Country Profile: Azerbaijan

Story highlights

  • Azerbaijan is a small nation that achieved independence from the USSR in 1991
  • The country hugs the shores of the Caspian Sea and sits upon vast oil and gas deposits.
  • Azerbaijan's economy has grown rapidly in recent years.

Azerbaijan is an oil and gas rich nation that hugs the western shore of the Caspian Sea.

Bordering Iran, Georgia, Russia and Armenia, it has a population of 8.3 million people, according to the CIA World Factbook.

Roughly a quarter of the country's residents live in the capital, Baku, a cosmopolitan urban center that combines ultra-modern skyscrapers with a historic Walled City that is recognized by UNESCO as a World Heritage Site.

Islam is the most prominent religion in Azerbaijan although according the country's government there are also minority Jewish and Orthodox Christian communities.

Azerbaijan gained formal independence from the former USSR in 1991 after initially declaring its national sovereignty in 1988. Since then it has been locked in a territorial dispute with ethnic Armenian separatists.

Energy jewel of the Caspian
Energy jewel of the Caspian


    Energy jewel of the Caspian


Energy jewel of the Caspian 03:58

A six year conflict from 1988 to 1994 saw the separatists -- backed by troops from Armenia -- and Azerbaijani forces fight over the Nagorno-Karabakh and Nakichevan regions in the Southwest of the country.

Chess: The national sport of Azerbaijan
Chess: The national sport of Azerbaijan


    Chess: The national sport of Azerbaijan


Chess: The national sport of Azerbaijan 02:24

A ceasefire was agreed in 1994 but by then the separatists, who are seeking full independence from Azerbaijan, had taken control of Nagorno-Karabakh and seven surrounding provinces.

Caviar capital under threat
Caviar capital under threat


    Caviar capital under threat


Caviar capital under threat 03:22

Azerbaijan still claims sovereignty over these areas but has tried to resolve the issue via diplomatic means in the period since, according to the British Foreign and Commonwealth Office.

Much of Azerbaijan's history has revolved around its vast oil and gas reserves.

The ancient fire worshiping civilization, the Zoroastrians, erected temples in the vicinity of burning gas vents at various sites across the country as far back as the third century, according to the country's tourist board.

These temples are now popular tourist attractions with one of the most well preserved situated in Surakhani on the outskirts of Baku.

At the beginning of the 20th century however Azerbaijani's landed on a new use for their bountiful natural resources -- industrial fuel.

Vast sums of money poured into the country to fund oil exploration and at one stage it was one of the world's major oil centers.

Nowadays, Azerbaijan has a major role in oil exporting and is a major shareholder in an oil pipeline that runs from the Caspian Sea all the way to Ceyhan in Turkey.

In recent years Azerbaijan has attempted to diversify its economy and reduce its dependence on its natural resources.

The country has developed successful construction, banking, retail and real estate sectors, although these have been hit by the global financial downturn.

Economic growth reached double digit figures between 2006 and 2008 before sliding back to 3.7% in 2010, according to the CIA World Factbook.

Like many emerging market economies experiencing rapid growth and with access to vast natural resources, Azerbaijan has been impacted by corruption.

Transparency International ranked the country 134th out of 178 countries in its Corruption Perceptions Index 2010, although the Azerbaijani government maintains it is attempting to eradicate graft. The World Bank named the country as one of the world's fastest reforming nations in its 2009 "Doing Business" report as a result of these efforts.

Criticism of corruption within the country is mirrored by international concerns about Azerbaijan's commitment to democratic principles.

Current president, Ilham Aliyev, came to power in 2003 taking over from his father, Heydar Aliyev, who had ruled the country since 1993.

Although President Ilham Aliyev secured a landslide electoral victory, international observers criticized the fairness of the vote.

The Organization for Security and Cooperation in Europe (OSCE) cited numerous cases of voter intimidation, unequal conditions for electoral candidates and serious flaws with the counting of votes.

Subsequent elections in 2005, 2008 and 2010 have also been criticized for falling below expected democratic standards by the OSCE and the U.S. State Department. The government has denied electoral abuses and insisted that democracy will be upheld in the country.

Despite being on the receiving end of foreign condemnation with regards its political processes, Azerbaijan has managed to build closer ties with regional and international partners in recent years.

The country joined the Council of Europe in 2001 -- which aims to develop a common legal and democratic area across the continent -- and works in conjunction with a consortium of western oil companies to extract its abundant natural resources. It is also working towards legal and regulatory reforms that would enable accession to the World Trade Organization, according to the U.S Department of State.

In October 2011 Azerbaijan was awarded one of the six non-permanent seats on the U.N. Security Council. From January 2012, the country will sit alongside permanent members of the Security Council -- France, China, Russia, the U.K. and the U.S. -- for a period of two years.

Culturally, Azerbaijan has also looked to raise its profile internationally. In 2011, the country won the Eurovision Song Contest, a continent-wide musical competition.

As a result of this success, Azerbaijan will host the next Eurovision event which has been scheduled to take place in Baku in May, 2012.

The country's state broadcaster that is hosting the event has said it will give Azerbaijan the opportunity to further display its culture and traditions to the whole of Europe.

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