Sat at the crossroads where Europe meets Asia, Azerbaijan shares borders with the Caspian Sea to the east, Russia and Georgia to the north, Iran to the south and Armenia to the west.
A former Soviet republic, Azerbaijan has succeeded in transitioning from a centralised post-Communist economy, to becoming a major global exporter of oil. Today, Azerbaijan is the eighth largest supplier of oil to the European Union. Completed in 2006, the Baku-Tblisi-Ceyhn Pipeline is expected to generate $160bn of revenue over the next three decades. Russia and Turkey are the country’s primary economic partners.
Around 55% of Azeri land is used for agriculture. Important agricultural products include potatoes, beets, cotton and tobacco.
Though Azerbaijan was one of the first countries in the region to industrialise, the country’s economy has traditionally been hampered by weak administration and a lack of diversity. As recently as 2007, mining and hydrocarbon industries accounted for well over 95% of the Azerbaijani economy.
To counteract this, the government has made significant reforms in recent years, with some success. Defence has emerged as an important sector of the economy, and the government has made important ties to the governments of Belarus, Ukraine and Pakistan. And it is the government’s hope that the information technology and communication industries will become comparable with those from oil production in the medium term. Diversification, and the new opportunities it will bring, make Azerbaijan an intriguing prospect for the imaginative investor.
Based in Baku, HLB Azerbaijan offers first-rate advice to investors, domestic and foreign.