Republic of Azerbaijan / Azərbaycan Respublikası (Azerbaijani)

Azerbaijan – a secular 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 remains involved in the protracted Nagorno-Karabakh conflict with Armenia. Nagorno-Karabakh was a primarily ethnic Armenian region that Moscow recognized in 1923 as an autonomous oblast within Soviet Azerbaijan. In the late Soviet period, a separatist movement developed which sought to end Azerbaijani control over the region. Fighting over Nagorno-Karabakh began in 1988 and escalated after Armenia and Azerbaijan attained independence from the Soviet Union in 1991. By the time a ceasefire took effect in May 1994, separatists, with Armenian support, controlled Nagorno‑Karabakh and seven surrounding Azerbaijani territories. The 1994 ceasefire continues to hold, although violence continues along the line of contact separating the opposing forces, as well as the Azerbaijan-Armenia international border. The final status of Nagorno-Karabakh remains the subject of international mediation by the Organization for Security and Cooperation in Europe (OSCE) Minsk Group, which works to help the sides settle the conflict peacefully. The OSCE Minsk Group is co‑chaired by the United States, France, and Russia.

In the 25 years following its independence, Azerbaijan succeeded in significantly reducing the poverty rate and has directed revenues from its oil and gas production to develop the country’s infrastructure. However, corruption remains a problem, and the government has been accused of authoritarianism. The country’s leadership has remained in the Aliyev family since Heydar ALIYEV became president in 1993 and was succeeded by his son, President Ilham ALIYEV in 2003. Following two national referendums in the past several years that eliminated presidential term limits and extended presidential terms from 5 to 7 years, President ALIYEV secured a fourth term as president in April 2018 in an election that international observers noted had serious shortcomings. Reforms are underway to diversify the country’s non-oil economy and additional reforms are needed to address weaknesses in government institutions, particularly in the education and health sectors, and the court system.

Creative Industries Azerbaijan


Population:
10,205,810 (July 2020 est.)
10,046,516 (2018)
Capital: Bakou
Internet country code: .az

Government:
Official website: en.president.az
Ministry of Economy: economy.gov.az
Azerbaijan Tourism Board: tourismboard.az

Azerbaijan flagFlag description:
three equal horizontal bands of blue (top), red, and green; a crescent and eight-pointed star in white are centered in the red band; the blue band recalls Azerbaijan’s Turkic heritage, red stands for modernization and progress, and green refers to Islam; the crescent moon is an Islamic symbol, while the eight-pointed star represents the eight Turkic peoples of the world

Developing cultural and creative industries in Azerbaijan

The Cultural and Creative Industries (CCIs) have been recognised by the EU and
integrated into its policy documents and programmes for more than a decade. This
report provides a bird’s-eye view of the cultural and creative industries sector in the
six countries of the EU-Eastern Partnership: Armenia, Azerbaijan, Belarus, Georgia,
Moldova and Ukraine, but most importantly, it provides country-specific view on
challenges and tailored recommendations for CCIs in Azerbaijan.
PDF > creative.az/Creative-Industries-Report-for-Azerbaijan.pdf


Economy

Prior to the decline in global oil prices since 2014, Azerbaijan’s high economic growth was attributable to rising energy exports and to some non-export sectors. 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 US 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 in the agricultural sector – with Gulf Cooperation Council member countries, the US, and others. It is also improving 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 develop 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.