Calayan, Lyra Joy B.

COMWORLD
1-A1

AZERBAIJAN
Brief history:
Azerbaijan is a country in the Caucasus region of Eurasia. Country’s capitalis Baku
(Baki, Baky). The name Azerbaijan comes from the Persian phrase “Land of Fire”. The country's
history is a combination of the Turks from the 11th century and the ancient Persians.
The area we know today as Azerbaijan's history was conquered by the Arabs in 642 AD.
The people were converted to Islam at the time. For the next several hundred years, the area was
an Arab province and prospered. After the Arab empire fell, the Mongols invaded. Throughout
the 13th-15th centuries the area was ruled by first the Mongol II-Khans, then by local rule for
sometime, and later under Persian rule.
Azerbaijan had a strategic location both with ports on the Caspian Sea and trade routes
between Asia, the Middle East, and Europe. As a result, it was fought over by major empires
including the Ottoman Empire, Russia, and the Persian Empire. In 1828, the Russians and the
Persians split up Azerbaijan.
Up until WWI and the collapse of the Russian Empire in 1917, Azerbaijan was ruled by
Russia and Persia and was valued because of its oil resources. There was a short period of time
between 1918 and 1920 where the country was independent, however, the Soviet Union invaded
in 1920 and Azerbaijan became part of the Soviet Union. It would remain there until August 20,
1991 when it would declare independence.
The economy of Azerbaijan is composed of major Industries such as petroleum and
natural gas, petroleum products, oilfield equipment; steel, iron ore; cement; chemicals and
petrochemicals; textiles. Their agricultural products: are cotton, grain, rice, grapes, fruit,
vegetables, tea, tobacco; cattle, pigs, sheep, goats. Natural resources are petroleum, natural gas,
iron ore, nonferrous metals, alumina. Their major exports are oil and gas 90%, machinery,
cotton, foodstuffs and major imports are machinery and equipment, oil products, foodstuffs,
metals, chemicals. Their currency is Azerbaijani manat (AZM) with the National GDP of
$93,050,000,000.

During the great depression in 1930, what happened to the economy of this country? How did
they cope up and survived until the present era?
The shaping of economic structure of the country continued at a slow pace during 1920-
1939. The primary economic sectors were oil, gas, chemical, light industries, food processing,
machine building and metalworking. In October 1929, the stock market crash sets the stage for the
Great Depression. In1929-1932, the unemployment rate reaches 22.9%, gross domestic
product drops sharply. Large numbers of Azerbaijans lose their homes and farms. Oil price dropped
to a record low in 1931 as demand plummeted during the Great Depression.
Like other union republics, Azerbaijan was affected by Stalin's purges in the 1930s.
During that period, sometimes referred to as the "Red Terror", thousands of people were killed,
including notable Azeri figures. Directing the purges in Azerbaijan was Mir Jafar Baghirov, the
first secretary of the Communist Party of Azerbaijan, who followed Stalin's orders without
question. His special target was the intelligentsia, but he also purged Communist leaders who
had sympathized with the opposition or who might have once leaned toward Pan-Turkism or had
contacts with revolutionary movements in Iran or Turkey.
Oil-gas sector played dominant role in developing other sectors of economy. Considered
economic policy led to macroeconomic stability and sustainable economic growth, as the result,
reforms started in all economic fields, new measures are taken in order to improve social welfare
of population.
In the first years after the Second World War, all the branches of the economy were
adjusted to the requirements of the peacetime period. During these years, a lot of work was done
in the direction of profitable placement of industrial sectors and facilities in the country,
developing of the regions with a low standard of living, increasing the level of use of labor
resources in small and medium-sized cities. Since the country's independence in 1991, the
Republic of Azerbaijan has embarked on an independent policy in the field of economy. After
the dissolution of the Soviet Union, Azerbaijan's economy had been severely damaged.
The exploitation of hydrocarbon resources has played a pivotal role in the economic
development of Azerbaijan. The number of agreements with foreign companies and foreign
investments had also contributed to the state's economy. Transition to market economy by
adopting relevant reforms had also been one of the main objectives of the economic policy.
The first period of the economical development of Azerbaijan (from 1991-1995) can be
described as the period of economic recession. The period after 1996 can be portrayed as the
period of dynamic economic development. In 1994, one of the important oil contracts was signed
between Azerbaijan and 13 major oil companies, representing 8 countries of the world. This
agreement went down in history as "the Contract of Century".
Oil remains the most prominent product of Azerbaijan's economy with cotton, natural gas
and agriculture products contributing to its economic growth over the last five years. More than
$60 billion was invested into Azerbaijan's oil by major international oil companies in AIOC
consortium operated by BP. People visit petroleum spas (or "oil spas") to bathe in the local crude
in Naftalan. A leading caviar producer and exporter in the past, Azerbaijan's fishing
industry today is concentrated on the dwindling stocks of sturgeon and beluga in the Caspian
Sea.
Azerbaijan shares all the problems of the former Soviet republics in making the transition
from a command to a market economy, but its energy resources brighten its long-term prospects.
Azerbaijan has begun making progress on economic reform, and old economic ties and structures
are slowly being replaced. An obstacle to economic progress, including stepped up foreign
investment, is the continuing conflict with Armenia over the Nagorno-Karabakh region.
Through the Soviet period, Azerbaijan had always been more developed industrially than
Armenia and Georgia, two neighboring Transcaucasia countries - but also less diversified, as a
result of slow investment in non-oil sector. With a history of industrial development of more than
100 years, Azerbaijan proved to be a leading nation in Southern Caucasus throughout the turmoil
of Soviet Union collapse in early 1990s until nowadays.
 Progress on economic reform has generally lagged behind macroeconomic stabilization.
The government has undertaken regulatory reforms in some areas, including substantial opening
of trade policy, but inefficient public administration in which commercial and regulatory
interests are co-mingled limit the impact of these reforms. The government has largely
completed privatization of agricultural lands and small and medium-sized enterprises. In August
2000, the government launched a second-stage privatization program, in which many large state
enterprises will be privatized. Since 2001, the economic activity in the country is regulated by
the Ministry of Economic Development of Azerbaijan Republic.
Azerbaijan's economy is gradually recovering from the 2016 recession, aided by more
stable oil prices and improvements in the terms of trade. Natural gas exports, together with a
moderate upturn in domestic demand, are projected to boost economic growth in the medium
term.
A number of socioeconomic region development programs aimed at economic
diversification were implemented between 2004 and 2018. The estimates of the Davos World
Economic Forum showed that Azerbaijan's economy ranked 38th in the world for the level of
competitiveness.