Age of the oldest drawings is upwards of 10,000 years. Among the “stone books” there are a big flat stone formed out of 3 supports. Suffice it to touch the object with a small stone, melodious sounds come from it. This is the so called “Gaval dash” (tambourine) uttering sounds like “tam-tam”.

World famous scientist and traveler Tur Kheyerdal indicated his delight with the preserve as follows: “Gobustan isinvaluable treasure-house of Azerbaijan”. Kheyerdal paid a special attention to the 2 typesof boats – flat-bottomed and curved-bottomed, the latter being manufactured out of cane and bearing no resemblance with world’s patterns.

The Armenian aggression resulted in occupation of Nagorno Karabakh and 7 other regions of Azerbaijan, leaving around one million Azerbaijanis as refugees and displaced people.

Even though the war ended with Russia-brokered cease-fire in 1994, it was the military assistance from Russia, including $1 billion in illegal arms transfers, which significantly contributed to Armenian “success”.

International community reacted to the occupation of Azerbaijani lands by four UN Security Council resolutions of 1993, (S/RES/822, S/RES/853, S/RES/874, S/RES/884) demanding withdrawal of Armenian forces from the occupied territories. NATO, OSCE and other international organizations also repeatedly called for restoration of Azerbaijan’s territorial integrity, which were ignored by Armenia.

This blunt disrespect to international law by Armenia, violations of its commitments before the international organizations, was once again reflected in a resolution 1416 and recommendation 1960 by the Parliamentary Assembly of the Council of Europe in February 2005. The resolution clearly stated that “considerable parts of the territory of Azerbaijan are still occupied by Armenian forces and separatist forces are still in control of the Nagorno-Karabakh region”. The recommendation, in its turn, urged the withdrawal of military forces from all occupied territories of Azerbaijan.

The United States has always recognized the territorial integrity of Azerbaijan. “The United States does not recognize Nagorno-Karabakh as an independent country, and its leadership is not recognized internationally or by the United States. The United States supports the territorial integrity of Azerbaijan and holds that the future status of Nagorno-Karabakh is a matter of negotiation between the parties”, says the latest fact sheet by the Department of State of January 2005.

As a co-chairman of the OSCE Minsk Group (functioning since 1992), the U.S. mediates the peace process, as well as ongoing talks between Presidents and Foreign Ministers of Azerbaijan and Armenia, and Azerbaijan remains committed to a peaceful resolution of the conflict, which preserves its territorial integrity.

- Blue represents the aspiration to Turkization;
- Green represents the aspiration to Islamization;
- Red represents the aspiration to modernization and progress, following the European example

The discovery of the Azykh cave, one of the earliest habitations of human to be found in the world, and a number of habitations of the ancient Stone Age prove that Azerbaijan is situated in one of the birthplace areas of the humankind. Prehistoric cave dwellings have been excavated throughout Azerbaijan, one of the more important being the excavations at Gobustan, famous for its rock carvings.

The first state that emerged on the territory of Azerbaijan was Aratta in the third Millennium B.C. that was followed by the states named Kutium and Lullubium. In the 9th century B.C., the Manna state emerged with high economic and cultural level. In the first part of the 6th century B.C., Manna was conquered by Media. The official religion was Zoroastrianism, the spread of which was connected with self-kindled resources of oil and gas.

The 4th century B.C. was marked by the emergence of two Azerbaijani states: Atropatena in the south and the Caucasian Albania in the north of Azerbaijan. The name of Atropatena is connected with the name of its founder Atropat (satrap of Alexander of Macedonia), which was later transformed into the definition “Azerbaijan”.

By the second century A.D., the Caucasian Albania had developed into a major regional power. Its borders were essentially the borders of the present day Azerbaijan, and included the regions of Nakhchivan and Daghliq Garabagh (Mountainous Karabakh). The kingdom of Caucasian Albania was home to the first Christian communities in the region. One of the first apostolic Christian churches in South Caucasus appeared in the Caucasian Albania. The Caucasian Albania enjoyed a large degree of autonomy and was virtually an independent state. At the beginning of the 5th century, the Albanian alphabet was introduced and promoted the development of education.

By the beginning of the 8th century, Azerbaijan became a part of the Arab Caliphate. Islam became the dominating religion in Azerbaijan, creating new traditions and culture. In the medieval centuries, there was a succession of Azerbaijani states. The Azerbaijani dynasties of Shirvanshahs, Sheddadis, Revvadis, Atabey, Eldegiz, Garagoyunly, Aghgoyunly, and Sefevids ruled in a succession.

A rivalry between Russia, Iran, and Turkey to involve Azerbaijan into the sphere of their interests resulted in striking internal destabilization in the 18th century. The contradictions between the regional powers deepened in the 18th – 19th centuries. Wars were waged over Azerbaijan. The Turkmanchay Treaty of 1828 concluded by Russia and Persia divided Azerbaijan and its people between these two states.

The 20th century in the history of the Azerbaijani people marked the period of radical changes in socio-economic, political, and cultural life. A range of industrial branches was intensively developing in Azerbaijan. Baku turned into the world centre of oil extraction and refinery yielding more than half of the world and 95% of Russia’s oil extraction. Baku attracted investors and oil developers from all over the world, among them Alfred Nobel and his brothers. In fact, the fortune that Alfred Nobel acquired in Azerbaijan allowed him to establish the well-known Nobel Prize. In 1907, the Azerbaijani composer Uzeyir Hajibayov composed opera “Leyli and Majnun”, which was the first opera in the Muslim Orient. Formation of political societies, organizations, and parties for dissemination of progressive, democratic ideas contributed to the process of developing a national identity and fuelled the growth of the liberation movement of the people.

The fall of the tsarist monarchy in Russia on February 18, 1917, created favourable conditions for the development of national movements in its provinces. On May 28, 1918, Azerbaijan restored its state structure – the independent Azerbaijan Democratic Republic was established in the northern part of Azerbaijan. Newly independent Azerbaijan was the first nation in the region to adopt a secular, democratic form of government. Azerbaijan received de facto recognition by the Allied Powers after World War I as an independent nation in January 1920. Having existed for only 23 months, it collapsed on the 28th of April when the Soviet Red Army invaded Baku and eventually all of the territory of the northern Azerbaijan and overthrew the government. With the Red Army occupying its territory, Azerbaijan was incorporated into the Soviet Union on December 30, 1922.

For the next 70 years, Azerbaijan was within the Soviet state in the form of the Soviet Socialist Republic. The Soviet authorities ceded the Azerbaijani territory of Zangezur to Armenia, thus cutting off the Azerbaijani province of Nakhchivan from the rest of Azerbaijan. When Azerbaijan was annexed into the USSR, its total territory was 114,000 sq. km; on regaining its independence in 1991, Azerbaijan’s territory was 86,600 sq. km.

The late 1980s were characterized by increasing unrest, eventually leading to a violent confrontation with the communist regime when Soviet troops killed hundreds of peaceful demonstrators in Baku and other regions of Azerbaijan on January 20, 1990.

Azerbaijan restored its independence from the Soviet Union on August 30, 1991, when the Constitutional Act of State Independence was adopted. The new Constitution of the independent Republic of Azerbaijan was adopted on November 12, 1995. This event marked a new stage in the history of the people of Azerbaijan – the epoch of democracy and progress.

In 1987-1988, 250,000 Azerbaijanis were ethnically cleansed from their historic lands in Armenia, and have been living in Azerbaijan since 1987. More than 750,000 citizens of Azerbaijan fled the Nagorno Karabakh region of Azerbaijan and seven adjacent administrative districts presently occupied by Armenia in the south-western part of Azerbaijan (Aghdam, Fizuli, Jabrail, Kelbajar, Lachin, Qubadly, and Zangilan). Those who remain displaced include 60,000 from the Nagorno-Karabakh region itself. As Armenia continues to occupy the Nagorno-Karabakh region of Azerbaijan and seven surrounding districts, the displaced persons cannot return to their homes. Thus, more than one million refugees and internally displaced persons live in Azerbaijan today.

Although most of the refugees and displaced persons originated from rural areas, about 55 percent of them temporarily settled in urban areas, mostly in the capital Baku. More than half of the displaced persons still live in temporary accommodations, such as public buildings, hostels, schools, etc.

In 1993, the UN Security Council adopted 4 resolutions calling for the cessation of hostilities, immediate, complete and unconditional withdrawal of occupying Armenian forces from the Azerbaijani territories. Negotiations to resolve the conflict peacefully have been ongoing since 1992 under the aegis of the Minsk Group of the OSCE. The Minsk Group is currently co-chaired by France, Russia, and the United States.

Total investments (2007): $11.6 bln
Foreign investments (2007): $6.8 bln
Domestic investments: (2007): $4.8 bln   

External trade turnover (2007): $11.7 bln: 
Export (2007): – $6.0 bln: oil and gas, chemicals, oilfield equipment, textiles, cotton, tobacco, vegetables, etc.
Imports (2007): – $5.7 bln: machinery and parts, consumer durables, foodstuff, textiles, construction materials, etc.

Major trade partners: Turkey (14.3%), Russia (13%), Italy (9.2%), Iran (4.6%), USA (4.2%), Ukraine (4.2%), Germany (4.2%), United Kingdom (3.5%), Georgia (3.5%), Israel (3.4%), and others.
 
The performance of Azerbaijan in achieving macroeconomic stability and resumption of growth since 1995 has been impressive. Azerbaijan’s fiscal and monetary management, accompanied by favourable global economic trends have significantly improved the country’s macroeconomic situation. As a result of stabilization policies implemented since 1995, recovery began from the second half of 1996 and high oil prices led to acceleration of growth of GDP from 11.1% in 2000 to 34.5% in 2005 (highest growth indicator globally for the year). GDP growth rate constituted 25% in 2007. 
 
Privatization has played a significant role in the success of economic reforms in the country. In 2000 private sector constituted 68% of the country’s GDP. At present, the second phase of privatization is underway. This phase mainly envisages privatization of medium and large-scale enterprises. As a result of this policy, 81% of GDP was created by the private sector in 2007.
 
Upon restoration of strict fiscal control, budget deficit fell from 5.4% of GDP in 1995 to 0.4% in 2002 and further to 0.1% in 2005. The fiscal system is further characterized by a very low deficit of state budget not exceeding 1% of GDP in 2007 (0.2% of GDP). Currently due to increasing inflow of oil revenues, Azerbaijan does not consider a budget deficit as a serious problem of macroeconomic policy. Azerbaijan has a relatively low level of external debt equalled to $2.44 bln at the end of 2007, which was 8.2% of GDP. 
           
Rapid growth in the oil sector stimulated strong investment boom during the recent decade. The volume of foreign direct investments that amounted to $375 mln in 1995 rose steeply to the level of $927 mln in 2000 and to $6,760 mln in 2007. Main foreign investors are Turkey, USA, Iran, Germany, Russia, United Kingdom, UAE. Foreign direct investments outside the oil and gas sector are currently mainly in construction, services, transport, telecommunications and manufacturing. 
                       
Azerbaijan has concluded 27 production-sharing agreements (PSA) with a number f international oil companies. Oil from Azerbaijan reached the Turkish Mediterranean seaport of Ceyhan via the BTC (Baku-Tbilisi-Ceyhan) pipeline in late May 2006, and the pipeline is operating at full capacity now. The construction of Baku-Tbilisi-Erzerum gas pipeline was endorsed in February 2003 and has been successfully completed. This pipeline runs parallel to the BTC oil pipeline for most of its route before connecting to the Turkish gas transportation infrastructure in the Erzerum province. The gas from the Azerbaijani Shah Daniz deposit in the Caspian Sea is being transmitted through this pipeline. 
              
The importance of economic diversification and development of the non-oil sector is recognized as a major economic development challenge. State Programs on Economic Development, Small and Medium Entrepreneurship Development and Social and Economic Development of the Regions of Azerbaijan are among priority policy instruments.
 
In supporting the development of the non-oil economy and full integration into the world economic system Azerbaijan is striving to become a member of the World Trade Organization. Accession process started in 1997 and the Government of Azerbaijan is currently conducting active bilateral and multilateral negotiations.

There are 70 towns, including eight with more than 50,000 inhabitants. Slightly over half of the population lives in urban areas. The capital, Baku, located on the western shore of the Caspian Sea, has a population of over two million. Azerbaijan’s two other main cities are Ganja (307,500) and Sumgayit (296,900). Other notable cities include Mingachevir (95,500) and Ali Bayramly (74,600).

Within Azerbaijan, Nakhchivan is an autonomous republic and consists of eight districts: Babak, Julfa, Kangarli, Nakhichevan city, Ordubad, Sadarak, Shahbuz, and Sharur. Nakhchivan has its own Parliament (Ali Majlis), as well as the Cabinet of Ministers and Supreme Court. The Constitution of Azerbaijan and its laws are all valid in Nakhchivan, and laws and resolutions enacted there must not contradict national laws and resolutions.

Local government officials are elected in direct elections. The first municipal elections in Azerbaijan were held in December 1999. The municipal government is authorized to impose local taxes and payments, approve a local budget, and implement local programs of social security and economic development.