AZERBAIJAN

COUNTRY OVERVIEW

LOCATION AND SIZE.

Azerbaijan, a country of eastern Transcaucasia, is located on the western border of the Caspian Sea, between Iran and Russia. It is bounded by Russia to the north, Georgia to the northwest, Armenia to the west, Turkey to the southwest by the border of Nakhichevan, and Iran to the south. Azerbaijan has an area of 86,600 square kilometers (33,436 square miles), of which 86,100 square kilometers (33,243 square miles) is land and 500 square kilometers (193 square miles) is water. The area is slightly smaller than Maine. The total area includes the exclave (portion of the country separated from the main part) of Nakhichevan Autonomous Republic and the enclave (a distinct territorial, cultural, or social unit enclosed within foreign territory) of Nagorno-Karabakh, a region whose autonomy was abolished by the Azerbaijani Supreme Soviet on 26 November 1991. The coastline on the Caspian Sea is about 800 kilometers (497 miles). The total borderline of the country is 2,013 kilometers (1251 miles) long. The capital, Baku, is located on the Caspian Sea border and the other major cities, Ganja and Sumgait, are located to the west and just to the north of Baku, respectively.

POPULATION.

The population of Azerbaijan was estimated at 7.75 million as of 2000, an increase of 10.6 percent from the 1990 population of 7 million. The population growth rate declined from 3 percent between 1959-1970, to 1.3 percent in the late 1980s, and 0.27 percent in 2000. The population is expected to reach 8.6 million in 2010. Approximately 63 percent of the population is between the ages of 15 and 64, whereas people of ages 0-14 account for 30 percent of the population, while those of ages 65 and over account for 7 percent. The most populous city of Azerbaijan is the capital, Baku, with over 1.7 million inhabitants. As of 1999 the urban and rural population rates were 51.7 percent and 48.3 percent respectively.

The Azerbaijani population consists of different ethnic groups: Azeris are the majority with 90 percent share in the total population. The rest is made up of Dagestani (3.2 percent), Russian (2.5 percent), and Armenian (2 percent) groups.

INDUSTRY

MINING.

The main mining product of Azerbaijan is oil. At the beginning of the 20th century, Azerbaijan accounted

for nearly half of the world's total oil production. Although at the end of the century it lost this place to Middle Eastern countries, Azerbaijan is still the most geopolitically important country among the former Soviet republics, being relatively the closest to the high seas and possessing an open investment environment, which is crucial in terms of oil transportation. The State Oil Company of the Azerbaijan Republic (SOCAR) is the largest employer of the country, with 78,000 workers. The revenues from exports of oil products accounted for US$434 million in 1998, 64 percent of total exports. In addition, the expenses for imports of the oil sector accounted for US$355.7 million in 1998, or 20.6 percent of total imports.

Other mineral sources of Azerbaijan include iron, bauxite, zinc, copper, arsenic, molybdenum, marble, and fire clay. There are also small reserves of gold. Large reserves of iron and aluminum are located in the Dashkesen Mountains. Since the only buyer of the iron, Georgia, stopped purchases after the dissolution of the Soviet Union, iron production has been suspended. The mining industry is in need of modernization due to the aging technology and equipment employed in the sector.

MANUFACTURING.

Oil equipment manufacturing and related sectors such as instrument-making, electrical engineering, and radio electronics sectors produce almost 20 percent of the total manufacturing sector. The government considers the oil engineering sector of strategic importance and the sector is not included in privatization plans. After independence, the manufacturing sector experienced a decrease in non-oil-related production. The majority of heavy industry is located in Sumgait, just north of Baku. However, much of this capacity is declining, due to a lack of government incentives, foreign capital, and infrastructure. Other important sectors include textile, food, and beverages. However, these sectors, too, have experienced a sharp decline and lost their competitiveness against imported goods for the same reasons.

CONSTRUCTION.

The share of construction in total GDP increased from 8.1 percent in 1990 to 9.4 percent in 1999. Construction work related to the oil industry accelerated after 1995. Turkish companies are also active in the construction of homes and businesses.

SERVICES

BANKING.

The Azerbaijan National Bank (ANB), responsible for monetary policy and the supervision of the financial sector, was established in 1992 and privatized in 1995. There are many commercial banks, but most of them are small and undercapitalized. After a consolidation in the number of the banks, as of July 2000, Azerbaijan had 66 commercial banks, the central bank, the state-managed International Bank of Azerbaijan, and the United State Industrial Bank. The ANB informally protects the state-owned banks from foreign competition by allowing only 30 percent of capital to be foreign-owned in the national banking system.

DEPENDENCIES

Azerbaijan has no territories or colonies.

BIBLIOGRAPHY

Economist Intelligence Unit. Country Profile: Azerbaijan, 2000. London: Economist Intelligence Unit, 2000.

"National Food Security Information System (Summary Report)." European Commission Food Security Network. <http://www.resal.org/geo/nei/index> . Accessed February 2001.

Population Reference Bureau. <http://www.prb.org/pubs/wpds99/wpds99_asia.htm> . Accessed January 2001.

U.S. Central Intelligence Agency. World Facbook 2000. <http://www.odci.gov/cia/publications/factbook> . Accessed July 2001.

U.S. Department of State. FY 2000 Country Commercial Guide Azerbaijan. <http://www.state.gov/www/about_state/business/com_guides/2000/europe/index.html> . Accessed July 2001.

World Bank Poverty Monitoring Database. <http://wbln0018.worldbank.org/dg/povertys.nsf> . Accessed January 2001.

—Yüksel Sezgin

CAPITAL:

Baku.

MONETARY UNIT:

Manat. One manat equals 100 gopiks; however, there are no gopiks in circulation due to inflation in the early 1990s. The currency comes in denominations of 50, 100, 250, 500, 1,000, 10,000, 50,000, and 100,000. Some coins may still be found of 10, 20 and 50 gopik.

CHIEF EXPORTS:

Oil, gas, machinery, cotton and foodstuffs.

CHIEF IMPORTS:

Machinery and equipment, foodstuffs, metals and chemicals.

GROSS DOMESTIC PRODUCT:

US$14 billion (purchasing power parity, 1999 est.).

BALANCE OF TRADE:

Exports: US$885 million (1999 est.). Imports: US$1.62 billion (1999 est.).