October 9th 2013 Azerbaijan A phoenix rising While Azerbaijan’s pipeline diplomacy has transformed it into a key player in Europe’s quest for energy security, its government’s canny oil revenue reinvestment strategy has seen its economy diversify rapidly, opening up new opportunities for cooperation. Building on its close commercial ties with the UK, which accounts for over 51 percent of foreign investment, Azerbaijan hopes to expand the range of its partners, and sees the inaugural European Olympic Games in Baku as an opportunity to show the world what it has to offer. the-report.net/azerbaijan Tourism Oil and gas Opinion | p. Something for everyone p. Stabilising the pipeline dreams of Europe p. 04 Fuad Akhundov 15 08 An economic miracle Sports p. 14 Baku: Olympic city Baku Foreign policy p. 12 Investment capital p. 06 Seeking regional peace Culture Information and communication technologies Diversification p. 16 A font of cultural trends p. 11 2013 – The Year of ICT p. 10 Vision 2020 GLOBAL BUSINESS FEATURES: EXCLUSIVE INTERVIEWS. INSIGHTFUL ANALYSIS. ANOTHER LOOK. 2 _ AZERBAIJAN > INTRO 3 Azerbaijan’s strategic importance Unique geopolitical position From ancient land of fire Sitting between Russia and Iran, Azerbaijan’s stability in a traditionally volatile part of the world is a shining example to the region. The country’s to modern powerhouse determination to maintain an Writer: Oliver Moss independent foreign policy has contributed greatly to facilitat- ing its economic development, and as a member of the UN Security Council, this robust, secular state seeks to maintain 2 positive relations both within and outwith its immediate surroundings. Western European energy security Along with state-owned SOCAR, BP is leading a consortium to develop Azerbaijan’s Caspian Sea gas field and has confirmed the Trans Adriatic Pipeline as the means to link it to the rest of Europe. No longer leaving much of the west reliant on Russian supplies, the pipeline will bring gas into south-east Europe and, crucially, to Italy, from where it will compete for the French, Ger- man Swiss and UK markets. 3 4 Cultural diversity Azerbaijan’s culture is one of the most diverse in the world – com- bining aspects of its European and Islamic heritage, as well as its more recent Soviet and West- ern influences. The country’s diversity and secular approach 1 to religion is one of its great strengths and the constitution it adopted in 1995 clearly states that nobody should be deprived of the right to speak their native Standing at the crossroads of Europe and Asia, Azerbaijan has been the world’s fastest language. In 2012, a conference growing economy over the past decade and is set to become a key regional partner for the west. at Westminster concluded that Azerbaijan’s example should be used to promote religious toler- Azerbaijan is a name that con- yev, began using its vast oil and gas 39th out of 144 countries in the eyeing the government’s incentives ance throughout Central Asia and the world. jures images of the exotic but until wealth to set the country on a new World Economic Forum’s Global for the production of renewable At a glance: recently was little known. How- path to rapid growth and devel- Competitiveness Report and has sources of energy. 5 6 ever, this republic in the Caucasus opment. Between 1995 and 2012, been ranked 1st among CIS coun- Azerbaijan has shaken off its So- 340% is becoming a rising star on the US$144.4 billion was invested in tries four years in a row. viet past to become an exporter Estimated GDP growth international stage and is develop- the country, with almost half com- Today, the nation is undergoing a of peace, security, stability and over the past decade ing into a key energy, security and ing from foreign investors – the transition from a purely oil-based tolerance in the region through US$144.4 billion trade partner for Europe. large majority of them British. But economy to one which encompass- dialogue, engagement and co- Investment received In 2012 Azerbaijan’s booming cap- with over 7 billion barrels of prov- es agriculture, industry, culture, operation. Today, its goal of ob- between 1995-2012 ital Baku played host to the Euro- en oil reserves, what steps is the tourism and much more. UK inves- taining developed country sta- vision Song Contest and in 2015 government taking to re-invest the tors are already taking note: An- tus by the mid-2020s looks ever 7 billion barrels will host the inaugural European oil wealth in emerging sectors and glo-Asian Mining has developed more achievable. <<< Estimated oil reserves Olympic Games. A non-permanent ensure the nation’s future wealth? the country’s first operating gold 476 seat on the UN Security Council In 2003 current President Ilham and copper mine, while shoppers British companies has given it further international Aliyev spoke of the need to turn in Baku can buy clothes from both registered in Azerbaijan standing while a series of oil and oil capital into human capital Debenhams and Stella McCartney. Over the today gas pipeline projects and ICT with ICT, infrastructure and edu- Meanwhile, the country’s tourism and transport corridors look set cation pushed to the forefront of sector received a massive boost af- past decade to place Azerbaijan firmly at the the government’s agenda. The fig- ter it hosted the Eurovision Song junction of east and west. ures have been astonishing: over Contest. With nine of the world’s Azerbaijan’s Finally sealing its independence the past decade Azerbaijan’s GDP 11 climatic zones, almost anything in 1991 with the break-up of the has more than tripled, with a 34.6 can, and does, grow in Azerbaijan GDP has more Soviet Union, Azerbaijan, under its percent growth in GDP registered – a boon to farmers, while solar 7 former national leader Heydar Ali- in 2006 alone. This year it came panel and wind turbine makers are than tripled 1 Baku’s Flame Towers have become a city icon Directors: Jose Powell, Art Director: Joana Pessanha This feature has been prepared 2 Medieval castles and archaeological sites abound in Azerbaijan Rafael Muñoz Graphic Design: Carlos Robledo as part of an exclusive partner- 3 Baku’s cultural and musical heritage has been recognised by UNESCO 4 One of Azerbaijan’s cultural centres, Nakhchivan is a landlocked exclave 450 km west of Baku, separated from Assistant Design: Charles Kushner ship with Trend News Agency, the rest of the country by Armenia a leading news company for the Editorial Coordinator: Oliver Moss Illustration: Belen Isasi 5 Baku’s Martyrs Memorial remembers victims of the independence struggle 6 Fountains Square in downtown Baku boasts dozens of fountains constructed during the Soviet rule of Azerbaijan Writers: Oliver Moss, Doug Gray Photos: Trend News Agency, Caucasus, Central Asia and Cas- 7 The centre of Baku has seen extensive regeneration Editing: Eleanor Wragg Region Plus Magazine (Baku) pian region. 8 A view of Crystal Hall, where Eurovision 2012 took place 8 4 _ AZERBAIJAN > OPINION 5 About the author 1. Azerbaijan has made significant progress in recent years in caring Fuad Ramiz oglu Akhundov was for the internally displaced born in 1962 and graduated from “A politician thinks persons (IDPs) who were forcibly the Azerbaijani University of Con- evicted from Nagorno-Karabakh Briefs struction Engineering in 1984. In and seven surrounding districts 1990, he defended his thesis on of the next election; by ethnic Armenian forces nearly applied mechanics and obtained two decades ago, and has so far his DPhil in physics and math- granted state-funded housing, Azerbaijan goes to ematics. Since the mid-1980s, he a statesman of the schools and hospitals in villages such as the one pictured to more the polls today has published analytical articles than 150,000 IDPs and refugees. Campaigning in Azerbaijan’s presiden- on a wide range of issues in the next generation” Today in Azerbaijan there are field of the socio-political life of about 1.2 million refugees, IDPs tial election kicked off in September, Azerbaijan, and has produced James Freeman Clarke and asylum seekers. and voting by the approximately five dozens of brochures, books and million citizens who are eligible will take TV documentaries. 2. President Ilham Aliyev (right) in place today – a week earlier than usual 2011, spending his 50th birthday due to the Muslim festival of with the first lady Mehriban Eid Al-Adha. Aliyeva visiting IDPs in the remote 1 2 Aghjabedi region. Both local and international observers will monitor the country’s presidential election, and the Azerbaijani govern- ment has invited groups, including the Organisation for Security and Opinion by Fuad Akhundov Co-operation in Europe (OSCE) Office for Democratic Institutions and Human Rights, to be present. The Central Elec- tion Commission will also be providing webcam coverage of polls throughout An economic miracle the country. So far, polls indicate that Aliyev will The Azerbaijani people are proud of their country, and believe President Ilham Aliyev’s be re-elected: 81.2 percent of people development plan could be a model for other nations to follow. questioned by the Ryay Monitoring Centre of Azerbaijan say that they will vote for him. Fuad Akhundov Since taking power in 2003, President good, while 60 percent are satisfied propelling it into the ranks of the World in the regions from 2004 to 2013 has led tolian Gas Pipeline) between Political scientist Azerbaijan is now an emerg- Meanwhile, in a survey carried out Ilham Aliyev has implemented forward- with the results of ongoing democratic Bank’s Upper Middle-Income Coun- to the creation of 1.1 million jobs.