Azerbaijan country brief

Overview

The Republic of Azerbaijan is situated in the South Caucasus, bordering the Russian Federation to the north, Georgia, Armenia and Turkey to the west, Iran to the south, and the Caspian Sea to the east. Its capital is Baku. Covering a total of 86,600 square kilometres, Azerbaijan is a mountainous country with almost half its territory comprising the wooded mountains of the Greater and Lesser Caucasus. Its population is 9.6 million (2015).

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

Political overview

The President of Azerbaijan is elected for a seven-year term and has the power to appoint Vice Presidents, the Prime Minister and the Council of Ministers (the Cabinet). The current President, Ilham Aliyev, took office in 2003, succeeding his father, Heydar, who had been president since 1993. He was re-elected in October 2008 and again in October 2013 after a 2009 referendum approved a constitutional amendment to remove the two-term limit on presidential tenure. The 2016 constitutional referendum extended the presidential terms from five to seven years. The 2013 presidential elections were criticised by the Organisation for Security and Cooperation in Europe (OSCE) as being seriously flawed and undermined by limitations on freedoms of expression and association, intimidation of candidates and voters, and a restrictive media environment.

The Azerbaijani Parliament comprises a unicameral National Assembly of 125 seats. Members serve five-year terms. Parliamentary elections were held on 1 November 2015. The ruling New Azerbaijan Party won 70 out of 125 seats. Mainstream opposition parties boycotted the elections, protesting the absence of a democratic environment. The OSCE did not send an election observation mission due to disagreements with the Government of Azerbaijan over the proposed numbers of election observers. An Australian parliamentary delegation visited Azerbaijan as guests of the Azerbaijani Government, and observed the elections.

Azerbaijan is a member of the United Nations (UN), 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 is a member of both the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB). Priority sectors in the ADB-Azerbaijan Partnership Strategy are transport, energy, water and other urban infrastructure services.

Azerbaijan has observer status at the World Trade Organization (WTO); it is currently seeking membership.

Economic overview

During the 2000s, Azerbaijan had one of the fastest growing economies in the world. However, falling oil prices in recent years led to a contraction in economic growth. The International Monetary Fund’s growth projections were -3.7 per cent in 2016, -1.04 percent in 2017, and then a return to growth of 2 per cent in 2018 and 3.1 per cent in 2019.

Azerbaijan’s economy is heavily reliant on oil and gas exports. Azerbaijan has the 20th largest oil reserves in the world and around 2000 billion cubic metres of proven gas reserves.

Azerbaijan is pursuing an economic diversification strategy, which includes an emphasis on tourism. In recent years, Azerbaijan has hosted several high profile events: 4th Islamic Solidarity Gates (2017), Formula 1 Grand Prix (2016), ‘European Games’ (2015), Eurovision Song contest (2012).

Bilateral relationship

Australia recognised Azerbaijan's independence on 26 December 1991 after Azerbaijan re-gained independence from the Soviet Union. Australia and Azerbaijan established diplomatic relations in 1992. Australia’s Ambassador in Ankara has non-resident accreditation to Azerbaijan. Azerbaijan established an Embassy in Australia in June 2013.

In 2012, Australia and Azerbaijan signed a Memorandum of Understanding on air services, specifically code-sharing services. In 2006 Australia contributed to a NATO Partnership for Peace Trust Fund project for the clearance of unexploded ordnance in the Saloglu region of Azerbaijan. In December 2010, Australia again supported the removal of explosive remnants of war in Azerbaijan by providing A$50,000 to the International Committee of the Red Cross / Red Crescent.  

In the 2016 census, 1036 people living in Australia claimed Azerbaijani ancestry.

High level visits

In June 2017, Senator Concetta Fierravanti-Wells, the Minister for International Development and the Pacific, visited Baku to mark the 25th anniversary of diplomatic relations. Australian parliamentary delegations visited Azerbaijan as guests of the Azerbaijani Government in June and November 2015 and then in September 2016 to observe the referendum process. Several parliamentary delegations from Azerbaijan visited Australia during 2015 and 2016.

Australia’s Ambassador for Counter-Terrorism, Mr Bill Fisher, visited Azerbaijan in September 2013. The Prime Minister's Special Envoy to Eastern Europe, the Balkans and the Caucasus, Dr Russell Trood, visited Azerbaijan in June 2012. Azerbaijan’s Deputy Minister for Foreign Affairs, Khalaf Khalafov, visited Australia in April 2012. As Vice-President, Ilham Aliyev – currently the President of Azerbaijan – visited Australia in 2000 for the Sydney Olympics.

Bilateral economic and trade relationship

Total two-way merchandise trade between Australia and Azerbaijan in 2016 was approximately $4 million. Australian exports to Azerbaijan totalled $3.7 million, including mechanical and civil engineering equipment and parts, as well as a crew transfer vessel. Imports to Australia from Azerbaijan in 2016 amounted to $279,000, comprising mostly fruit juices, and artwork and antiques. Azerbaijan’s State Oil Fund has made over $1.4 billion of investment in Australia, primarily in real estate.

For advice on doing business in Azerbaijan, see Austrade's website.

Last updated: August 2017


Last Updated: 17 August 2017