A country of Transcaucasia
north of Iran. The region was settled by the Medes before the
eighth century B.C. and was a separate kingdom after the death
of Alexander the Great. Ceded to Russia by Persia in 1813 and
1828, the territory was a constituent republic of the USSR from
1936 to 1991 (It joined the USSR Dec. 30, 1922). Azerbaijan
declared independence Aug. 30, 1991, and became an independent
state when the Soviet Union disbanded Dec. 26, 1991.
The map of the Azerbaijan is shaped somewhat like an eagle in
flight with capital (Baku city) for its head. Since the earliest
times, this area has been known as "the land of flames".
Capital: Baku
Time Zone: GMT +4
Currency: Manat (AZM) 1 USD ~ 4800 AZM
Electricity: 220 V, 50 Hz (double pins european plug)
Main cities: Sumgait, Giandja, Nakhychivan
Languages: Azeri (official), Russian
Religions: Islam (mostly 86%), Christianity, Judaism
Export: Oil & gas, iron, copper, fruit, vines, cotton,
silk, carpets
Area: 86,600 sq. km ( 33,400 sq. mi. )
Population: 7,600,000 (1997)
Political Setting
In September'88 Azerbaijan Republic had declared its national
sovereignty, in October'91 the formal independence was declared.
Power in Azerbaijan is focused on the President (Mr. Heydar
Aliyev was elected in October'93 and won in new presidential
elections in October'98) and his team, but there is a Cabinet
of Ministers headed by a Prime Minister and a Parliament ("Milli
Mejlis") which acts as legislative body.
Industry, Agriculture
Based on rich reserves of oil and natural gas, Azerbaijan
was one of the first petroleum-producing regions of the world.
In addition the country has a well-developed agricultural
base (with cotton as the main cash crop), a large industrial
sector, and an extensive transportation network. The economic
downturn during the past 5 years affected all these sectors,
with the highest declines occurring in industry. The industrial
sector in Azerbaijan has been characterised by a strong dichotomy
between energy and non-energy related activities, largely
associated with a distorted price structure which has favoured
energy products. Agriculture remains a key sector in the economy,
generating about 30"/o of GDP for 1995 was about USD
1,8 billion.
Trade System (Import and Export)
Azerbaijan's primary export products are diesel fuel and other
oil products, cotton, oil drilling equipment and light manufactures.
Licensing requirements have been removed for non-strategic
exports. Export contracts have to be submitted to and approved
by the Ministry of the Foreign Economic Relations as a control
on export underinvoicing. Export taxes were imposed in March'95
on strategic goods whose domestic prices remained significantly
below world levels, notably oil products and cotton. Unless
special permission is issued by the Cabinet of Ministers,
exporters must present evidence of prepayment or coverage
by an authorisedletter of credit before the Customs will clear
goods for export. There are no license requirements for imports
apart from a few commodities which are controlled for health,
environmental or security reasons. Low import duties are assessed
which vary by product but not by country of origin
The Oil Consortium
In September'94, the Government signed a production sharing
contract with a consortium of 11 international oil companies
for the development of several deep water oil fields in the
Caspian Sea. The contract specifies USD 7.5 billion in total
investments over 15 years. As a signature bonus of the oil
contract, Azerbaijan was granted USD 300 million. 'A new oil
bonus of USD 173 million will be disbursed to Azerbaijan in
tranches during 1995-98. Proven unexploited oil and natural
gas resources are officially estimated at about 900 million
metric tons, with substantial potentials below the Caspian
Sea.
Labour Force, Employement, Wages, Prices
Azerbaijan's working age population (ages 16 through 59) remains
almost constant at about 4 millions. Total employment is at
about 2.5 millions. The lowest salary is paid in agriculture
and social service. At the other end of spectrum were banks,
insurance and the oil sector, where wages were 5-6 times higher
than the economy-wide average.Thus, there is an abundance
of cheap labour power in Azerbaijan. Qualification of labour
power in a number of sectors (commerce, engineering, oil and
chemistry, oil industry, etc.) is very high.Controls on most
prices in Azerbaijan were lifted in 1992. in January'95, the
Government took an important step toward full price liberalisation
by announcing the abolishment of the state order system and
the end of the bread price subsidy. At present prices of only
public utilities and petroleum products remain controlled.
National Currency, Banking System
The manat was introduced in August'92 but became the sole
legal tender only in January'94. Azerbaijan has a two-tier
banking system which consists of the Azerbaijan National bank
and nearly 200 commercial banks. International Bank of Azerbaijan
provides international banking operations. Some foreign banks
have started their activity in Azerbaijan recently. Currently,
resident and non-resident persons or enterprises may freely
open foreign exchange accounts at banks in Azerbaijan. No
declaration of origin of the foreign exchange is required.
There are no restrictions on repatriation of foreign exchange
by local non-residents.
Privatisation
A framework law on privatisation was adopted in January'93,
but progress in this area has been slow. Only petrol stations,
taxi fleet and small commercial subjects have been privatised.
A number of steps to accelerate the privatisation was taken
in 1995, i.e. the State Privatisation Program for 1995-98
was re-drafted with the staffs of the World Bank and TACIS.
It covers almost all state property, including 4 large state
banks. It does not apply to the privatisation of the housing
stocks and land. Foreign investors are also allowed to participate
in privatisation process albeit subject to some additional
conditions and restrictions.
Passports, Visas
Entrance visas for Azerbaijan are granted to foreign citizens
in accordance with established procedures. All visitors to
Azerbaijan are recommended to obtain a visa prior to their
arrival. Passports without visas are retained by the immigration
authorities at the airport. Visitors then must to apply to
the Consular department of the Ministry of Foreign Affairs
during the working days to retrieve their passport with obtained
visa. (The Embassies )
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