Published October 9, 2012 By Elizaveta Egorova and Filipa Carreira Briefing CCPPR12AZ Report available in PDF and Flash formats

For seven decades, Azerbaijan formed part of the Soviet Union, gaining its independence in 1991. Soon after independence, Azerbaijan and Armenia fought a war over the Nagorno-Karabakh region, and relations between the two countries remain frozen. The relationship is further complicated by the fact that Azerbaijan’s territory is divided in two, with the non-contiguous Nakhchivan enclave separated from the rest of the country by Armenia. On the other side of the country, Azerbaijan has also witnessed worsening relations with Iran largely as a result of defense cooperation with Israel. Azerbaijan has, over recent years, become a hub for oil development and exploration, as well as currently boasting the world’s second longest oil pipeline.

Azerbaijan significantly improved its overall score in 2012, improving by 2.2 points and moving from 68th to 63rd on the Failed States Index. Azerbaijan has made some recent gains in social-economic policies, and military capacity. Despite significant gains in other areas, the unresolved conflict with Armenia over Nagorno-Karabakh will continue to handicap further development.

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