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TRANSFORMATION IN AZERBAIJAN, 1989-2002


ON THE WAY TOWARDS DEMOCRACY AND A MARKET ECONOMY
An International Ranking of Developing and Transition Countries

Sponsored by The Bertelsmann Foundation
www.bertelsmann-stiftung.de/Transformation_de

Report On The Status Of The Economic
And Political Transformation In Azerbaijan (1989-2002)

Raoul Motika,
Ruhr-University
Bochum, Germany


1.Introduction
 Country Data
2. History and Characteristics of Transformation
3. Examination of Criteria for Democracy and a Market Economy
Democracy
3.1.1 Political Regime
3.1.2 Political Patterns of Attitude and Behavior
3.2. Market Economy
3.2.1 Level of Socio-Economic Development
3.2.2 Market and Competition
3.2.3 Stability of Currency and Prices
3.2.4 Private Property
3.2.5 Welfare Regime
3.2.6 Performance
3.2.7 Sustainability
4. Evolution
5. Evaluation of Transformation Management
5.1 Level of Difficulty
5.2 Reliability in Achieving Goals
5.3 Effective Use of Resources
5.4 Organizational Capability
5.5 Consensus-Building
5.6 International Collaboration
6. Overall Evaluation
7. Outlook


Introduction

The implementation of perestroika in 1985/86 under Soviet KP Chairman Mikhail Gorbatchev  and the subsequent violent conflicts starting in 1988 in the autonomous region of Nagorno-Karabakh, which is predominantly Armenian, ultimately led to the declaration of sovereignty by the former Soviet Republic of Azerbaijan on 30 August 1991. In line with the majority of other post-Soviet states, Azerbaijan faces enormous challenges, as it essentially must start from zero with respect to the creation of a new state and economic structure. One of the major hurdles affecting the development and transformation process, still in its infancy, is the hitherto unresolved territorial conflict surrounding Nagorno-Karabakh. With the exception of Abulfaz Elcibey, the leader of the national-democratic Popular Front Party, who was elected president in relatively free elections and held office for one year, all heads of state since 1991 are rooted in the Communist Party of the Soviet Union. In June of 1993 the government of Elcibey was overthrown by a military coup which was headed by colonel Surat Huseynov and backed by certain parts of the Soviet Army still stationed in Azerbaijan. Subsequently, Heydar Aliyev, a former member of the Politburo of the USSR was called back to Baku and assumed power. His ruling party, New Azerbaijan, has kept a tight reign on the country ever since. This evaluation concludes that with respect to meeting the objectives over the past five years, progress is evident in only a few limited areas whereas stagnation predominates and some areas even experience regression. Deficiencies exist particularly as regards democratization, the rule of law, reforming the economic system and transformation management. Territories under Armenian rule (17 percent of the geographical area) have been excluded from the following.


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TRANSFORMATION IN AZERBAIJAN, 1989-2002


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