Within recent decades, Azerbaijan has gone a long and successful way to become the strongest country of the South Caucasus and an important actor in international affairs. The reached success was driven by several factors, including the sensible policy of the country’s leadership, its geopolitical and geo-economic position, socio-economic strategy of Azerbaijan’s development, and its multiculturalism model.
Geopolitical importance
Azerbaijan is geopolitically important due to its geographical location. The country is situated in the center of key processes and projects of development of the South Caucasus, the Caspian Sea region, and the Black Sea region.
Azerbaijan’s various energy projects and cooperation formats serving regional integration play an important role in providing stability in the South Caucasus. Furthermore, Azerbaijan actively participates in the global peacemaking process, suggests effective proposals and initiatives, and makes a valuable contribution to the strengthening of peace and security.
Key factors increasing the global and regional geopolitical weight of Azerbaijan are independent economy, material and human resources, civil unity, the government supported by the population, a strong security system, and other necessary institutions. It encourages Azerbaijan to provide independent internal and foreign policies. Moreover, Azerbaijan ensures the highest standards of investment security.
The restoration of territorial integrity of Azerbaijan plays an exceptional role in promoting of geopolitical opportunities for Azerbaijan in the region and in the world.
Azerbaijan’s strategic diplomatic steps provide the new environment of security and cooperation in the region. The geopolitical architecture of the South Caucasus is changing. There are new prospects for cooperation and integration in the region which has being been a place of a military-political conflict, tension, and anxiety for many years. It is advantageous and promising for all countries of the region. At the same time, confidence-building is in the spotlight in the South Caucasus. The next highly important step should be signing of a peace treaty between Azerbaijan and Armenia.
Azerbaijan chose the correct strategy of using oil and gas resources and brought together national interests of the country and the ever-growing energy demand in the world. Thus, the country established itself as a reliable partner and boosted its international reputation.
Oil and gas production in the region of the Caspian Sea has certain risks. The main of them is safe and clear supply routes to world markets. Azerbaijan has advantages in the sphere of oil and gas export to world markets and diversification of export routes. It is about either oil and gas produced by Azerbaijan itself or energy resources produced by its partners.
The possibility of the supply of Caspian gas to European markets on alternative routes reduces risks dramatically not only for Azerbaijan but also for all gas producing countries of the Caspian region. It also improves geo-economic security of the countries. Moreover, implementation of the Southern Gas Corridor and Shah Deniz Stage 2, as well as export of Azerbaijani gas to European markets has further strengthened the security.
In July 2022, President of Azerbaijan Ilham Aliyev and President of the European Commission Ursula von der Leyen signed the EU-Azerbaijan Memorandum of Understanding on a Strategic Partnership in the Field of Energy in Bucharest. In October 2022, the Gas Interconnector Greece–Bulgaria (IGB) was opened in Sofia, Bulgaria. In December 2022, the Agreement on Strategic Partnership in the Development and Transmission of Green Energy between the Governments of the Republic of Azerbaijan, Georgia, Romania and Hungary was signed.
On April 25th, 2023, President Ilham Aliyev signed the Memorandum of Understanding to Enhance Cooperation in Bulgaria. Bulgartransgaz EAD (Bulgaria), Transgaz (Romania), FGSZ (Hungary), Eustream (Slovakia) and the State Oil Company of the Republic of Azerbaijan (SOCAR) also signed agreements. The documents defined the areas of cooperation between the four transmission system operators and SOCAR, as well as the supply of additional gas from Azerbaijan to Europe.
Furthermore, Azerbaijan is a gate to Eurasia, a central state of transport and communication corridors between the East and the West. Azerbaijan is also a key transit center connecting the North and the South. The country is situated at the crossroads of energy and trade routes. It is a large transport hub with developed infrastructure. Azerbaijan is an important link in reconstruction of the ancient Silk Road. The country initiated the Baku-Tbilisi-Kars railway (BTQ), the North South and the East-West international transport corridors. All these factors prove a strategic position of the country.
Azerbaijan is also one of the safest and geopolitically stable routes from Europe to Central Asia. Thus, importance of the Middle Corridor which passes through Azerbaijan is growing. The Middle Corridor operates due to the Trans-Caspian International Transport Route initiated by Kazakhstan, Azerbaijan, Georgia, and Turkey. To increase capacity of the corridor, Azerbaijan boosts investment into its Caspian ports and the Baku-Tbilisi-Kars railway.
A geopolitical, geo-economic, military-political situation in Azerbaijan, as well as its geostrategic relations with the international society is positively influenced by certain drivers. Among them are balanced geopolitics, a pragmatic foreign course, a successful oil strategy, transnational energy and transport policies, the strategy of regional and national security, partnership with EU, NATO, CIS, and other international and regional organizations, participation in the Non-Aligned Movement, and participation in the majority of international conventions.
Socio-economic development of Azerbaijan
The UN has published the World Economic Situation and Prospects 2024 which says that global GDP growth is to decrease to 2.4 percent in 2024. Slow growth tendencies continue. Developing economies have to restore their losses connected with the pandemic. It is predicted that the global economy faces a high debt and a lack of investments. Economic growth in the U.S., China, Japan, and European countries decreases. However, according to the report, GDP in Azerbaijan is going to grow to 2.6 percent in 2024 and 2.8 percent in 2025. The average annual inflation reaches 9 percent in 2024. However, in 2025, it decreases to 3.9 percent. The World Bank also predicts that economic growth increases in 2024 and 2025 in Azerbaijan.
Despite the pandemic that took place in the world, macroeconomic instability and conflicts in recent years, including the Second Karabakh War, Azerbaijan went through these crises with minimal damage to economy. In recent years, growth of GDP was driven by the growth of the non-oil/gas sector. The share of the non-oil sector in GDP grew from 48.8 percent in 2011 to 66 percent in 2023. Azerbaijan established free economic zones and technology parks. The law relating to tax was amended to create wider opportunities for business. Azerbaijan takes serious steps to reduce its foreign debt. By the beginning of 2024, the foreign debt is less than 10 percent of GDP. In 2024, the index is going to be lower than 7 percent.
Azerbaijan is rich in energy resources and well-known in the world as an oil and gas exporter. However, the country also pays attention to renewables. Relevant laws and regulatory legal acts were adopted to develop the sphere and improve legislation. The Caspian Sea is a promising source of renewables (157 thousand megawatt). Azerbaijan implements projects to use the potential. The project of the Green Energy Corridor from the Caspian Sea to the EU suggests that energy from the Caspian renewable sources is delivered to Georgia, then to Romania and Hungary via an underwater cable in the Black Sea, and after that to other EU countries. Azerbaijan intends to be an exporter of green energy.
Moreover, Azerbaijan hosts COP29 this year, the 29th session of the United Nations Framework Convention on Climate Change. It will not only attract the attention of the international society, but also give Azerbaijan a new status of a key player in the international climate cooperation. The trust of the global community, as well as Azerbaijan’s international success is confirmed by the fact that Armenia and Bulgaria have withdrawn their candidacies in favour of Azerbaijan.
A minimum wage, a pension, social benefits have risen steadily in Azerbaijan. Targeted programmes on social and economic development of regions are adopted. Even though Azerbaijan has enough financial resources, the country pursues a pragmatic polity in the sphere of government spending. On the one hand, the policy serves the well-being of the country’s population; on the other hand, it creates opportunities for financial stability and protects Azerbaijan against crises.
More than 30 state programs, strategies, and road maps in the social, economic, and environmental spheres of Azerbaijan were integrated in the UN global sustainable development goals.
Multiculturalism
Historically, multiculturalism and tolerance have always been a part of Azerbaijanis’ life style. Today they are common for all citizens of Azerbaijan regardless of their ethnicity, language or religion. Azerbaijan is famous in the world with its multiculturalism. Mosques, churches, and synagogues work side by side without any jealousy or anxiety. Numerous ethnic minorities live there happily and in peace.
As a crossroads between the West and the East, Azerbaijan has always been a meeting place of various religions. Historic development of Azerbaijan, its location, and the ethnic structure of the population predetermined coexistence of different religions there. People of all ethnicities, languages, religions, and traditions have equal rights in the country. Azerbaijan ensures freedom of religion and belief. It is enshrined in numerous laws and regulatory acts.
Since 2011, Baku hosts the World Forum on Intercultural Dialogue twice a year on President Ilham Aliyev’s own initiative. The forums are held in partnership with UNESCO, the United Nations Alliance of Civilizations, the Council of Europe, ISESCO, and the United Nations World Tourism Organization. The Heydar Aliyev Foundation held various events in Paris, Moscow, Berlin, Rome, and Vatican. They played a big role in the promoting of Azerbaijan’s multiculturalism model.
