Azerbaijan

The Azerbaijan Republic (Azarbaycan Respublikasi or Azerbaijan) is the largest of the three Transcaucasian republics of the former Soviet Union, located in southwestern Asia. Bordered by the Caspian Sea to the east, Iran to the south, Armenia (and nine kilometers of Turkey) to the west, Georgia to the northwest, and Dagestan of the Russian Federation to the north, Azerbaijan measures 86,600 square kilometers. Slightly smaller than the U.S. state of Maine, Azerbaijan includes the non-contiguous autonomous enclave of Naxçivan to its southwest as well as 500 square kilometers of water. About 20 percent of the country, including the Nagorno-Karabakh region in the southwest, is occupied by Armenian forces who came into violent conflict with Azerbaijanis starting in 1988.

While a cease-fire was declared in May 1994, the final peace settlement with Armenia had not yet been reached by early 2001 and hundreds of thousands of Azerbaijani citizens were still displaced from their home communities. In 1998 the total number of Azerbaijani refugees and internally displaced persons (IDPs) living within Azerbaijan was about one million; the refugees included about 230,000 Azerbaijanis who fled Armenia when the armed conflict began and 50,000 Meshetian Turks who fled from Uzbekistan in 1989. The IDPs are primarily from Nagorno-Karabakh, an internationally recognized part of Azerbaijan occupied by Armenian troops and separatist fighters since the early 1990s. In 1998 13 major refugee camps existed in Azerbaijan; in addition, numerous, overcrowded public buildings, many of them in almost complete disrepair, housed Azerbaijani refugees. (About 300,000 Armenians who previously lived in Baku and other Azerbaijani cities are now living outside of Azerbaijan due to the unresolved conflict.) Certain European nations and international organizations, like the Organization for Security and Cooperation in Europe (OSCE), have worked steadily to help Azerbaijan settle its conflict with Armenia, but with incomplete success.

Azerbaijan has often been the battleground for contesting forces over the centuries. Three centuries before Christ the land now occupied by Azerbaijan was ruled by the Sassanid dynasty of the Persian Empire. During the Middle Ages the land was divided into several khanates that eventually were united by Shah Ismayil, the founder of the Safevid dynasty. Two-thirds of what used to be known as Azerbaijan in historic times is now in present-day Iran, and 20 million or more Azeris now live in Iran's northern region. Over the centuries Azerbaijan's territory was the object of fighting by the Persian, Arab, Seljuk, Mongol, Ottomon, and Russian empires. The territory that currently is Azerbaijan came from areas relinquished by Persia to Russia in 1828.

Annexed to the fledgling Soviet Union when the "Red Army" invaded the Caucasus region in April 1920, Azerbaijan remained under communist rule for 70 years as part of the Transcaucasian Soviet Federative Republic, which also included Georgia and Armenia. Azerbaijan declared its independence from the Soviet Union on 30 August 1991; soon after, it was recognized by the international community as an independent country. Azerbaijan joined the UN Organization and OSCE in 1992. It also became a member of NATO's "Partnership for Peace" programs, one of the first of the former Soviet republics to join.

A land consisting mainly of mountains and valleys due to the Caucasus Mountains passing through the north of the country, Azerbaijan has a wide range of climates, ranging from the cold weather of the mountainous north to the temperate weather of the Kura River's plain and the subtropical climate of the Lenkoran lowlands along the Caspian coast. The country's average temperature is 27 degrees Celsius in July and 1 degree Celsius in January. Baku, the capital city, has more days of fair weather than any other place in the Caucasus. It is moderately warm, subtropical, and dry but quite windy throughout the year. The highest elevation in Azerbaijan is Bazarduzu Dagi at 4,485 meters.

In 2000 the ethnic composition of Azerbaijan's population was about 90 percent Azeri, 3.2 percent Dagestani, 2.5 percent Russian, 2.3 percent Armenian, and 2 percent other, with most of the Armenians living in the Nagorno-Karabakh region. At that time about 93 percent of Azerbaijan's population was Muslim (mainly Shiite); the rest of the population was Russian Orthodox or Armenian Orthodox (each about 2.3 percent) or other. Approximately 57 percent of Azerbaijan's population lived in urban areas in 1999 when the country's population density was 92.2 persons per square kilometer. By the year 2000 approximately 99 percent of Azerbaijan's male population age 15 and older was literate, as well as 96 percent of the female population in that age range.

In 1999 the population of Azerbaijan was estimated to be 8 million and had a growth rate of only 0.9 percent, in part because difficult economic conditions in the 1990s caused many young Azerbaijanis to delay starting their own families. The total fertility rate in 1999 was 2.0 (i.e., a woman bearing children for her entire childbearing years at the current fertility rate would produce two children). Approximately 30 percent of Azerbaijanis in 2000 were 14 years old or younger while nearly two-thirds of the population was between 15 and 64 years of age and only about 7 percent were 65 or older. Azerbaijan had an infant mortality rate of 16.2 per thousand live births in 1999 and an under 5 years child mortality rate of 21.0 per thousand. The life expectancy at birth of Azerbaijanis in 2000 was 62.9 years, 58.5 years for men and 67.5 years for women.

World Bank analysts noted the degree of poverty in Azerbaijan in their November 2000 Country Assistance Report for the country and remarked on the changes that had occurred during the 1990s: "Azerbaijan had strong social indicators before independence. Basic food and consumer needs were met and access to health and education was universal. Since independence [in 1991], however, social indicators have deteriorated, partly because of the large number of displaced people. About 60 percent of Azerbaijan's population are considered poor, compared with around 40 percent in other Central Asian countries."

The Gross Domestic Product (GDP) at market prices in 1999 was four billion in current U.S. dollars. Widespread corruption and patronage had interfered with the transition to a well-functioning, free-market economy in Azerbaijan in the transition period of the 1990s. The Azerbaijani workforce in 1997 was composed as follows: 15 percent of the labor force was employed in industry, 53 percent in service jobs, and 32 percent in agriculture and forestry. (The comparable figures for the value added by each sector expressed as a percent of GDP were the following: industry, 35.4 percent; service, 41.3 percent; and agriculture, 23.3 percent.) By 1999 the Azerbaijani economy had an annual growth rate of roughly 7.4 percent, which further improved to an annual rate of about 8.5 percent by the first 6 months of 2000. However, Azerbaijan's annual per-capita income (measured as GNP per capita) in 2000 was about $550 in current U.S. dollars, representing a significant drop in per-capita income since the early 1990s. Azerbaijan's poverty rate of 60 percent at the turn of the millennium was due in large measure to the effects of the government's attempts to shift the economy from a centralized, state-controlled economy to a free-market economy; to falling oil revenues in the early 1990s; and to the war with Armenia, which had produced streams of refugees and thousands of displaced persons in the country. As the World Bank analysts noted in November 2000, about 75 percent of the IDPs were living below the poverty level. In 1999 about 20 percent of the population in Azerbaijan was classified as very poor. Sparked mainly by the richly promising oil opportunities in the country, foreign direct investment in Azerbaijan in 1999 was $510.3 million in U.S. dollars, while the country's debt value was $744.3 million. About 70 percent of the export commodities in the year 2000 were oil and gas. Other natural resources in Azerbaijan include iron ore, nonferrous metals, and alumina. The primary agricultural products are grains, wine, cotton, fruit, vegetables, tea, tobacco, crude sheepskin, and livestock (cattle, pigs, sheep, and goats), but only 18 percent of the land is arable.

Azerbaijan joined the World Bank and the International Development Association in 1992 and received its first loan from the Bank in 1995 for financing advisory services and setting up a framework to attract foreign private investment in Azerbaijan's burgeoning petroleum industry, in the amount of $21 million in U.S. dollars. A credit of the same amount also was provided that year to improve the water supply in the capital city of Baku, where about 25 percent of Azerbaijanis live. Other World Bank projects have followed, including an Educational Reform Project developed for Azerbaijan in 1999.

In 1997 Azerbaijanis had about 170,000 televisions and 175,000 radios. In 1998 10 AM radio stations, 17 FM stations, and 1 short-wave radio station broadcast programs in Azerbaijan. Computer and Internet access was growing by the end of the 1990s, when Azerbaijan had two Internet service providers.