The Republic of Azerbaijan is located between eastern Europe and western Asia on the Caspian Sea, with borders to Russia to the north, Georgia to the northwest, Armenia to the west and Iran to the south. Nakhchivan is an exclave of Azerbaijan, which is completely surrounded by foreign countries including Armenia, Iran and Turkey. Corruption in the country is widespread and the government has been accused of authoritarianism. Human rights are also seen to be deteriorating, and growing intimidation and repression of human rights defenders, journalists and others is increasing.
Azerbaijan’s economic growth can be attributed in large parts to its growing oil and gas exports. In 2013, GDP reached a peak and so did economic growth, naturally. However, future GDP projections from the International Monetary Fund are much lower and vary greatly year-over-year until 2022. Inflation also varies quite a bit and increased by more than 13 times from 2012 to 2017. It is very likely, however, to slump back down to a 7 to 54 percent range over the next years.
Azerbaijan’s national debt in relation to GDP is expected to increase severely as well. The strongest sector of Azerbaijan’s economy is the industrial sector, - due to its aforementioned large oil and gas exports - with a 50 percent share, compared to a slightly smaller share held by the services sector and significantly less generated by agriculture. The country reports a positive trade balance, even though it is decreasing remarkably, and trade with Europe and Turkey is getting stronger. Currently, Azerbaijan’s most important export partner is Italy, and its most important import partners are Turkey, Russia and the United States.
However, while the industrial sector is doing well, it makes up the lowest share of total employment with the majority of the population working in services or agriculture. The wealth and future of the country depends on whether the country can reverse its trend in deteriorating human rights, and whether it can use its wealth from the industrial sector to spur growth and employment across the other sectors.
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