Azerbaijan Country brief

Introduction/overview

The Republic of Azerbaijan is situated in the South Caucasus, bordering the Russian Federation to the north, Georgia to the north-west, Armenia to the west, Iran to the south and south-west, and the Caspian Sea to the east. Covering a total of 86,600 square kilometers, Azerbaijan is a mountainous country with almost half its territory comprised of the wooded mountains of the Greater and Lesser Caucasus. Its population was estimated at 8.1 million 2008.

The national day of Azerbaijan is Independence Day, celebrated on 28 May. It celebrates the founding of the Democratic Republic of Azerbaijan in 1918.

Political overview

The President of Azerbaijan is elected for a five year term. The President appoints the Prime Minister and the Council of Ministers (the Cabinet). Current President Ilham Aliyev won a landslide victory (with 77 per cent of the presidential vote) in 2003. He was re-elected on 15 October 2008 with roughly 89 per cent of the vote. In a referendum on 18 March 2009, voters in Azerbaijan approved a package of constitutional amendments including a removal of the two-term limit on presidential tenure.

The Azerbaijani Parliament comprises a unicameral National Assembly of 125 seats. Members serve five-year terms. The last round of Parliamentary elections was held on 6 November 2005. In the lead-up, international observers welcomed improved candidate registration procedures and the Government's active engagement with international observer missions. Most observers, however, also noted that significant improvements were still needed to bring campaign procedures up to international standards.

Azerbaijan is a member of the Commonwealth of Independent States (CIS), the International Monetary Fund (IMF), the World Bank, the European Bank for Reconstruction and Development (EBRD), the Organisation for Security and Cooperation in Europe (OSCE), NATO’s Partnership for Peace (PfP) program and the Council of Europe. Azerbaijan has observer status at the World Trade Organization and is seeking membership.

Azerbaijan's WTO membership Working Party was established on 16 July 1997, and the first meeting was held in June 2002. The latest meeting of the Working Party took place in December 2008. Bilateral negotiations between Baku and the WTO on market access are underway.

Economic overview

Once one of the fastest growing economies in the world, due to its vast reserves of Caspian Sea oil, Azerbaijan’s GDP growth is projected to slow to 2.5 per cent for 2009.

Oil exports to Europe through the newly constructed Baku-Tbilisi-Ceyhan (BTC) pipeline (a project worth around A$5 billion) began in June 2006. The pipeline extends over 1,770 kilometres from Baku via Georgia and into the Mediterranean Turkish port of Ceyhan where the oil is loaded onto super tankers for European markets. However, despite the opening of the BTC pipeline, Russia remains the primary route for Azerbaijan’s oil exports to Europe.

Bilateral relationship

Australia recognised Azerbaijan's independence on 26 December 1991.

According to the 2006 census, 290 people living in Australia identified themselves as of Azeri ancestry, although the Australian-Azeri community is estimated to be larger.

Australia contributed to a NATO Partnership for Peace Trust Fund project for the clearance of unexploded ordnance in the Saloglu region of Azerbaijan in 2006.

Then Vice-President Ilham Aliyev visited Australia in 2000 for the Sydney Olympics. In February 2009, the Hon Sabir Rustemkhanly MP, Chairman of the Civil Solidarity Party and Co-chair of the World Azerbaijanis Congress, visited Australia.

Officials from the Australian Embassy in Ankara, which is accredited to Azerbaijan, visit Baku regularly.

Bilateral economic and trade relationship

Australia's trade and economic ties with Azerbaijan are limited by the country's small size and its distant geographic position. In 2008, Australian exports to Azerbaijan were worth almost A$5 million, down from A$8.5 million in the previous calendar year. Butter made up the largest category of exports (A$3.1 million).

Imports from Azerbaijan in 2008 were worth A$94,000, predominately civil engineering equipment and parts and fruit juices.