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Azerbaijan - a 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 has yet to resolve its conflict with Armenia over Nagorno-Karabakh, a primarily ethnic Armenian-populated region that Moscow recognized in 1923 as an autonomous republic within Soviet Azerbaijan after Armenia and Azerbaijan disputed the territory's status. Armenia and Azerbaijan reignited their dispute over the area in 1988; the struggle escalated militarily after both countries attained independence from the Soviet Union in 1991. By May 1994, when a cease-fire took hold, ethnic Armenian forces held not only Nagorno-Karabakh but also seven surrounding provinces in the territory of Azerbaijan. The OSCE Minsk Group, co-chaired by the US, France, and Russia, is the framework established to mediate a peaceful resolution of the conflict.


Southwestern Asia, bordering the Caspian Sea, between Iran and Russia, with a small European portion north of the Caucasus range

Natural Resources

petroleum, natural gas, iron ore, nonferrous metals, bauxite

Population - distribution

highest population density is found in the far eastern area of the county, in and around Baku; apart from smaller urbanized areas, the rest of the country has a fairly light and evenly distributed population

Azerbaijani (Azeri) (official) 92.5%, Russian 1.4%, Armenian 1.4%, other 4.7% (2009 est.)
BAKU (capital) 2.374 million (2015)
Conventional long form
Republic of Azerbaijan
Conventional short form
Local long form
Azarbaycan Respublikasi
Local short form
presidential republic
Geographic coordinates
40 23 N, 49 52 E
Time difference
UTC+4 (9 hours ahead of Washington, DC, during Standard Time)
has not submitted an ICJ jurisdiction declaration; non-party state to the ICCt
Prior to the decline in the global oil prices since 2014, Azerbaijan's high economic growth was attributable to rising energy exports, and some non-export sectors also featured double-digit growth. 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 between Azerbaijan and Europe will open up another source of revenue from gas exports. Declining oil prices caused a 3.8% contraction in GDP in 2016, reinforced by a sharp reduction in the construction sector. The economic decline has been accompanied by higher inflation and a weakened banking sector in the aftermath of the two sharp currency devaluations in 2015.
External debt stocks
US$ 13,215,285,000
Total tax rate (% of commercial profits)
Real Interest Rate
Manufacturing, value added (% of GDP)
Current Account Balance
US$ -1,363,404,000
Labor Force, Total
Employment in Agriculture
Employment in Industry
Employment in Services
Unemployment Rate
Imports of goods and services
US$ 16,529,046,813
Exports of goods and services
US$ 17,580,998,935
Total Merchandise Trade
FDI, net inflows
US$ 4,499,666,000
Commercial Service Exports
US$ 4,340,954,000
fruit, vegetables, grain, rice, grapes, tea, cotton, tobacco; cattle, pigs, sheep, goats
petroleum and petroleum products, natural gas, oilfield equipment; steel, iron ore; cement; chemicals and petrochemicals; textiles
oil and gas roughly 90%, machinery, foodstuffs, cotton
Italy 19.7%, Germany 10.7%, France 7.5%, Israel 7%, Czech Republic 4.8%, Indonesia 4.2% (2015)
machinery and equipment, foodstuffs, metals, chemicals
Russia 15.6%, Turkey 12.7%, US 9.2%, Germany 7.5%, Italy 6.4%, Japan 6.1%, UK 6%, China 5.6% (2015)
Country Risk Rating
A very uncertain political and economic outlook and a business environment with many troublesome weaknesses can have a significant impact on corporate payment behavior. Corporate default probability is high.
Business Climate Rating
The business environment is difficult. Corporate financial information is often unavailable and when available often unreliable. Debt collection is unpredictable. The institutional framework has many troublesome weaknesses. Intercompany transactions run major risks in the difficult environments rated C.
  • Abundant hydrocarbon resources (above all gas)
  • Development of new energy transit routes to the EU
  • Skilled labor force
  • Inadequate economic diversification
  • Risk of armed conflict with Armenia
  • Governance problems and high level of corruption

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