The Economist
Backgrounders

Azerbaijan

Nov 19th 2004
>>From Economist.com

Since the fall of the Soviet Union in 1991, Azerbaijan’s living standards
have plummeted and its putative stability has come at the cost of
stagnation. Azerbaijan’s Communist-era leader, Heidar Aliev, served until
2003, when he disappeared after appointing his son, Ilham, prime minister;
the son continues the father’s policies. A long-running war with Armenia
over Nagorno-Karabakh, an ethnically Armenian enclave within Azerbaijan’s
borders, remains unresolved despite a near-settlement in 2000.

Azerbaijan anchors a Kazakhstan-Turkey oil pipeline (which bypasses Russia
and Iran), scheduled to start production in 2005, despite worrying military
clashes over the Caspian’s resources in 2001. The windfall from that and
from the United States, which approved aid to Azerbaijan for the first time
in 2003 (despite its popularity among Chechen militants), could make Ilham’s
transition smoother. But he sounds belligerent over Nagorno-Karabakh, and in
distributing the oil bonanza must confront his country’s pervasive
corruption.

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