Azerbaijan

What does the map enable, and what does it threaten?

The map gives Azerbaijan oil, gas and dangerous neighbours. It borders Georgia, Iran, Russia and Türkiye, and is rich in oil and gas⁵. The Baku–Tbilisi–Ceyhan pipeline, running since 2006, carries its Caspian oil to world markets without crossing Russia¹⁰. Its exclave of Nakhchivan is cut off from the mainland, which is why the planned TRIPP route across Armenia matters so much to it¹³. Its oil fields are past their peak: production is declining⁷. A resource-rich crossroads whose main asset is running down.

Is the population growing, skilled and staying?

The population is about 10.5 million, with a median age of about 34^1,2. The IMF put unemployment at 5.4% in 2024⁹. Income per head is about US$8,500, low for an oil state³. Data on education and skills was not gathered, hence low confidence. Without diversification, the oil economy will not create the jobs a young population needs^5,7. A young, mid-income people living on a wasting asset.

What habits does the society reward?

The institutional habits are weak. Azerbaijan scored 30 on Transparency International's 2025 index, up eight points, ranking 130th of 182⁶. Power has been held by one party since 1993 and one family since then: Heydar Aliyev was elected in 1993, and his son Ilham succeeded him in 2003 in a controversial election^10,11. Courts are used against critics, with journalists jailed on bogus smuggling and other charges¹². Survey data on trust and work norms was not gathered, hence medium confidence. This score is about institutions and social habits, not about any group.

Who rules, how are they chosen, and are they competent?

Judged by deeds, Ilham Aliyev has won his wars and not yet built an economy. The 2020 war ended with the territories around Nagorno-Karabakh handed to Azerbaijan, and his forces took Nagorno-Karabakh in a lightning offensive in 2023^15,13. He signed the US-mediated Washington Declaration in August 2025 and is pressing Armenia to change its constitution before a final deal^12,13. He confronted Moscow after Russian air defences shot down an Azerbaijani airliner in December 2024, killing 38¹⁴. But growth fell to 1.4% in 2025 and the economy still depends on oil and gas^7,8. Strong on power, weak on the economy.

Is there rule of law, low corruption and predictability?

Azerbaijan is orderly by force. The ruling New Azerbaijan Party has held power since 1993 and is accused of authoritarianism¹⁰. Elections are not contests: the main opposition parties boycotted the 2018 presidential vote as fraudulent¹⁰. Since late 2023 the government has cracked down on independent media, detaining journalists and convicting exiled bloggers in absentia¹². The war with Armenia is over in practice, with the two sides describing a real peace¹³. Order at home and peace at the border, both on the government's terms.

Where are the fault lines, and how stable are they?

The Karabakh conflict has been the focus of Azerbaijani politics since independence, and victory in 2020 and 2023 settled it in Baku's favour^11,13. The ethnic Armenians of Nagorno-Karabakh fled in September 2023, and Azerbaijan has taken no meaningful steps to ensure their return¹². Dissent is not allowed to show itself, so the depth of support for the regime is hard to measure¹². Survey data on social trust was not gathered, hence low confidence. A nation united by victory, with its divisions out of sight.

Why does the world need this country?

The world needs Azerbaijan for energy and for a route. Its oil reaches world markets through the Baku–Tbilisi–Ceyhan pipeline¹⁰. The TRIPP route across Armenia, with US development rights, would link Azerbaijan to Nakhchivan and to Turkey, and Washington backs it to move energy and trade away from Russia^12,13. The IMF puts its 2026 GDP at about US$89bn³. A mid-sized economy with a strategic position larger than its size.

What does it need, want and fear?

Need: growth beyond oil and gas, as oil production declines^5,7. Want: a signed peace on its terms, including a change to Armenia's constitution¹³; the TRIPP route to Nakhchivan and Turkey¹³; and a credit upgrade, which Moody's positive outlook suggests⁸. Fear: the end of oil revenues without a replacement⁷; Russian pressure, seen in the downing of an AZAL airliner in 2024 and the row that followed¹⁴; and dissent at home, which it suppresses¹².

Who are its patrons, rivals and hedges?

Azerbaijan balances among larger powers with skill. Turkey is its close ally, and the TRIPP route would give it direct access to Turkey¹³. It has drawn in the United States, which brokered the 2025 Washington Declaration and holds development rights over the route¹². With Russia it has stood its ground: after Russian air defences downed an AZAL airliner in December 2024, Aliyev demanded an apology, compensation and punishment¹⁴. Its pipeline already bypasses Russian territory¹⁰. A small state that has made itself useful to all and dependent on none.

Can it deter, or does it depend on others?

Azerbaijan spends heavily on its forces, and they have won. SIPRI puts military spending at about 6.5% of GDP in 2025, on an economy of about US$89bn^4,3. Its army won back the territories around Nagorno-Karabakh in 2020 and took Nagorno-Karabakh in a single offensive in 2023^15,13. It cannot match Russia or Iran, and relies on Turkey as its ally¹³. Readiness data was not gathered, hence low confidence. The strongest army in the South Caucasus, still small against its large neighbours.

Rising, stagnant or declining, and how fast?

Judged by results, Azerbaijan has peaked on oil. Growth fell to 1.4% in 2025 and the Asian Development Bank expects about 1.9% a year in 2026–2027, as oil production declines⁷. Strategies to diversify have not yet changed the economy's dependence on oil and gas^5,8. Its strengths are buffers and peace: Moody's cites significant financial buffers, and trade with Armenia is being rebuilt^8,13. Secure for now, slowing as the oil wanes.