Azerbaijan

Economics, Political, and Trade Overview

Source: Feb 10, 2022 Economist Intelligence Unit

Azerbaijan - In Short.

Overview of Azerbaijan

Azerbaijan – a secular nation with a majority-Turkic and majority-Shia Muslim population – was briefly independent (from 1918 to 1920) following the collapse of the Russian Empire; it was subsequently incorporated into the Soviet Union for seven decades. Azerbaijan remains involved in the protracted Nagorno-Karabakh conflict with Armenia. Nagorno-Karabakh was a primarily ethnic Armenian region that Moscow recognized in 1923 as an autonomous oblast within Soviet Azerbaijan. In the late Soviet period, a separatist movement developed which sought to end Azerbaijani control over the region. Fighting over Nagorno-Karabakh began in 1988 and escalated after Armenia and Azerbaijan attained independence from the Soviet Union in 1991. By the time a ceasefire took effect in May 1994, separatists, with Armenian support, controlled Nagorno‑Karabakh and seven surrounding Azerbaijani territories. Under the terms of a cease-fire agreement following Azerbaijan’s victory in the Second Nagorno-Karabakh War that took place from September-November 2020, Armenia returned to Azerbaijan the remaining territories it had occupied and also the southern part of Nagorno-Karabakh, including the culturally and historically important city that Azerbaijanis call Shusha and Armenians call Shushi. Despite Azerbaijan’s territorial gains, peace in the region remains elusive because of unsettled issues concerning the delimitation of borders, the opening of regional transportation and communication links, the status of ethnic enclaves near border regions, and the final status of the Nagorno-Karabakh region. Russian peacekeepers deployed to Nagorno-Karabakh to supervise the cease-fire for a minimum five-year term have not prevented the outbreak of sporadic, low-level military clashes along the Azerbaijan-Armenia border in 2021.In the three decades following its independence in 1991, Azerbaijan has succeeded in significantly reducing the poverty rate and has directed revenues from its oil and gas production to develop the country’s infrastructure. However, corruption remains a burden on the economy, and Western observers and members of the country’s political opposition have accused the government of authoritarianism, pointing to elections that are neither free nor fair, state control of the media, and the systematic abuse of human rights targeting individuals and groups who are perceived as threats to the administration. The country’s leadership has remained in the Aliyev family since Heydar ALIYEV, formerly the most highly ranked Azerbaijani member of the Communist Party during the Soviet period, became president in the midst of the first Nagorno-Karabakh War in 1993. Heydar ALIYEV groomed his son to succeed him, and Ilham ALIYEV subsequently became president in 2003. As a result of two national referendums that eliminated presidential term limits and extended the presidential term from 5 to 7 years, President ALIYEV secured a fourth term in April 2018 in an election that international observers noted had serious shortcomings. Reforms are underway to diversify the country’s economy away from its dependence on oil and gas; additional reforms are needed to address weaknesses in government institutions, particularly in the education and health sectors, and the court system.
Value
Country Full Name
Azerbaijan
Country Code
AZE
Region
Europe & Central Asia
Income Group
Upper middle income
Currency Unit
GDP
42607176471
Population
10093121
Land Area
82654
Net National Income Per Capita
3483.922798
GDP per Capita (PPP)
14479.70541

2020 GDP Growth Rate (Current USD)

2020 GDP Per Capita (Current USD)

2020 Urbanization Rate (%)

2020 Total Fertility Rate (Birth Per Woman)

Doing Business Score (100= Most Friendly)

Azerbaijan - Economic

Economy of Azerbaijan

Prior to the decline in global oil prices since 2014, Azerbaijan’s high economic growth was attributable to rising energy exports and to some non-export sectors. Oil exports through the Baku-Tbilisi-Ceyhan Pipeline, the Baku-Novorossiysk, and the Baku-Supsa Pipelines remain the main economic driver, but efforts to boost Azerbaijan’s gas production are underway. The expected completion of the geopolitically important Southern Gas Corridor (SGC) between Azerbaijan and Europe will open up another source of revenue from gas exports. First gas to Turkey through the SGC is expected in 2018 with project completion expected by 2020-21.Declining oil prices caused a 3.1% contraction in GDP in 2016, and a 0.8% decline in 2017, highlighted by a sharp reduction in the construction sector. The economic decline was accompanied by higher inflation, a weakened banking sector, and two sharp currency devaluations in 2015. Azerbaijan’s financial sector continued to struggle. In May 2017, Baku allowed the majority state-owed International Bank of Azerbaijan (IBA), the nation’s largest bank, to default on some of its outstanding debt and file for restructuring in Azerbaijani courts; IBA also filed in US and UK bankruptcy courts to have its restructuring recognized in their respective jurisdictions.Azerbaijan has made limited progress with market-based economic reforms. Pervasive public and private sector corruption and structural economic inefficiencies remain a drag on long-term growth, particularly in non-energy sectors. The government has, however, made efforts to combat corruption, particularly in customs and government services. Several other obstacles impede Azerbaijan’s economic progress, including the need for more foreign investment in the non-energy sector and the continuing conflict with Armenia over the Nagorno-Karabakh region. While trade with Russia and the other former Soviet republics remains important, Azerbaijan has expanded trade with Turkey and Europe and is seeking new markets for non-oil/gas exports – mainly in the agricultural sector – with Gulf Cooperation Council member countries, the US, and others. It is also improving Baku airport and the Caspian Sea port of Alat for use as a regional transportation and logistics hub.Long-term prospects depend on world oil prices, Azerbaijan’s ability to develop export routes for its growing gas production, and its ability to improve the business environment and diversify the economy. In late 2016, the president approved a strategic roadmap for economic reforms that identified key non-energy segments of the economy for development, such as agriculture, logistics, information technology, and tourism. In October 2017, the long-awaited Baku-Tbilisi-Kars railway, stretching from the Azerbaijani capital to Kars in north-eastern Turkey, began limited service.

Unemployment Rate

Inflation Rate

Azerbaijan - GDP Composition

GDP Composiiton & Value Added of Azerbaijan

Last Updated: Jan, 2021, Updated For 2020.

Azerbaijan - GDP, Value Added

Demographics of Azerbaijan

highest population density is found in the far eastern area of the country, in and around Baku; apart from smaller urbanized areas, the rest of the country has a fairly light and evenly distributed population
Geographic Location

Southwestern Asia, bordering the Caspian Sea, between Iran and Russia, with a small European portion north of the Caucasus range

Races

Azerbaijani 91.6%, Lezghin 2%, Russian 1.3%, Armenian 1.3%, Talysh 1.3%, other 2.4% (2009 est.)note: the Nagorno-Karabakh region, which is part of Azerbaijan on the basis of the borders recognized when the Soviet Union dissolved in 1991, is populated almost entirely by ethnic Armenians

Languages

Azerbaijani (Azeri) (official) 92.5%, Russian 1.4%, Armenian 1.4%, other 4.7% (2009 est.)major-language

Religion

Muslim 97.3% (predominantly Shia), Christian 2.6%, other <0.1, unaffiliated <0.1 (2020 est.)note: religious affiliation for the majority of Azerbaijanis is largely nominal, percentages for actual practicing adherents are probably much lower

Dependency & Expectancy of Azerbaijan

Last Updated: Jan, 2021

Dependency Ratio

Expectancy

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Azerbaijan - Social Media Briefing

Azerbaijan - Social Media & Social Commerce

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Politics & Policies of Azerbaijan

2021 Policies Overview

Updated Coming in March 2021 after our team finish summarizing countries policy.

International Organizations

ADB, BSEC, CD, CE, CICA, CIS, EAPC, EBRD, ECO, FAO, GCTU, GUAM, IAEA, IBRD, ICAO, ICC (NGOs), ICRM, IDA, IDB, IFAD, IFC, IFRCS, ILO, IMF, IMO, Interpol, IOC, IOM, IPU, ISO, ITSO, ITU, ITUC (NGOs), MIGA, NAM, OAS (observer), OIC, OPCW, OSCE, PFP, UN, UNCTAD, UNESCO, UNHCR, UNIDO, UNWTO, UPU, WCO, WFTU (NGOs), WHO, WIPO, WMO, WTO (observer)

Import of Azerbaijan

Export of Azerbaijan

Import Destination

Export Destination