Republic of Azerbaijan

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Economic and political outline

Economic indicators | Foreign Trade in figures | Sources of general economic information | Political outline

Economic indicators

Azerbaijan is an economy in transition where the State continues to play a dominant role. It has substantial oil reserves and a significant agronomic potential. With the help of IMF, Azerbaijan has been pursuing a successful economic stabilization program since the late 1990s, resulting in a GDP growth rate of more than 10% since 2000. It even reached 35.1% in 2006 and 29.3% in 2007, mainly due to rise in global oil prices. IMF forecasts a GDP growth rate of 23.2% in 2008. However, the major challenges faced by the country are: high inflation (16,6% in 2007), high degree of poverty (nearly 45% of the population still lives below the poverty line), and its over-dependence on the oil sector.

Main indicators	2006	2007	2008	2009	2010
GDP (billions USD)	21.03	31.29	46.38	37.94e	46.95
GDP (constant prices, annual % change)	30.6	23.4	11.6e	2.5	12.3
GDP per capita (USD)	2,464	3,638e	5,349e	4,342e	5,329e
Inflation rate (%)	8.4	16.6	20.8	4.0e	7.0e
Current Account (billions USD)	3.71	9.02	16.45	4.11	8.64
Current Account (in % of GDP)	17.6	28.8	35.5e	10.8	18.4

Source: IMF - World Economic Outlook Database ; CIA - The world factbook

Note: (e) Estimated data

Main sectors of industry

The agricultural sector contributes nearly 12% to the GDP, but due to lack of modernization the productivity remains low. The main food crops are wheat, barley, corn, wine grapes, and potatoes and the important industrial crops are cotton, silk, and tobacco. Azerbaijan has 0.7% of the world's oil reserves – hence this sector attracts heavy foreign investments. The Apsheron peninsula is one of the richest oil regions of the world. However, Azerbaijan wants to diversify its economy and is encouraging investments in other industrial sectors like machinery, chemical products, cement, iron & steel, and textiles. The widespread salt springs in the country is giving rise to flourishing health resorts. The old craft of carpet weaving is still practiced. The services sector contributes nearly one-third to the GDP.

Breakdown of economic activity by sector	Agriculture	Industry	Services
Employment by sector (in % of total employment)	39.3	12.1	48.6
Value added (in % of GDP)	6.3	72.8	21.0
Value added (annual % change)	11.3	29.6	31.5

- last available data.

Monetary indicators	2004	2005	2006	2007	2008
Azerbaijanian New Manat (AZN) - Average annual exchange rate for 1 USD	0.98	0.95	0.89	0.86	0.82

Source: World Bank - World Development Indicators

Indicator of economic freedom

Score:: 58/100
Position:: mostly unfree
World Rank:: 99 out of 179
Regional Rank:: 17 out of 42

Distribution of Economic freedom in the world
Source: 2008 Index of Economic freedom, Heritage Foundation

Country risk

See the country risk analysis provided by Ducroire.

Foreign trade in figures

The foreign trade of the Republic of Azerbaijan depends a lot on the countries of the ex-Soviet block: Russia and Georgia are its principal partners. Germany, Italy and China are becoming more and more important in the trade relations of Azerbaijan.

Foreign trade indicators	2003	2004	2005	2006	2007
Imports of goods (millions USD)	2,723	3,582	4,350	5,269	6,045
Exports of goods (millions USD)	2,625	3,743	7,649	13,015	21,269
Imports of services (millions USD)	2,047	2,730	2,653	2,863	3,379
Exports of services (millions USD)	432	492	683	940	1,248
Imports of goods and services (annual % change)	42.2	23.8	10.9	14.3	14.0
Exports of goods and services (annual % change)	0.5	11.7	48.9	40.9	43.3
Imports of goods and services (in % of GDP)	65.6	72.7	52.9	38.8	30.2
Exports of goods and services (in % of GDP)	42.0	48.8	62.9	66.5	72.1
Trade Balance (millions USD)	-98	161	3,299	7,745	15,224
Trade Balance (including service) (millions USD)	-1,713	-2,077	1,329	5,822	13,093
Foreign trade (in % of GDP)	107.6	121.5	115.8	105.3	102.2

Source: World Bank

Main partner countries

Main customers (% of exports)	2008
Italy	40.2%
United States	12.6%
Israel	7.6%
India	5.1%
France	4.9%
Spain	3.1%
Indonesia	3.0%
Netherlands	2.8%
Chile	2.0%
United Kingdom	1.9%
South Korea	1.5%
Turkey	1.3%
Russia	1.2%
Canada	1.2%
Croatia	1.1%
China	1.0%
Georgia	1.0%
Iran	0.7%
Greece	0.6%
Kazakhstan	0.6%
See more countries	29.7%

Main suppliers (% of imports)	2008
Russia	18.8%
Turkey	11.3%
Germany	8.4%
Ukraine	7.9%
China	6.7%
United Kingdom	5.4%
United States	3.7%
Finland	3.4%
Japan	3.4%
Kazakhstan	2.8%
Italy	2.6%
South Korea	2.3%
France	1.9%
India	1.5%
Iran	1.4%
Brazil	1.3%
Belarus	1.3%
Switzerland	1.1%
Netherlands	1.1%
Israel	1.1%
See more countries	46.9%

Source: Comtrade

Main products

Main exports (% of exports)	2008
Mineral fuels, mineral oils and products of their...Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes	97.1%
Articles of iron or steelArticles of iron or steel	0.4%
Edible fruit and nuts; peel of citrus fruits or...Edible fruit and nuts; peel of citrus fruits or melons	0.3%
Ships, boats and floating structuresShips, boats and floating structures	0.3%
Animal or vegetable fats and oils and their...Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes	0.3%
Plastics and articles thereofPlastics and articles thereof	0.3%
Aluminium and articles thereofAluminium and articles thereof	0.3%
Sugars and sugar confectionerySugars and sugar confectionery	0.2%
Edible vegetables and certain roots and tubersEdible vegetables and certain roots and tubers	0.1%
Inorganic chemicals; organic or inorganic...Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes	0.1%
Iron and steelIron and steel	0.1%
See more products	1.7%

Main imports (% of imports)	2008
Nuclear reactors, boilers, machinery and...Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof	22.4%
Vehicles other than railway or tramway...Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof	13.6%
Electrical machinery and equipment and parts...Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles	8.3%
Articles of iron or steelArticles of iron or steel	6.6%
CerealsCereals	5.7%
Tobacco and manufactured tobacco substitutesTobacco and manufactured tobacco substitutes	2.8%
Plastics and articles thereofPlastics and articles thereof	2.7%
Iron and steelIron and steel	2.7%
Optical, photographic, cinematographic, measuring,...Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof	2.7%
Salt; sulphur; earths and stone; plastering...Salt; sulphur; earths and stone; plastering materials, lime and cement	1.8%
Ships, boats and floating structuresShips, boats and floating structures	1.7%
Sugars and sugar confectionerySugars and sugar confectionery	1.7%
Mineral fuels, mineral oils and products of their...Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes	1.6%
Pharmaceutical productsPharmaceutical products	1.5%
Furniture; bedding, mattresses, mattress supports,...Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishings; lamps and lighting fittings, not elsewhere specified or included; illuminated signs, illuminated name-plates and the like; prefabricated buildings	1.4%
Ores, slag and ashOres, slag and ash	1.3%
Wood and articles of wood; wood charcoalWood and articles of wood; wood charcoal	1.2%
Paper and paperboard; articles of paper pulp, of...Paper and paperboard; articles of paper pulp, of paper or of paperboard	1.1%
Glass and glasswareGlass and glassware	1.1%
Aircraft, spacecraft, and parts thereofAircraft, spacecraft, and parts thereof	1.0%
Animal or vegetable fats and oils and their...Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes	1.0%
FertilizersFertilizers	0.9%
Articles of stone, plaster, cement, asbestos, mica...Articles of stone, plaster, cement, asbestos, mica or similar materials	0.8%
Products of the milling industry; malt; starches;...Products of the milling industry; malt; starches; inulin; wheat gluten	0.8%
Miscellaneous chemical productsMiscellaneous chemical products	0.8%
Soap, organic surface-active agents, washing...Soap, organic surface-active agents, washing preparations, lubricating preparations, artificial waxes, prepared waxes, polishing or scouring preparations, candles and similar articles, modelling pastes, 'dental waxes' and dental preparations with a basis of plaster	0.8%
Printed books, newspapers, pictures and other...Printed books, newspapers, pictures and other products of the printing industry; manuscripts, typescripts and plans	0.7%
Rubber and articles thereofRubber and articles thereof	0.6%
Inorganic chemicals; organic or inorganic...Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes	0.6%
Tools, implements, cutlery, spoons and forks, of...Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal	0.6%
Organic chemicalsOrganic chemicals	0.6%
Essential oils and resinoids; perfumery, cosmetic...Essential oils and resinoids; perfumery, cosmetic or toilet preparations	0.5%
Ceramic productsCeramic products	0.5%
Railway or tramway locomotives, rolling-stock and...Railway or tramway locomotives, rolling-stock and parts thereof; railway or tramway track fixtures and fittings and parts thereof; mechanical (including electro-mechanical) traffic signalling equipment of all kinds	0.5%
Beverages, spirits and vinegarBeverages, spirits and vinegar	0.4%
Cocoa and cocoa preparationsCocoa and cocoa preparations	0.4%
Aluminium and articles thereofAluminium and articles thereof	0.4%
Preparations of cereals, flour, starch or milk;...Preparations of cereals, flour, starch or milk; pastrycooks' products	0.4%
Dairy produce; birds' eggs; natural honey; edible...Dairy produce; birds' eggs; natural honey; edible products of animal origin, not elsewhere specified or included	0.4%
Miscellaneous edible preparationsMiscellaneous edible preparations	0.3%
Articles of apparel and clothing accessories, not...Articles of apparel and clothing accessories, not knitted or crocheted	0.3%
Preparations of vegetables, fruit, nuts or other...Preparations of vegetables, fruit, nuts or other parts of plants	0.3%
Residues and waste from the food industries;...Residues and waste from the food industries; prepared animal fodder	0.3%
Meat and edible meat offalMeat and edible meat offal	0.3%
Tanning or dyeing extracts; tannins and their...Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks	0.2%
Coffee, tea, maté and spicesCoffee, tea, maté and spices	0.2%
Miscellaneous articles of base metalMiscellaneous articles of base metal	0.2%
Preparations of meat, of fish or of crustaceans,...Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates	0.2%
Edible fruit and nuts; peel of citrus fruits or...Edible fruit and nuts; peel of citrus fruits or melons	0.2%
Edible vegetables and certain roots and tubersEdible vegetables and certain roots and tubers	0.1%
Footwear, gaiters and the like; parts of such...Footwear, gaiters and the like; parts of such articles	0.1%
Impregnated, coated, covered or laminated textile...Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use	0.1%
Other made-up textile articles; sets; worn...Other made-up textile articles; sets; worn clothing and worn textile articles; rags	0.1%
See more products	43.3%

Source: Comtrade

See more products: More imports (Intracen Data)
More exports (Intracen Data)

Sources of general economic information

Ministries: Ministry of Economic Development of Azerbaijan
Statistical Office: The State Statistical Committee of the Republic of Azerbaijan
Central Bank: The National Bank of Azerbaijan
Stock Exchange: Baku Stock Exchange
Search Engines: Search AZ
Azerbaïjan Internet links
Azerbaïjan International
Economic portals: The Azerbaijani Economist
Business Information Service for the Newly Independant States

Political outline

Executive Power: The President is the chief of the state and is elected by popular vote for a five-year term. He holds the executive powers. The President appoints the Prime minister (who is the head of the government) and the Council of Ministers, who have to be confirmed by the National Assembly.
Legislative Power: The legislature is unicameral in Azerbaijan. The parliament called the National Assembly has 125 seats with its members being elected by popular vote to serve five-year terms. However, the National Assembly has historically been a weak body with little real influence. Azerbaijan has a strong presidential system in which the legislative and judicial branches have only limited independence. The people of Azerbaijan have very limited political rights.
Main political parties: The main political parties are: NAP (New Azerbaijan Party), CPA (Communist Party of Azerbaijan), PFP (Popular Front Party), CSP (Civic Solidarity Party), SDP ( Social Democratic Party of Azerbaijan). Opposition parties in Azerbaijan regularly factionalize and form new parties.
Current political leaders: President: Ilham ALIYEV (since October 2003, took over from his father) -NAP
Prime Minister: Artur RASIZADE (since November 2003) -NAP
Next election dates: Presidential: October 2008
National Assembly: November 2010

Indicator of freedom of the press

World Rank:: 150/173
Evolution:: 11 places down compared to 2007

Source: Worldwide Press Freedom Index 2007, Reporters Without Borders

Indicator of political freedom

Ranking:: Not Free
Political freedom:: 6/7
Civil liberties:: 5/7

Map of freedom 2007
Source: Freedom House

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