Azerbaijan

Azerbaijan - a nation with a Turkic and majority-Muslim population - was briefly independent from 1918 to 1920; it regained its independence after the collapse of the Soviet Union in 1991. Despite a 1994 cease-fire, Azerbaijan has yet to resolve its conflict with Armenia over the Azerbaijani Nagorno-Karabakh enclave (largely Armenian populated). Azerbaijan has lost 16% of its territory and must support some 600,000 internally displaced persons as a result of the conflict. Corruption is ubiquitous, and the promise of widespread wealth from Azerbaijan's undeveloped petroleum resources remains largely unfulfilled.

Main Airports

Baku Bina (BAK)

U.S. Embassy

83 Azadliq Prospect
tel: 994-12-98-03-35

Statistics

GDP: purchasing power parity:

$37.92 billion (2005 est.)

GDP - real growth rate:

26.4% (2005 est.)

GDP - per capita: purchasing power parity:

4,800 (2005 est.)

Inflation rate (consumer prices):

9.6% (2005 est.)

Labor force:

5.45 million (2005 est.)

Exports:

$6.117 billion f.o.b. (2005 est.)

Exports - partners:

Italy 29.1%, Czech Republic 14.3%, France 12%, Germany 9.5%, Russia 5%, Romania 4.5%, Georgia 4.4% (2005)

Imports:

$4.656 billion f.o.b. (2005 est.)

Imports - partners:

Russia 18.9%, Germany 12.1%, UK 8.5%, Turkey 7.4%, Ukraine 6.4%, Netherlands 5.3%, China 5.2%, France 4.1% (2005)

Population:

7,961,619 (July 2006 est.)

Population growth rate:

0.66% (2006 est.)

Population Below Poverty Line:

49% (2002 est.)

Major Industries:

petroleum and natural gas, petroleum products, oilfield equipment; steel, iron ore; cement; chemicals and petrochemicals; textiles

Employing Workers: 66*

Registering Property: 59*

Enforcing Contracts: 34*

Closing a Business: 70*

*2006 World Bank rank out of 175 countries

Starting a Business

The table below shows the number of steps and the amount of time needed to start a business, on average

Indicator	Azerbaijan	Region
Procedures (number)	15	9.4
Time (days)	53	32

Azerbaijan Risk Assessment

Country Rating

Rating: C

A very uncertain political and economic outlook and a business environment with many troublesome weaknesses can have a significant impact on corporate payment behaviour. Corporate default probability is high.

Risk Assessment

Economic growth was very strong again in 2007, up 30 per cent after 34.5 per cent in 2006, and 26.2 per cent in 2005 thanks to a sharp increase in volume sales of oil in a context of high hydrocarbon prices. The rapid increase in oil export revenues has benefited the services sector, mainly telecommunications, transports, and construction. GDP growth should ease in stages to considerably more reasonable rates — up 17.4 per cent in 2008 and up "just" 10 per cent in 2009 — with oil production expected to reach a threshold after its threefold increase in the previous four years.

Oil export revenues fuelled a spectacular improvement in the country's financial health, exemplified by robust current account surpluses representing 30 per cent of GDP. Foreign debt, after growing sharply a few years ago to finance oil facilities, has returned to very moderate levels. Foreign exchange reserves and especially an oil fund now insulate the country from any hydrocarbon price shocks in the near term.

Howver, the oil export revenues, by fostering strong wage growth and robust private consumption, have been responsible for a marked upsurge of inflation: 16 per cent in 2007. Of even greater concern, the Azerbaijani manat appreciation spurred by the inflation and an influx of foreign currency has undermined the competitiveness of a private manufacturing sector that has particularly suffered from a poor legal and institutional environment. With the country's limited oil reserves, however, the export revenues will not last long. A competitive private sector will thus ultimately be essential to pick up the slack for flagging oil-sector export revenues.

• Agriculture
• Apparel
• Arts & Crafts
• Automobile
• Bags, Cases & Boxes
• Chemicals
• Computer Hardware & Software
• Construction & Real Estate
• Consumer Electronics
• Electrical & Electronics
• Energy & Environment
• Food & Beverage
• Furniture & Furnishing
• Health & Medicine
• Home Supplies
• Industrial Supplies
• Lights & Lighting
• Machinery
• Mineral & Materials
• Office Supplies
• Security & Protection
• Service
• Sports & Entertainment
• Telecommunications
• Textile
• Toys
• Transportation