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Azerbaijan has begun making progress on economic reform, and old economic ties and structures are slowly being replaced.An obstacle to economic progress, including stepped up foreign investment, is the continuing conflict with Armenia over the Nagorno-Karabakh region.Livestock, dairy products, and wine and spirits are also important farm products.The Caspian fishing industry is concentrated on the dwindling stocks of sturgeon and beluga.Such rates cannot be sustained, but despite reaching 26.4% in 2005 (second highest GDP growth in the world in 2005 only to Equatorial Guinea), and 2006 over 34.6% (world highest), in 2008 dropped to 10.8%, and dropped further to 9.3% in 2009.
Now that Western oil companies are able to tap deepwater oilfields untouched by the Soviets because of poor technology, Azerbaijan is considered one of the most important areas in the world for oil exploration and development.
The pipeline is expected to generate as much as 0 billion in revenues for the country over the next 30 years.
The recent high price of oil is highly beneficial to Azerbaijan's economy as the nation is in the midst of an oil boom.
Azerbaijan has concluded 21 production-sharing agreements with various oil companies.
An export pipeline that transports Caspian oil to the Mediterranean from Baku through Tbilisi, Georgia to Ceyhan, Turkey (the Baku-Tbilisi-Ceyhan Pipeline) became operational in 2006.
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