the extensive Aliyev clan, has said. He added that any attack on the Baku-Tbilisi-Ceyhan (BTC) main export oil pipeline would be ineffective. 
"The pipeline is 1,730-km long. In the event of an attack, a small section of the pipe may be damaged and can be repaired," Aliyev said. 
Foreign Minister Elmar Mammadyarov too has said there is nothing to worry about. 
"I don't believe things will reach a point when military forces and missiles will have to be used. I am sure the whole world is against a new war. Everything will be done to resolve the crisis diplomatically," he said. 
The minister said the pipeline was not only Azerbaijan's. The US, Japan and other countries have participating shares in the pipeline project and any attack on the facility will also affect the countries involved.
For an overall view of the whole problem, see as follows:-

Azerbaijan on the west's new frontier of energy security 
By Vladimir Socor 
Monday, May 1 2006 
Azerbaijani President Ilham Aliyev's April 24-28 visit to Washington spotlighted the urgency of opening direct Western access to eastern Caspian oil and gas reserves. US policy seems, however tentatively, to move in that direction; the European Union is only beginning to consider the issue; and both are moving too slowly to win.
With the imminent completion of the Baku-Tbilisi-Ceyhan oil pipeline and the parallel line for gas, Azerbaijan's role in the world of energy and geopolitics is set for a qualitative change: From regional projects to projects of global significance, and from a primary role as energy producer to a primary role as energy transit country. This change turns the Western-oriented Azerbaijan into a major factor in Euro-Atlantic energy security. In this regard, Azerbaijan's location has already become a more valuable asset than the country's own reserves; and the value of its location is set to increase from this point on, amid a rapidly intensifying contest over direct access to energy reserves.
Prior to reaching this qualitative threshold, Azerbaijan had already crossed another threshold: No longer simply a consumer of security, it became also a provider of security within the region and farther afield, by deploying troops with US and NATO forces in the Balkans, Afghanistan, and Iraq; providing crucial transit passage to American and allied forces operating in Afghanistan and Central Asia; and successfully containing the radical Islamist challenges to modernization of the country and the region. 
Its potential for energy transit can further enhance Azerbaijan's role as a security provider: Functionally, by adding a decisive dimension of energy security; and geographically, by turning Azerbaijan, alongside Georgia, into a key factor of energy security for a Europe that now faces an over dependence on politically risky Russian supplies. Europe's energy security is a prerequisite to transatlantic political solidarity and NATO cohesion. 
The eastern Caspian basin is key to that security through supply diversification. Azerbaijan and Georgia provide the only existing westward transit option for oil and gas from Kazakstan and Turkmenistan. The Azerbaijani government has taken the lead by upholding the right of Caspian countries to make sovereign decisions about laying pipelines in their respective seabed sectors, despite Russian and Iranian opposition. 
Similarly, Azerbaijan is currently spearheading initiatives on trans-Caspian cooperation in oil and gas transportation westward. This role, however, cannot for long substitute -- and certainly can not effectively substitute -- for the leadership that the United States had earlier exercised in this regard, and from which it seems to have stepped back.
Aliyev's Washington visit could have provided the opportunity for a reaffirmation of US leadership in that regard. A joint political statement at the presidential level, announcing US support for trans-Caspian energy projects, could have been the vehicle for such reaffirmation. This opportunity was passed up, however. The US side considered issuing such a statement but decided against it at the last moment. This decision seems to reflect a lack of clarity in US policy on Caspian energy issues generally. It apparently also reflects an underestimation of the risks that Azerbaijan must face from Russia and Iran as a result of Baku's energy transit initiatives that answer to Western interests. 
Back in 1997, then-Presidents Bill Clinton and Heydar Aliyev signed a joint political statement in Washington, and in 1999 Clinton signed a common declaration with the presidents of Turkey, Georgia, Azerbaijan, Turkmenistan, and Kazakstan on Caspian energy development and transit. Those and similar political documents signaled US commitment at the international level to friend and potential foe alike as well as domestically to the US government agencies, lending institutions, and private energy companies. Thus, the Baku-Tbilisi-Ceyhan and Baku-Tbilisi-Erzurum projects were set on track at that time. 
Those two pipelines in the western Caspian basin form parts of the planned East-West Energy Corridor, which the United States led in promoting during 1995-2001. That corridor's larger components, however, are the unfulfilled trans-Caspian projects from the eastern shore. Paradoxically, the US commitment to trans-Caspian pipelines petered out in the wake of 9/11, instead of redoubling. Those projects' importance is ever-greater in today's global energy context of growing scarcity and insecurity than it was in the benign pre-9/11 environment and before the Kremlin had turned monopolization of transit and markets into strategic policy tools.
To help reactivate those projects, the United States needs to begin by issuing the indispensable political signal to Caspian countries, energy companies, and investment capital markets. It also should reinstate the abolished position of Caspian energy policy coordinator, which proved its value in streamlining regional, European, and US efforts at the government and private-sector level to complete the Energy Corridor's western components. On a parallel track, Washington needs to show no less political commitment to Azerbaijan's security than it does to neighbouring Georgia's. The two countries' security is indivisible, as they function in tandem in providing the unique transit linchpin.
Aliyev's visit helped refocus Washington's attention on those necessary steps to reinstate the trans-Caspian projects high on the list of US energy policy priorities.

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EBRD, Azerbaijan discuss economy 

Azerbaijani President, Ilham Aliyev, and a delegation led by European Bank for Reconstruction and Development President, Jean Lemierre, discussed the former Soviet republic's economy at a meeting in Baku on April 10th, the Azerbaijani president's office said, Interfax News Agency reported.
The intensive character of Azerbaijan's economic development, as well as key energy projects were highlighted, the office told Interfax. Aliyev and Lemierre said cooperation between Azerbaijan and the EBRD was increasing and called for its further growth.
EBRD officials also held meetings with Minister of Economic Development, Heydar Babayev, and the Azerbaijani governor at the EBRD and chairman of the National Bank of Azerbaijan, Elman Rustamov. During Lemierre's visit to Azerbaijan, a two million Euro credit line was signed with a local financial institution, Azerigazbank OJSC, for on-lending to micro, small- and medium-sized Azerbaijani enterprises. The agreement was signed at Caspian B Room at the Hyatt Regency Hotel on April 11th. The very same day, the EBRD delegation also visited the city of Guba, to familiarise itself with development of small and medium-size businesses outside of the country's capital. 
The EBRD said it remains committed to working with Azerbaijan in its transition to a market economy. The Bank's latest strategy for the country focuses primarily on the development of the non-oil sector and regional economic diversification, enhancement of the competitiveness of the banking sector and using that sector as an intermediary to provide support to micro, small and medium-sized enterprises, the rehabilitation of public infrastructure - roads, rail, power, telecommunications and the continuing development of the natural resources sector, with due regard to the environment, transparent management and effective utilisation of revenues.
Azerbaijan has already made progress in this area, being the first EBRD country of operation to sign up to the Extractive Industry Transparency Initiative (EITI), a programme to promote transparency in energy usage and mining.

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Azerbaijan Aluminium to double output by 2008

Azerbaijan aluminium plans to increase aluminium production at its Sumgait smelter to 60,000 tonnes by 2008, company production director Jamil Safarov said. "Production amounted to 29,000 tonnes in 2005, this year we are forecasting 30,000 tonnes in 2006, and by 2008 we intend to double this figure," he said. Safarov said the company has drafted a plan of action to expand production. "We plan to restore the operation of two pot houses, which will enable us to double production. This will create 480 new jobs," he said, Interfax News Agency reported.
Work on restoring the pothouses has already begun. "This work will require a year. Investment will initially be provided by the government, but investors might be attracted in future," he said, without specifying the cost of the project. Safarov also said the company's Ganja alumina refinery is expected to produce 450,000 tonnes this year. "We get 5,000 tonnes of alumina every month, and the rest is exported," he said. Azerbaijan Aluminium comprises the Ganja alumina refinery, Sumgait smelter and Zaglik alunite quarry. Azerbaijan put these enterprises into Fondel Metal Participations BV's trusteeship for 25 years in 2001. The Dutch company pledged to invest one billion Euro but has so far invested just 50 million Euro. It had planned to build a 100,000-tpy smelter at a cost of 250 million Euro - 300 million Euro. But at the beginning of 2006 the government cancelled the trusteeship contract with Fondel Metal. Azerbaijan's government intends to invest more than 50 million Euro in Azerbaijan Aluminium this year, Kariam Hasanov, chairman of the State Property Committee told a press conference on April 14th. "The state intends to ensure that the company develops and its investment in the aluminium industry this year alone will exceed the 48 million Euro invested by Fondel Metal over a period of three years," Hasanov said.


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