mailing address: American Embassy Baku, Department of State,
Washington, DC 20521-7050

telephone: [9] (9412) 98-03-35, 36, 37

FAX: [9] (9412) 90-66-71

Flag description: three equal horizontal bands of blue (top), red,
and green; a crescent and eight-pointed star in white are centered
in red band

Azerbaijan Economy

Economy - overview: Azerbaijan's most prominent products are oil,
cotton, and natural gas. Azerbaijan's oil production declined
through 1997 but has registered an increase every year since.
Negotiation of 19 production-sharing arrangements (PSAs) with
foreign firms, which have thus far committed $60 billion to oil
field development, should generate the funds needed to spur future
industrial development. Oil production under the first of these
PSAs, with the Azerbaijan International Operating Company, began in
November 1997. Azerbaijan shares all the formidable problems of the
former Soviet republics in making the transition from a command to a
market economy, but its considerable energy resources brighten its
long-term prospects. Baku has only recently 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. Trade with Russia and the other former
Soviet republics is declining in importance while trade is building
up with Turkey, Iran, UAE, and the nations of Europe. Long-term
prospects will depend on world oil prices, the location of new
pipelines in the region, and Azerbaijan's ability to manage its oil
wealth.

GDP: purchasing power parity - $23.5 billion (2000 est.)

GDP - real growth rate: 11.4% (2000 est.)

GDP - per capita: purchasing power parity - $3,000 (2000 est.)

GDP - composition by sector: agriculture: 22%

industry: 33%

services: 45% (1999 est.)

Population below poverty line: 60% (2000 est.)

Household income or consumption by percentage share: lowest 10%: NA%

highest 10%: NA%

Inflation rate (consumer prices): 1.8% (2000 est.)

Labor force: 2.9 million (1997)

Labor force - by occupation: agriculture and forestry 32%, industry
15%, services 53% (1997)

Unemployment rate: 20% (1999 est.)

Budget: revenues: $777 million

expenditures: $995 million, including capital expenditures of $NA
(1999 est.)

Industries: petroleum and natural gas, petroleum