Nation at a Glance - Azerbaijan

History

Azerbaijan - a 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 has yet to resolve its conflict with Armenia over Nagorno-Karabakh, a primarily ethnic Armenian-populated region that Moscow recognized in 1923 as an autonomous republic within Soviet Azerbaijan after Armenia and Azerbaijan disputed the territory's status. Armenia and Azerbaijan reignited their dispute over the area in 1988; the struggle escalated militarily after both countries attained independence from the Soviet Union in 1991. By May 1994, when a cease-fire took hold, ethnic Armenian forces held not only Nagorno-Karabakh but also seven surrounding provinces in the territory of Azerbaijan. The OSCE Minsk Group, co-chaired by the US, France, and Russia, is the framework established to mediate a peaceful resolution of the conflict.Corruption in the country is widespread, and the government, which eliminated presidential term limits in a 2009 referendum and approved extending presidential terms from 5 to 7 years in 2016, has been accused of authoritarianism. Although the poverty rate has been reduced and infrastructure investment has increased substantially in recent years due to revenue from oil and gas production, reforms have not adequately addressed weaknesses in most government institutions, particularly in the education and health sectors, as well as the court system.

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

Border Countries: Armenia 996 km, Georgia 428 km, Iran 689 km, Russia 338 km, Turkey 17 km

Total Area: 86,600 sq km Land: 82,629 sq km Water: 3,971 sq km

Climate: Dry, semiarid steppe

Terrain: Large, flat Kur-Araz Ovaligi (Kura-Araks Lowland, much of it below sea level) with Great Caucasus Mountains to the north, Qarabag Yaylasi (Karabakh Upland) to the west; Baku lies on Abseron Yasaqligi (Apsheron Peninsula) that juts into Caspian Sea

Natural resources: Petroleum, natural gas, iron ore, nonferrous metals, bauxite

Land use: Agricultural land: 57.6%arable land 22.8%; permanent crops 2.7%; permanent pasture 32.1% Forest: 11.3% Other: 31.1% (2011 est.)

Ethnic groups: Azerbaijani 91.6%, Lezghin 2%, Russian 1.3%, Armenian 1.3%, Talysh 1.3%, Other 2.4%

Languages: Azerbaijani (Azeri) (official) 92.5%, Russian 1.4%, Armenian 1.4%, Other 4.7% (2009 est.)

Religions: Muslim 96.9% (predominantly Shia), Christian 3%, Other <0.1, Unaffiliated <0.1 (2010 est.)

Population: 9,872,765 (July 2016 est.)

Literacy: 99.8%; Male: 99.9%; Female: 99.8% (2015 est.)

Administrative divisions: 66 rayons (rayonlar; rayon - singular), 11 cities (saharlar; sahar - singular);

Economy: Prior to the decline in global oil prices since 2014, Azerbaijan's high economic growth was attributable to rising energy exports, and some non-export sectors also featured double-digit growth. 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 U.S. 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 from the agricultural sector, for example with Gulf Cooperation Council member countries, the US, and others. It is also improving the 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 implement 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.

Agriculture - products: Fruit, vegetables, grain, rice, grapes, tea, cotton, tobacco; cattle, pigs, sheep, goats

Industries: Petroleum and petroleum products, natural gas, oilfield equipment; steel, iron ore; cement; chemicals and petrochemicals; textiles