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AZimportance 32

Azerbaijan

Azerbaijan expands regional diplomacy while pursuing economic diversification

Azerbaijan is actively engaging in strategic partnerships with Japan, India, and China while advancing domestic initiatives in green energy and non-oil economic sectors. The country continues diplomatic efforts and maintains regional stability.

Why it matters

A strong Pashinyan mandate makes signing the Armenia–Azerbaijan peace treaty and opening the Nakhchivan corridor more likely, potentially reordering South Caucasus transit and weakening Russia's regional leverage while strengthening the Azerbaijan–Turkey axis. The outcome was watched closely amid Russian pressure aimed at halting Yerevan's Western drift.

Country basics

Population
10.2M
Capital
Baku
Currency
AZN
Head of state
Ilham Aliyev
Government
republic

Azerbaijan is a South Caucasus state straddling Western Asia and Eastern Europe, bordered by Russia, Georgia, Armenia, Iran and (via its Nakhchivan exclave) Turkey. It is a presidential republic dominated by the New Azerbaijan Party under President Ilham Aliyev, who has consolidated power within a system long criticized for limited political pluralism. Its defining rivalry is with Armenia over Nagorno-Karabakh; following the 2020 war and a 2023 offensive, Azerbaijan reasserted full control of the region. Baku maintains a close strategic alliance with Turkey and a pragmatic energy-driven relationship with Europe, while balancing ties with Russia and managing tensions with neighboring Iran.

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