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Azerbaijan
Country Page

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Population: 7.83 million
Ethnic
Composition:
90% Azeri, 3.2% Dagestani, 2.5% Russian, 2% Armenian, 2.3% other
Religion: 93.4% Muslim, 2.5% Russian Orthodox, 2.3% Armenian
Orthodox, 1.8% other
Jewish
population: approx. 25,000
2002 aliyah
(emigration to Israel): 475
2002 Emigration
to United States: 111
Size:
86,600 sq km
Capital: Baku
Major cities: Baku, Gania, Sumgait
Freedom
House Rating:
Partly Free
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Currency: 4,881 manat = $1 (October 3, 2003)
GDP: $6.1 billion (2002)
GDP
per capita: $744 (2002)
GDP Growth: 10.6% (2002)
Head
of State:
President Ilham Aliyev
Head
of Government:
Prime Minister Artur Rasi-Zade
Foreign Minister:
Elmar
Mamedyarov
Ambassador
to United States:
Hafiz M. Pashayev
U.S.
Ambassador to Azerbaijan:
Reno
L. Harnish III
Chronology
of all U.S. envoys to Azerbaijan
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SUMMARY
Strategically situated on the ancient Silk Road, Azerbaijan shares deep ties with both the East and the West, its cultural allegiances influenced by a history of conquest by foreign powers. Azerbaijan’s contemporary relations with its neighbors have been shaped by the Nagorno-Karabakh territorial dispute with Armenia. Relations with Russia have been strained over competing oil interests and Russia’s closer relationship with Armenia. Azerbaijan is closely allied with Turkey and maintains relatively good relations with Iran; disputes continue with Central Asia over the division of Caspian Sea energy resources.
Like Armenia, Azerbaijan has suffered severe economic setbacks as a result of the Nagorno-Karabakh conflict and the 1998 Russian financial crisis. Despite increased revenue from the rise in world oil prices, Azerbaijan’s economic future is uncertain due to a lack of significant structural reforms. Popular anger over the slow pace of reform, high unemployment rates, and the suppression of political and civil rights led to mass protests in 2002.
Azerbaijan’s Jewish community dates back many centuries and has historically been well treated. Judaism is officially protected as a “traditional” religion, and the community and government work together in various public welfare and educational activities. Azerbaijani-Israeli relations are also strong. U.S.-Azerbaijan ties have grown stronger during the U.S. fight against terrorism, as the United States has waived application of Section 907 of the 1992 FREEDOM Support Act, which bans U.S. aid to the Azerbaijani government.
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AZERBAIJAN
INTRODUCTION
POLITICAL SITUATION
Foreign Policy
Israel
ECONOMIC SITUATION
JEWISH COMMUNAL LIFE & ANTI-SEMITISM
U.S. POLICY
Azerbaijan is slightly smaller than Maine, bordered by Turkey, Georgia, Russia, Iran, and the Caspian Sea. Derived from Caucasian and Turkic tribes, the Azeri people share strong cultural ties with Iran and Turkey. An estimated 13 million ethnic Azeris live in Iran.
A geographic link between East and West on the historic Silk Road, Azerbaijan has been frequently conquered and occupied throughout its history. Azerbaijan came under Persian rule in the
16th century. The Russo-Persian wars of the early 19th century brought Azerbaijan’s northern portion under Russian imperial control in 1813. With the collapse of the Russian empire, a reunited Azerbaijan declared its independence in 1917, only to be re-conquered by the Red Army in 1920. On August 30, 1991, after the fall of the Soviet Union, Azerbaijan regained its independence.
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POLITICAL SITUATION
Azerbaijan is a constitutional republic with an executive, legislative and judicial branch. Under the Constitution, the presidency is the most powerful of the branches. The President appoints a Council of Ministers, which is confirmed by the unicameral National Assembly. The President and the National Assembly are elected by popular vote. The judicial branch consists of a Supreme Court and is not independent from executive control.
President Heydar Aliyev, a former KGB general and former head of the Azerbaijani Communist party, came to power after a 1993 military coup deposed former independence leader Abulfaz Elchibey. Aliyev has since consolidated, and suppressed effective opposition to, his rule. Aliyev was reelected in 1998 amid allegations of campaign irregularities, but due to health problems decided not to run in the October 2003 elections. President Aliyev endorsed his son, whom he appointed Prime Minister in August, for the 2003 election.
Parliamentary elections were held in November 2000. In response to international criticism of the election process, Azerbaijan held run-off elections in January 2001. Opposition parties boycotted the new elections and, though there was greater transparency in election practices, international observers still criticized the vote.
Azerbaijani media are either controlled directly or indirectly (through self-censorship) by the state. Political opposition is limited, while foreign and “nontraditional” religious groups are restricted (Judaism is considered traditional). In response to the continued public usage of the Russian language in government and media, the parliament passed legislation in October 2002, designating Azerbaijani the official language of all government business and correspondence.
The continued suppression of civil and political freedoms coupled with economic grievances, the lack of progress in Nagorno-Karabakh and moves by President Aliyev to secure greater constitutional powers spurred massive protests in 2002 and 2003. Following a February 2003 referendum on constitutional amendments that gave President Aliyev broader powers, new violence erupted.
Since 1988, Azerbaijan has been in conflict with Armenia over the enclave of Nagorno-Karabakh. Although it was placed under Azerbaijan’s control by the Soviet Union, Nagorno-Karabakh has a large ethnic Armenian population, which declared independence from Azerbaijan in early 1992. Azerbaijani forces moved to suppress the rebellion, and a full-scale war followed between ethnic Armenians and Azeris. Over 800,000 Azeris and 300,000 Armenians became refugees as a result of the fighting, and widespread human rights violations took place.
In 1994, ethnic Armenian forces conquered almost 20 percent of Azerbaijan, including all of Nagorno-Karabakh, and a cease-fire was signed in July of the same year. Since then, various parties, most notably the Organization for Security and Cooperation in Europe (OSCE), have tried to mediate an end to the conflict. These efforts have met with little success, as border skirmishes remain frequent. Since 1999, direct talks have been held between the Armenian and Azerbaijani Presidents. The elements of a de facto state exist, with an elected president and a military of 15,000 soldiers, yet neither Armenia nor Azerbaijan recognizes its sovereignty.
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Nagorno-Karabakh
frontier
Shai
Franklin
Azerbaijani
refugees in Baku, July 1999

Shai
Franklin
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Foreign
Policy
Azerbaijan’s relations with its neighbors are mixed. Azerbaijan is a member of the
GUUAM (Georgia, Uzbekistan, Ukraine, Azerbaijan,
Moldova) and has close ties with Georgia and Turkey.
The relationship with Iran is more complex. A great deal of trade occurs between the two nations, but a number of recurring disputes – over the division of Caspian oil reserves, the status of the ethnic Azeri population in Iran, and Azerbaijan’s friendship with Israel – have soured relations. On particularly tense occasions, Iran has cut off power to the non-contiguous Azerbaijani province of Nakhichevan and has sent warships to intercept Azerbaijani petroleum explorations on the Caspian Sea.
Azerbaijan’s distrust of Russia stems from the transfer of large quantities of Russian-made arms to Armenia during the Nagorno-Karabakh conflict. Azerbaijani-Russian relations worsened in the mid-1990s when Azerbaijan rejected Russian-backed peacekeeping forces, alleging that Russia was biased in favor of Armenia. Russia has also repeatedly sought to dissuade Azerbaijan from participating, along with Georgia and Turkey, in a major U.S.-supported Caspian Sea petroleum pipeline project (Baku-Tbilisi-Ceyhan, or BTC), which bypasses Russia. Construction on the project began in January 2003 and is expected to be complete by the end of 2004. The Caspian is estimated to contain the world’s third-largest oil reserves and is a major source of tension among the littoral states.
In late 1999, Russia accused Azerbaijan of supplying arms and mercenaries to Chechen rebels and imposed trade restrictions on Azerbaijan. In November 2000, Russia cut off gas supplies during Azerbaijan’s parliamentary elections. Since then, Azerbaijan has worked to improve ties with Russia, and in February 2003, the two signed accords on increased military, intelligence and counter-terrorism cooperation. The two countries signed an agreement on the delineation of Azerbaijan’s undersea Caspian borders in late September 2002, part of a Russian effort to secure bilateral treaties with all the littoral states in advance of a November 2002 summit in Baku. The summit did not yield a definitive agreement between the states.
Azerbaijan has consistently pursued closer ties with the West, and is an active member of the Euro-Atlantic Partnership Council and Partnership for Peace of the North Atlantic Treaty Organization (NATO). Azerbaijan became a member of the Council of Europe in January 2001.
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Israel
Azerbaijani-Israeli relations are good, and Israel has an embassy in Baku. In May 1999, the U.S.-Azerbaijan Council sponsored a seminar to discuss relations among Azeris, Jews, and Israel. In April 2000, an Israeli trade delegation visited Baku to discuss ways of strengthening bilateral economic relations, and Aliyev announced his intention to visit Israel within the next year. Israel’s then-Deputy Prime Minister, Navaf Masalhu, visited Baku in January 2001, meeting with President Aliyev and other high-ranking officials. Talks focused on the development of economic and cultural ties and on the situation in the Middle East.
Many Azerbaijanis express the hope that friendship with Israel may help to resolve the Nagorno-Karabakh dispute and expedite Azerbaijan’s integration with the West. The Azerbaijan-Israel Friendship Society facilitates and promotes bilateral diplomatic and business links. In October 2001, President Aliyev pledged to open an embassy in Israel and to send his Foreign Minister to visit the country. Although neither has occurred, Azerbaijani-Israeli strategic cooperation continues to grow.
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ECONOMIC SITUATION
Azerbaijan appears to be recovering from the sharp economic downturns of the post-independence period and the 1998 Russian financial crisis, both of which were aggravated by the ongoing conflict with Armenia. An influx of oil revenue in 1999 led to significant economic expansion, but the sustainability of this growth remains in doubt. Azerbaijan’s transition from a command to a market economy has been slow; an estimated 64 percent of the population lives in poverty, while high structural unemployment and low standards of living persist throughout the country.
Rich in natural resources, Azerbaijan’s economy depends on the oil, natural gas, steel and iron industries, and economic conditions rely largely on world oil prices. While most land titles and small businesses have been privatized, the same is true for only 20 percent of medium and large-scale enterprises. President Aliyev stated in November 2000 that Azerbaijan’s oil industry is to remain under permanent state control.
In view of its high debt and poverty rates, Azerbaijan joined the CIS-7 initiative, created in 2001 by international lending organizations to reform the financial structure of new loans to the poorest former Soviet countries. In July 2001, the International Monetary Fund (IMF) approved a three-year, $100 million poverty reduction program for Azerbaijan. Following a brief suspension of funding, in March 2003 the IMF approved the release of the next $17 million of that loan. Resumption of funding was contingent on Azerbaijan’s preventing the diversion of money intended for Azerbaijan’s State Oil Fund for ad hoc welfare and infrastructural needs – particularly refugee assistance.
Azerbaijan has been a member of the Asian Development Bank (ADB) since 1999. The ADB’s 2002-04 funding strategy for Azerbaijan envisions $70 million in assistance, with emphasis on welfare for internally displaced persons.
World Bank assistance for 2003-05 is slated to reach $400 million, with $200 million already approved. The BTC project accounts for most of this funding, with focus also on reform of the domestic energy sector and fiscal policy.
Trade with Russia and other successor states is declining as traffic builds with Turkey, Iran, the United Arab Emirates, and Europe. Gas shipments to Georgia were slated to begin in late-2003. Membership in the World Trade Organization (WTO) is an important goal of the government. Domestic development of Caspian energy resources and increased foreign investment represent Azerbaijan’s best prospects for future economic growth.
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JEWISH COMMUNAL LIFE & ANTI-SEMITISM
Azerbaijani Jews are divided into Ashkenazi and Caucasian Mountain Jews. Ashkenazi Jews arrived in the
19th century. The Caucasian Mountain Jews (Tats) trace their roots in the region to a period before the
5th century. They speak a distinct Jewish dialect called Judeo-Tat (Judeo-Persian), a language that remained unwritten until Soviet rule. The main Jewish population centers are Baku and Quba. Many Jews emigrated after the collapse of the Soviet Union, fleeing war and poverty in the region. Communities of 500 or less remain in a number of smaller towns.

Lesley
Weiss |
March
2003: Opening of first new Baku synagogue in 100 years |
The town of Krasnaya Sloboda, in a section of Quba, has a Jewish center and a synagogue. Quba had 13 synagogues and was a center for Jewish learning prior to 1917. Krasnaya Sloboda is entirely Jewish and officially adheres to the Jewish calendar. Relations with the rest of (mostly Muslim) Quba are reported to be good.
10-15 Jewish organizations operate in Baku, including the Baku Religious Community of European Jews, a Jewish Women’s Organization, a War Veterans’ Society, the Azerbaijan-Israel Friendship Organization, and the Havva Welfare Center for Women and Children. The American Jewish Joint Distribution Committee (JDC/ “Joint”) operates a Jewish kindergarten, a community center, a Hesed charity center, and a Hillel student center. The Jewish Agency for Israel (JAFI/ “Sochnut”) conducts programs in the city, including a Hebrew-language ulpan, a winter camp for children, and a parents’ club, as well as a program to prepare candidates for aliyah. Other schools in Baku and Quba include a state-subsidized day school and a Jewish College, which operate under Vaad HaHatzolah of New York; total enrollment for all schools is around 1,450 students. In April 2003, President Aliyev officially recognized the day school as a Jewish national school. A state school in Krasnaya Sloboda, educating a mix of Muslim, Jewish and Russian students, is the only school in the country to teach minority languages. Students there learn about both Muslim and Jewish holidays.
Four synagogues hold services in Baku. Baku’s newest synagogue, opened in March 2003, is the first to be built in Azerbaijan in nearly a century. The opening ceremony, sponsored in part by the Baku Religious Community of European Jews, brought together broad diplomatic, governmental, and faith community representation.
Jewish relations with other ethnic and religious communities are generally positive, though there have been several reported cemetery desecrations. The most recent report, in October 2001, detailed the desecration or destruction of 47 tombstones in the City Cemetery, one of Baku’s two Jewish cemeteries. After the discovery of the attack, which reportedly occurred the day after the installation of Israel’s current ambassador to Azerbaijan, the Prosecutor General launched a thorough investigation and the Baku Mayor’s Office began repairs on the cemetery.
The Jewish community has enjoyed warm relations with the Azerbaijani government. Jewish organizations assist the government in caring for the thousands of refugees (mostly from Nagorno-Karabakh) within the country. As part of Azerbaijan’s ethnic-based educational policy, one wing of a Baku public school has been reserved for secular and religious classes for some 200 Jewish students.
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U.S. POLICY
The United States supports the democratization of Azerbaijan and its transition to a market-based economy, as with other successor states. The U.S. has expanded its financial stake in such efforts since 2001, and stated its strong support for the major proposed developments in Azerbaijan’s energy sector. Azerbaijan expressed its strong support for the U.S.-led war on terror, and provided blanket overflight rights, intelligence and law enforcement cooperation, and offered use of bases. In this context, bilateral commitments to enhance border security were greatly enhanced. However, U.S. concern persists over the Azerbaijan government’s suppression of civil liberties, and the United States continues to work for a resolution of the dispute with Armenia over Nagorno-Karabakh.
In late-2001, Congress allowed President Bush to waive the restrictions mandated by Section 907 of the FREEDOM Support Act of 1992, facilitating full U.S.-Azerbaijan cooperation in the fight against terrorism. Section 907 prohibits the U.S. Government from rendering aid to Azerbaijan, except for disarmament-related assistance, until Azerbaijan takes “demonstrable steps to cease all blockades and other offensive uses of force against Armenia and Nagorno-Karabakh.”
In September 1999, the United States and Azerbaijan signed an agreement pledging cooperation in counter-proliferation efforts against weapons of mass destruction. In 2000, the United States devoted an estimated $32.7 million for such programs in Azerbaijan, up from about $27 million in 1999. The United States has provided Azerbaijan over $8.6 million in landmine removal assistance since 1993, including training and equipment.
The total U.S. commitment to Azerbaijan in FY2002, $54.9 million, was divided between democracy promotion, security programs, humanitarian assistance, and market reform.
Despite the waiver of Section 907 and expanded cooperation between the two countries, U.S.-Azerbaijani tensions remain over violations of press, political and religious freedoms. A 1999 Azerbaijani religious law has caused U.S. concern because of clauses intended to restrict the activities of foreign and “non-traditional” religious groups. The United States has likewise expressed concern at the existence of the Azeri State Committee on Religious Associations, which brings security concerns into the framework of state policy toward religious groups. The United States participated in the October 2002 Baku Conference on the Role of Religion and Belief in a Democratic Society, jointly sponsored by the OSCE and Azerbaijan. At that conference, the United States reiterated its criticism of the Azerbaijani government’s quelling of public protests.

R.D.
Ward /Defense Department |
Azerbaijani
President Heydar Aliyev (right) meeting with U.S. officials at
Pentagon, February 2000 |
Most recently, President Aliyev paid a state visit to the United States in February 2003 to discuss U.S. cooperation for Caspian Basin energy development. In March 2003, Azerbaijan expressed support for proposed U.S. military action in Iraq. In May, the Parliament approved the deployment of a 150-man unit to participate in peacekeeping efforts
there.
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