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 was at 74.15 billion U.S. dollars and economic growth compared to 2012 was 5.8 percent. However, future GDP projections from the International Monetary Fund are much lower and vary from as little as 0.63 percent to as high as 3.59 percent year-over-year until 2020. Inflation also varies quite a bit from 1.02 percent in 2012 to a projected 7.88 inflation rate for 2015.
Azerbaijan’s national debt in relation to GDP is also expected to increase. The strongest sector of Azerbaijan’s economy is the industrial sector, - due to its aforementioned large oil and gas exports - with almost a 60 percent share, compared to a 36 percent share in the services sector and only around 6 percent agricultural share. The country reports a positive trade balance, even though it is decreasing, and trade with Europe and Turkey is getting stronger. Currently, Azerbaijan’s most important export partners are Italy, followed by Indonesia and Thailand, and its most important import partners are Turkey, Russia and the United Kingdom.
However, while the industrial sector is doing well, it makes up the lowest share of total employment with only 14.3 percent of the population working in industry. 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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