Economy - overview:
Azerbaijan's number one export is oil. Azerbaijan's oil production
declined through 1997, but has registered an increase every year
since. Negotiation of production-sharing arrangements (PSAs) with
foreign firms, which have thus far committed $60 billion to
long-term oilfield 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. A consortium of Western oil companies is
scheduled to begin pumping 1 million barrels a day from a large
offshore field in early 2006, through a $4 billion pipeline it built
from Baku to Turkey's Mediterranean port of Ceyhan. Economists
estimate that by 2010 revenues from this project will double the
country's current GDP. 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. Several other obstacles impede
Azerbaijan's economic progress: the need for stepped up foreign
investment in the non-energy sector, the continuing conflict with
Armenia over the Nagorno-Karabakh region, and the pervasive
corruption. Trade with Russia and the other former Soviet republics
is declining in importance while trade is building with Turkey 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):
$42.99 billion (2005 est.)
GDP (official exchange rate):
$10.4 billion (2005 est.)
GDP - real growth rate:
26.4% (2005 est.)
GDP - per capita (PPP):
$5,400 (2005 est.)
GDP - composition by sector: agriculture: 14.1% industry: 45.7% services: 40.2% (2002 est.)
Labor force: 5.45 million (2005 est.)
Labor force - by occupation: agriculture: 41% industry: 7% services: 52% (2001)
Unemployment rate:
1.1% official rate (2005 est.)
Population below poverty line:
49% (2002 est.)