Business Profile
Economy
Political upheaval – especially the war in Nagorno-Karabakh – and disruption of trading links within the former USSR resulted in a dramatic fall in production levels in Azerbaijan. Since the late 1990s, the economy has undergone a mild recovery. Agriculture is an important part of the economy, in terms of both employment and production. Cotton, grain, fruit and vegetables are the major products; livestock rearing is the other main contributor to the sector. Traditionally, heavy industry, in the form of chemicals, steel and metal products, dominated the industrial sector but there are now also important light industrial operations devoted to food processing and textiles. However, the oil and gas industry offers the greatest promise for Azerbaijan’s future economic development. Most of the reserves are located in the Caspian Sea basin and the Azeri government has signed a number of major deals with a variety of consortia for the exploration and development of various offshore fields; the state oil corporation retains a partial share in all of these. In the last few years, the contribution of the service sector – especially transport, telecommunications and trade-related activities – has grown sharply and now accounts for a large part of the economy. Azerbaijan left the Rouble zone in 1993, introducing its own currency, the Manat, the following year. A major privatisation programme was also put into effect that had transferred over three-quarters of productive activity into private ownership by 1998. As well as the IMF and the World Bank, which it joined in 1992, Azerbaijan has been accepted for membership of the Islamic Development Bank, the European Bank for Reconstruction and Development (as a ’country of operation’) and a number of regional economic and trade organisations. The country’s most important trading partners are now the Russian Federation, Iran, Turkey and Germany. Georgia and Hong Kong are key export markets (mainly for oil and gas products).
Commercial Information
The following organisation in the US can offer useful advice: US-Azerbaijan Chamber of Commerce, 1212 Potomac Street, NW, Washington DC 20007, USA (tel: (202) 333 8702; fax: (202) 333 8703; e-mail: chamber@usacc.org; website: www.usacc.org); or Chamber of Commerce and Industry, Istiglaliyat kucesi 31-33, 370001 Baku (tel: (12) 928 912; fax: (12) 971 997; e-mail: expo@chamber.baku.az).
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