Baku

Azerbaijan COUNTRY

4,670,740 CITY POPULATION

Mayor-Council GOVERNMENT TYPE

Introduction

Baku is the capital and largest city of Azerbaijan, as well as the largest city on the Caspian Sea and of the Caucasus region. Baku is located 28 metres (92 ft) below sea level, which makes it the lowest lying national capital in the world and also the largest city in the world located below sea level. Baku lies on the southern shore of the Absheron Peninsula, alongside the Bay of Baku. At the beginning of 2009, Baku's urban population was estimated at just over two million people. Officially, about 25% of all inhabitants of the country live in Baku's metropolitan area. Baku is the sole metropolis in Azerbaijan.

It lies on the western shore of the Caspian Sea and the southern side of the Abşeron Peninsula, around the wide curving sweep of the Bay of Baku. The bay, sheltered by the islands of the Baku Archipelago, provides the best harbour of the Caspian, while the Abşeron Peninsula gives protection from violent northerly winds. The name Baku is possibly a contraction of the Persian bad kube ("blown upon by mountain winds"). Baku derives its importance from its oil industry and its administrative functions.

Baku is divided into twelve administrative raions and 48 townships. Among these are the townships on the islands of the Baku Archipelago, and the town of Oil Rocks built on stilts in the Caspian Sea, 60 kilometres (37 miles) away from Baku. The Inner City of Baku, along with the Shirvanshah's Palace and Maiden Tower, were inscribed as a UNESCO World Heritage Site in 2000. According to the Lonely Planet's ranking, Baku is also among the world's top ten destinations for urban nightlife.

The city is the scientific, cultural, and industrial center of Azerbaijan. Many sizeable Azerbaijani institutions have their headquarters here. The Baku International Sea Trade Port is capable of handling two million tons of general and dry bulk cargoes per year.[9] In recent years, Baku has become an important venue for international events. It hosted the 57th Eurovision Song Contest in 2012, the 2015 European Games, 4th Islamic Solidarity Games, the F1 Azerbaijan Grand Prix since 2016, hosted the final of the 2018–19 UEFA Europa League, and will be one of the host cities for UEFA Euro 2020. The city is renowned for its harsh winds, which is reflected in its nickname, the "City of Winds".

Data and Facts

The total land area of Baku is 820 square miles (2,130 square kilometres) and its population was 2,374,000 in 2015
Baku is one of only two capital cities that are officially below sea level and is located 92 ft below sea level
Baku enjoys a temperate semi-arid climate with strong winds throughout the year, warm and dry summers, cool and wet winters, a large temperature variation and an average annual temperature of 15.1°C
It has been an ancient trade route since Roman times where goods would be traded between Central Asia and the west
Baku is the largest city in the Caucasus Region and the largest on the Caspian Sea
Baku's Old City is its historic heart and dates back to at least the 12th century, with some scholars believing it to date back to the 7th century AD

Administration

The Office of the President of Azerbaijan is the executive administration of President of Azerbaijan. The office is in charge of fulfilling the constitutional responsibilities of the President. The Office of the President of Azerbaijan was established with the declaration of independence of Azerbaijan on October 18, 1991. The construction of the building, initiated by the First Secretary of Communist Party of Azerbaijan SSR Heydar Aliyev and supervised by project manager Fuad Orujov and architects Tahir Allahverdiyev and Madat Khalafov, was started in 1978 and completed in 1986.

It was then occupied by the Central Committee of the Communist Party of Azerbaijan. After the restoration of Azerbaijan's independence in 1991, the building was assigned to the President of Azerbaijan and his administration and it was renamed the Presidential Palace in 2003. The Office of the Head of the Presidential Administration of Azerbaijan was headed by Ramiz Mehdiyev, and currently is headed by Samir Nuriyev. The Politics of Azerbaijan takes place in a framework of a semi-presidential republic, with the President of Azerbaijan as the head of state, and the Prime Minister of Azerbaijan as head of government.

Executive power is exercised by the president and the government. The state system of Azerbaijan defines the Constitution of the Republic of Azerbaijan. According to the constitution, Azerbaijan is a democratic, secular, unitary republic. President is the head of the state and head of the executive branch.

The President appoints all cabinet-level government administrators and heads of local executive bodies. Since 2008, the Constitution of Azerbaijan was amended, abolishing any term limit for the office of President. Last Constitutional reform took place in September 2016 and introduced the institute of vice presidency. According to the Constitution of the Republic of Azerbaijan, the President of the Republic of Azerbaijan is the head of state and has executive power.

The President of the Republic of Azerbaijan represents the country in internal and external affairs. The President of the Republic of Azerbaijan ensures the independence, territorial integrity of Azerbaijan, guarantees compliance with international treaties. The President in Azerbaijan is elected for a 7-year term on the basis of general suffrage. Any citizen of the Republic of Azerbaijan has the right to vote, who has been living in Azerbaijani territory for more than 10 years, has a higher education and does not have dual citizenship and obligations to the other states, and also not convicted for a serious crime, can become a presidential candidate.

The decision to dismiss the President of the Republic of Azerbaijan is put before the National Assembly on the initiative of the Constitutional Court on the basis of the Supreme Court's decision. The resolution on dismissal of the president is adopted by the majority of the votes of the deputies of the National Assembly and within 7 days is signed by the chairman of the Constitutional Court. The President has the right to immunity. The Vice-President of Azerbaijan is a group of posts following the President of the Republic of Azerbaijan.

The President himself appoints and dismisses the first vice-president and vice-presidents. With the early resignation of the president, within 60 days, as long as new elections are organized, the president's powers are fulfilled by the First Vice-President of Azerbaijan. Any citizen of the Azerbaijan Republic with a higher education who has the right to vote and has no obligations to other states can become a vice-president of Azerbaijan. The National Assembly of Azerbaijan is the legislative branch of government in Azerbaijan.

Every year, Milli Majlis of the Republic of Azerbaijan holds two regular, spring and autumn, sessions. Extraordinary sessions of Milli Majlis of the Republic of Azerbaijan will be summoned by the Chairman of Milli Majlis of the Republic of Azerbaijan at request of the President of the Republic of Azerbaijan or 42 deputies of Milli Majlis of the Republic of Azerbaijan. An assembly of the session of the Milli Majlis may be closed to the public upon the claim of 83 members of parliament or the proposal by the President of the Republic of Azerbaijan. The Nakhchivan Autonomous Republic is a constituent part of Azerbaijan with its own elected parliament consisting of 45 deputies.

Judicial power is administered by the Constitutional Court, the Supreme Court, the courts of appeal, ordinary and specialised courts. The Supreme Court of Azerbaijan is a supreme judicial body on civil, criminal and other cases related to the execution of general and specialized courts. The Constitutional Court of Azerbaijan is the supreme body of constitutional justice on the matters attributed to its jurisdiction by the Constitution, with authority to interpret and apply the Constitution of Azerbaijan. The Constitutional Court consists of nine judges appointed for a non-renewable 15-year term.

Judges of the Constitutional Court of the Republic of Azerbaijan are appointed by Milli Majlis of the Republic of Azerbaijan on recommendation by the President of the Republic of Azerbaijan. The 2003 Law on the Constitutional Court defines the Court's activities, as well as the status and duties of its judges. The courts in the Nakhchivan Autonomous Republic are part of the court system. The Nakhchivan Autonomous Republic Supreme Court serves as the appeal instance and its rulings are considered in classification by the Supreme Court of Azerbaijan.

Judges possess Constitutional immunity and may be called to criminal responsibility only in accordance with law. Local self-government in Azerbaijan is governed by municipalities. Elections to municipalities and the status of municipalities are established by the National Assembly of the Republic of Azerbaijan. Within the framework of the sovereignty of the Republic of Azerbaijan, municipalities are independent in exercising their powers. Every citizen of the Republic of Azerbaijan, who has the right to participate in elections and who permanently resides in the respective constituencies, may be elected as a member of the municipality.

Economy

The basis of Baku’s economy is petroleum. The presence of oil has been known since antiquity, and by the 15th century oil for lamps was obtained from surface wells. Modern commercial exploitation began in 1872. The Baku oil field at the beginning of the 20th century was the largest in the world, and it remained the largest field in what was then the Soviet Union until the 1940s. By the late 20th century, much of the easily extractable reserves had been exhausted; drilling was subsequently extended far underground and outward across the Abşeron Peninsula and into the seabed. After Azerbaijan became independent, foreign companies contracted to explore for other potentially lucrative sites and develop them, and new refineries were established. Many derricks stand in the gulf facing the city. Most of the subordinate townships are drilling centres, linked by a network of pipelines to the local refineries and processing plants. From Baku oil is piped to Batumi on the Black Sea or sent by tanker across the Caspian and up the Volga River. Besides oil processing, Baku is a large centre for the production of equipment for the oil industry. Metalworking, shipbuilding and repair, the manufacture of electrical machinery, the production of chemicals and construction materials, and food processing also contribute to the local economy.

By industrial institutions and individual entrepreneurs operating in this field, in January–November 2017, industrial production was 29.9 billion manat or was 3.7 percent less than in comparison the same period of the previous year.

Food production in the manufacturing sector increased by 2.0 percent, drinks by 23.4 percent, production of textile industry by 9.9%, clothing industry by 10.3%, leather goods, footwear production by 61.3 percent, paper and cardboard production by 27.9%, chemical production by 44.7%, production of pharmaceutical products by 2.6 times, production of Rubber and Plastics Products by 8.4 percent, production of building materials by 18.1%, metallurgy industry by 5.1%, electrical equipment production by 14.1%, machinery and its materials production by 47.1%, furniture production by 37.9%, jewelry, musical instruments, sport and medical equipments by 30,1%. The volume of production increased by 24.3 percent in the sector of production distribution and supply of electricity, gas, and steam, water supply, waste treatment and processing sector by 20.9 percent. The large part of the industrial products was sent to consumers, as of December 1, 2017, the final product covered 181.9 million manat in the warehouses of industrial enterprises, taking into account the reserves of previous years.

In January–November 2017, 12331.2 million manat or 3,35% fewer funds than in comparison the same period of 2016 were directed to capital assets. 8841.9 million manat or 71.7% of the funds directed to the capital assets were used for the construction and installation work. Oil and gas extraction, shipbuilding, steel, mechanical engineering and chemical industry are the main branches of heavy industry in Baku. In addition, the city has specialized in oil-gas machinery manufacturing. The enterprises such as Baku deep sea water piles plant , plant named after Sattarkhan, Keshla engineering plant, and Binagadi clay and steel plants produce the necessary parts of oil machinery. There are also radio electronics factories, car and shipbuilding plants operating in the city. Gozdak, Shuvalan, Korgoz quarries that are located around the city manufacture sawn stones. Ferroconcrete construction plant, asbestos, brick, plants and Garadagh cement plant produces materials for the construction industry.Clothing industry constitutes a considerably important part of the light industry of the city. At the same time there are shoe and leather plants in Baku. Baku-Glass LLC , Baku Sewing House , Caucasus Paper Industry LLC and other enterprises are operating in the city.

The total cost of production in the mining industry decreased by 3.6 percent compared to January–November of the previous year and amounted to 24.4 billion manat. 81.5 percent of the industrial production was produced in the mining sector, 16.2 percent in the manufacturing sector, 1.6 percent in electricity, gas and steam production, distribution and supply sector, 0.7% in the water supply, waste treatment and processing sector. Extraction of crude oil, the main product of the field was 34.9 million tons, natural gas commodity extraction was 16.6 billion kub meters. Oil production in the mining sector decreased by 6.2 percent, as well as commercial gas production decreased by 2.2 percent. Construction of Baku Higher Oil School new campus, new administrative building of Narimanov District Court, bridge in the Pirallahi district, «Pirallahi» Solar Power Plant, Balakhani Industrial Park, Baku-Tbilisi-Kars Railway, Pirshagi-Novkhani road, Binagadi-Novkhani-Corat highway completed in Baku in January–November 2017.

Business Environment

Recent legislative development in Azerbaijan regarding registration of legal entities made the entrepreneurial environment attractive to initiate the business. According to the World Bank Doing Business Report 2018, Azerbaijan has ranked among the top 20 countries in the world for under starting business category. This positive trend has been kept and even advanced in Doing Business Reports of 2019 and 2020. Currently, available business opportunities in Azerbaijan tied with flexible and modern regulations make it attractive to foreign businesses and investors. However, any haphazard decision without professional consultancy in the business opening and running could cause potential problems in the future. An LLC is the most convenient and widespread way of doing business. Azerbaijan's Civil Code states the minimum and maximum amount of share capital; up to 50 people can be founders. If authorised capital is declared, payment must be made immediately at the time the company is registered.In Azerbaijan, JSCs are divided into open joint stock companies and closed joint stock companies. The minimum share capital for an open JSC is at least AZN4,000 , while for a closed JSC it is at least AZN2,000.

According to Azerbaijan law, a representative or branch office is not a legal entity. However, representative offices and branches as well as legal persons have the right not only to exercise executive functions, but also to engage in any commercial activity not prohibited by the legislation of Azerbaijan. Registration can be done in eight working days. There are companies in Azerbaijan that can provide registration services for obtaining the appropriate business licence for representative offices or branches of foreign banks. After selecting a business structure, a few options for the company name are needed. The name of a legal entity in Azerbaijan must be unique.

Infrastructure

Throughout history the transport system of Baku used the now-defunct horsecars, trams and narrow gauge railways. As of 2011, 1,000 black cabs are ordered by Baku Taxi Company, and as part of a programme originally announced by the Transport Ministry of Azerbaijan, there is a plan to introduce London cabs into Baku. The move was part of £16 million agreement between Manganese Bronze subsidiary LTI Limited and Baku Taxi Company.Local rail transport includes the Baku Funicular and the Baku Metro, a rapid-transit system notable for its art, murals, mosaics and ornate chandeliers. Baku Metro was opened in November 1967 and includes 3 lines and 25 stations at present; 170 million people used Baku Metro over the past five years. In 2008, the Chief of Baku Metro, Taghi Ahmadov, announced plans to construct 41 new stations over the next 17 years. These will serve the new bus complex as well as the international airport. Baku Railway Station is the terminus for national and international rail links to the city. The Kars–Tbilisi–Baku railway, which directly connects Turkey, Georgia and Azerbaijan, began to be constructed in 2007 and opened in 2017. The completed branch will connect Baku with Tbilisi in Georgia, and from there trains will continue to Akhalkalaki, and Kars in Turkey.

Sea transport is vital for Baku, as the city is practically surrounded by the Caspian Sea to the east. Shipping services operate regularly from Baku across the Caspian Sea to Turkmenbashi in Turkmenistan and to Bandar Anzali and Bandar Nowshar in Iran. The commuter ferries, along with the high-speed catamaran Seabus , also form the main connection between the city and the Absheron peninsula.Baku Port was founded in 1902 and since then has been the largest Caspian Sea port. It has six facilities: the main cargo terminal, the container terminal, the ferry terminal, the oil terminal, the passenger terminal and the port fleet terminal. The estimated costs are 400 Million US$. From April to November Baku Port is accessible to ships loading cargoes for direct voyages from Western European and Mediterranean ports. The State Road M-1 and the European route E60 are the two main motorway connections between Europe and Azerbaijan. The motorway network around Baku is well developed and is constantly being extended. The Heydar Aliyev International Airport is the only commercial airport serving Baku. The new Baku Cargo Terminal was officially opened in March 2005. It was constructed to be a major cargo hub in the CIS countries and is actually now one of the biggest and most technically advanced in the region.

Technology

World Bank and Government of Azerbaijan have presented the findings of a new study undertaken by the World Bank experts entitled IT Sector and IT Skills in Azerbaijan: Challenges and Opportunities. The study assesses the strength and weaknesses of the IT sector in the country, and the gap between the skillset provided by the education system and those demanded by the employers in the IT industry. The analysis rely on discussions with the Government, interviews with public and private stakeholders, and surveys of the main IT industry players and technology universities.

Azerbaijan is facing the challenge to diversify its economy away from energy resources to create new sources of growth and quality jobs. While appreciating the measures that Azerbaijan has so far taken to stimulate the growth of local ICT sector, the Report analyzes the challenges the country is facing in meeting the economy-wide demand for high-quality technology skills spurred by the rapid growth and extensive public investment of past several years. «Azerbaijan has put in place a good environment for the development of ICT. Further progress in the areas of high speed Internet, training of skilled human resources, and support to the innovation ecosystem, can lead to the emergence of Azerbaijan as an IT hub in the region», says Carlo Maria Rossotto, Lead ICT Policy Specialist who coordinated the work of the World Bank team which prepared the report.

This study is part of the ongoing dialogue between the Government of Azerbaijan and World Bank to promote the connectivity program, one of the key areas of the World Bank’s support to the country. To achieve this objective the country needs to make sure that the education system meets the requirements of the employers. The study also found that the proportion of jobs in the services sector of the domestic IT industry, as well as the industry’s contribution to the GDP is small. Consequently, the priority should be given to the development of the domestic IT market and local products and services line, in addition to growing the local IT talent pool. This will help the domestic IT industry to compete in the regional of global markets. And finally, improving tariff policy concerning ICT products and services as part of the ongoing overall tax administration and customs service reforms in Azerbaijan, and introducing regulatory reforms to support private investment in the IT sector are recommended in order to improve productivity and foster the private sector led growth of the IT industry.

Social Wellness and Human Resources

Until 1988, Baku had very large Russian, Armenian, and Jewish populations which contributed to cultural diversity and added in various ways to Baku's history. With the onset of the Karabakh War and the pogrom against Armenians starting in January 1990, the city's large Armenian population was expelled. Under Communism, the Soviets took over the majority of Jewish property in Baku and Kuba. After the collapse of the Soviet Union, Azerbaijani President Heydar Aliyev returned several synagogues and a Jewish college, nationalized by the Soviets, to the Jewish community. He encouraged the restoration of these buildings and is well liked by the Jews of Azerbaijan. Renovation has begun on seven of the original 11 synagogues, including the Gilah synagogue, built in 1896, and the large Kruei Synagogue.Today the vast majority of the population of Baku are ethnic Azerbaijanis . When Baku was occupied by the Russian troops during the war of 1804–13, nearly the entire population of some 8,000 people was ethnic Tat. The intensive growth of the population started in the middle of the 19th century when Baku was a small town with a population of about 7,000 people. There are some other faiths practiced among the different ethnic groups within the country. By article 48 of its Constitution, Azerbaijan is a secular state and ensures religious freedom. Religious minorities include Russian Orthodox Christians, Catholic Levantines, Georgian Orthodox Christians, Lutherans, Ashkenazi Jews and Sufi Muslims. Baky is the seat of the Catholic Apostolic Prefecture of Azerbaijan. Zoroastrianism, although extinct in the city as well as in the rest of the country by the present time, had a long history in Azerbaijan and the Zoroastrian New Year continues to be the main holiday in the city as well as in the rest of Azerbaijan.

The city has many amenities that offer a wide range of cultural activities, drawing both from a rich local dramatic portfolio and an international repertoire. In 2007 the Heydar Aliyev Cultural Center designed by famous Iraqi-British architect, Zaha Hadid, was opened. Baku also boasts many museums such as Baku Museum of Modern Art and Azerbaijan State Museum of History, most notably featuring historical artifacts and art. Baku State University, the first established university in Azerbaijan was opened in 1919 by the government of the Azerbaijan Democratic Republic. In the early years of the Soviet era, Baku already had Azerbaijan State Oil Academy, Azerbaijan Medical University and Azerbaijan State Economic University. In the post-WWII period, a few more universities were established such as Azerbaijan Technical University, Azerbaijan University of Languages and the Azerbaijan Architecture and Construction University. After 1991 when Azerbaijan gained independence from the Soviet Union, the fall of communism led to the development of a number of private institutions, including Qafqaz University and Khazar University which are currently considered the most prestigious academic institutions. Apart from the private universities, the government established the Academy of Public Administration, the Azerbaijan Diplomatic Academy and various military academies. The largest universities according to the student population are Baku State University and Azerbaijan State Economic University. In addition, there are the Baku Music Academy and the Azerbaijan National Conservatoire in Baku established in the early 1920s. Publicly run kindergartens and elementary schools are operated by local wards or municipal offices.