AZERBAIJAN

After two wars between the Persian and Russian empires, Azerbaijan was annexed to Russia by the Gulistan Treaty in 1813. During the First World War, the Russian empire collapsed and Azerbaijan declared its independence, establishing the Democratic Republic of Azerbaijan. The first Muslim Republic in the world only lasted 2 years, from 1918 till 1920, when the Red Army invaded it. As a consequence, Azerbaijan was incorporated to the USSR. It became independent again after fall of the USSR. in 1991. In spite of a cease of fire since 1994, Azerbaijan still has remaining issues with Armenia because of the Nagorno-Karabakh region. Azerbaijan has lost control over 16% of its territory, including Karabakh, and has to sustain near than 800 thousand refugees as a consequence of this conflict.

Azerbaijan has a transitional economy, in which the State still has a major role. It has important oil reservoirs and a great agriculturalist potential due to its variety of climates. Since 1995 with cooperation of the IMF, Azerbaijan has successfully achieved an economy stabilization program, lowering the inflation to less than 1.8% (1,800% in 1994).

The economic reforms have obtained a macroeconomic stabilization, though the inefficiency of the public administration has supposed a hindrance. The privatization of the agricultural lands and of the small and medium companies has been completed. In August 2000 the government stimulated the second privatizing program focused on the big state companies.

Over a century the economy of the country has been based on oil. Now the multinational western companies are qualified for the exploitation of deposits that the Soviet technology was unable to reach. The reserves are situated in the Caspian Sea, with a volume comparable to the Northern Sea reserves, sharing the sovereignty of these waters with Russia, Kazakhstan and Turkmenistan.

A pipeline that will transport the oil of the Caspian Sea to the Mediterranean from Baku across Tbilisi, (Georgia) to Ceyhan in Turkey has been projected. In March, 2001, Azerbaijan signed an agreement with Turkey to sell them oil.

Fhotos: Google Images

Texts: Based on Wikipedia