Which CIS countries are located in the South Caucasus. The Caucasus is divided into three regions: the Caucasus, the North Caucasus and the Transcaucasus

The Transcaucasian republics of the CIS include two bordering with Russia, Azerbaijan and Georgia, as well as Armenia, which in the Soviet period constituted one Transcaucasian economic region.

The area of ​​the three republics is 186.1 thousand km 2, the population is 17.3 million people.

The largest republic in terms of area and population is Azerbaijan, the smallest is Armenia.

Conditions for the development of the economy. The economic and geographical position of the Transcaucasian republics has now deteriorated. Several points of hostilities in this region caused irreparable harm to the entire economic complex. Now there is no direct railway connection from Georgia to Russia through Abkhazia, the complexity of Azerbaijan's relations with the Nakhichevan Republic, which is part of Azerbaijan, is caused by the Armenian-Azerbaijani conflict over Nagorno-Karabakh.

Of the minerals, coal, oil, gas, alunites, and salts are found here. From metamorphic and igneous ores of iron, manganese, copper, molybdenum, polymetallic, as well as deposits of marble, tuff, pumice, arsenic and barite ores can be distinguished.

The agro-climatic potential of the territory is quite high, which, along with altitudinal zonality causes a significant variety of conditions for growing crops and breeding animals.

Population. The population of the Transcaucasian republics is constantly increasing. Azerbaijan has the highest growth rates (up to 1% per year), Georgia is about 0.01%, and Armenia is 0.1%. Significant natural increase due to high birth rate is characteristic only for Azerbaijan 9%. This indicator turns out to be almost zero in Georgia (0.1%o). In Armenia it is slightly more than 3%.

The territory stands out for its high population density, and in Armenia it reaches its maximum values ​​in the CIS (128 people/km 2 ).

In Georgia, the share of the urban population is 56%, in Azerbaijan 54%, in Armenia - 68%.

The main titular peoples of Transcaucasia belong to different language families. Georgians are representatives of the Kartvelian language family of the Kartvelian group, Armenians also form their own group in the Indo-European language family, Azerbaijanis belong to the Turkic group of the Altaic language family. The majority of the Georgian population are Christians, Azerbaijanis are adherents of Shiite Islam, Armenians are Christians and monophysites.

Economy. The severe economic crisis that engulfed the entire post-Soviet space after the collapse of the USSR manifested itself to the maximum extent in the republics of Transcaucasia.

Industry. Now, as elsewhere in the CIS, in the republics of Transcaucasia, industries with their own resource provision have come to the fore.

Azerbaijan is increasing its oil and gas production, attracting significant foreign investment for this.

Georgia currently stands out as a major exporter of manganese ore and is also trying to re-establish ties with Russia in terms of selling wine and citrus to our market.

Armenia, which is experiencing the most serious energy difficulties, was forced to restart the nuclear power plant that was closed after the Spitak earthquake (1988). This made it possible, to some extent, to restore the smelting of copper and molybdenum.

Agriculture. In Georgia, where a significant part of the plains is located in a humid subtropical climate, the cultivation of tea, citrus fruits, and tobacco has developed; in the Kura and Alazani valleys, significant areas are occupied by vineyards. Wheat, barley, corn are grown from field crops. Sheep are grazing in the mountainous regions.

In Azerbaijan, the climate is much drier, which leads to the use of additional irrigation in agriculture for growing cotton, vegetables, grain crops. In the northern and western regions, as well as in Georgia, grapes are grown. Significant areas of semi-desert pastures are used for grazing fine-fleeced and astrakhan sheep.

Armenia differs from the other two republics in more severe climatic conditions. Grapes here for the winter have to be sheltered from severe frosts, but due to the dryness of the climate, the grapes in the summer gain a lot of sugar, which makes it possible to produce cognacs. Vegetables and cereals are grown in the Ararat Valley, and there are many peach and apricot orchards on the slopes.

Transport. The difficult terrain hinders the development of transport routes on the territory of the Transcaucasian republics. But still, in terms of the density of railways and roads, they can be put in the middle of the list of CIS countries. Among the railway lines, one can single out the Transcaucasian.

After the collapse Soviet Union the republics that were part of it decided on their choice, and most of them got out of influence Russian Federation forming separate states. Transcaucasia did the same. The countries that were part of this region in 1990 became independent powers. These are Azerbaijan, Armenia and Georgia. The characteristics of the countries of Transcaucasia are presented in the article.

The history of the region

The countries that existed in antiquity on the site of modern Transcaucasia were well known beyond its borders. For example, in the 9th century BC. e. the strong and rich Urartian kingdom was located on. The unification of tribes in this region began in the 13th century BC. e., as evidenced by Assyrian sources from the reign of King Ashurnatsirapal II. Formerly nomadic, they settled along the coast becoming artisans, farmers and pastoralists.

By the 8th century, the inhabitants of the kingdom had not only their own language and script, but also religion, and the division of the country into regions with local administration and subordination to the central authority in the person of the king and government.

Thanks to military campaigns on the territory of modern Syria and advancement to the countries of the Caucasus, Urartu significantly expanded its possessions. Fortified cities, irrigation canals and aqueducts were built on the conquered territories, and state granaries were created in case of a siege.

No less famous is the history of Colchis, located on the territory of modern Georgia. The people who inhabited it were famous for jewelers, blacksmiths and metallurgists. Their skill and wealth of the region formed the basis of the myth of the Golden Fleece, followed by the Argonauts, led by Jason.

What is surprising in the history of these ancient states that make up Transcaucasia? The countries of which it consists today were able to form their own languages ​​and customs, leave a rich architectural and cultural heritage under constant external pressure.

Georgia

This country occupies the central and western part of the region and borders on Azerbaijan, Russia, Armenia and Turkey.

The countries of the CIS, Transcaucasia, including Georgia, faced changes in the economy and the development of international relations, which had to be re-established after the collapse of the Soviet Union. Since during the Soviet era, industry was not developed in the entire region, Georgia, for example, had to start developing minerals on its own, including:

• Coal deposits, which are estimated at more than 200 million tons.
• Oil reserves - 4.8 million tons.
• Natural gas - 8.5 billion m 3 .
• Manganese deposits occupy more than 4% of the world's reserves of this ore and amount to 223 million tons, which puts Georgia in 4th place on the planet in terms of its production.
• Among non-ferrous metals, copper is in the lead, of which there are more than 700,000 tons in the country, lead (120,000 tons) and zinc (270,000 tons).

In addition to the above, the country occupies a leading position among the CIS countries in terms of deposits, there are deposits of gold, antimony, cadmium, diatomite and other minerals. The main asset of the country is 2000 mineral springs, among which the most famous are Borjomi, Tskhaltub, Akhaltsikhe and Lugel.

Another pride of the Georgian people is the wines that are produced in the country. They are well known at home and abroad. National cuisine does not lag behind in popularity, which, according to the results of a special international jury, takes 5th place in the world.

Today Georgia is a prosperous country with the most developed tourism and resort business, winemaking, citrus and tea growing.

Armenia

This country has the least favorable geographical location, since it has no access to the sea, which somewhat affects its economy.

Nevertheless, if we take the Transcaucasus, the countries included in it, then it is Armenia that is the leader in mechanical engineering and the chemical industry. Most of the industry is engaged in the production of electronic and radio devices, machine tool and automotive industry.

It is not inferior to them and thanks to which copper, aluminum, molybdenum concentrate and precious metals are produced in the country.

The wine and cognac products of Armenia are well known abroad. IN agriculture figs, pomegranates, almonds and olives are grown for export.

A highly developed network of railways and highways allows the country to trade not only with its neighbors, but also with foreign countries.

Azerbaijan

If we take the countries of Transcaucasia, then Azerbaijan occupies one of the leading places in the extraction and processing of oil products and gas.

In this country, the richest deposits:

• oil on and offshore the Caspian Sea;
• natural gas at Karadag;
• iron ore, copper and molybdenum in Nakhichevan.

Most of the agriculture belongs to cotton growing, and viticulture occupies half of the gross turnover, which gives the whole of Transcaucasia. The countries of this region grow grapes, but Azerbaijan is the leader in this industry.

Despite differences in economic development, culture, religion and population, parts of this territory have something in common. This geographical position countries of the Caucasus, thanks to which their natural resources and climate have similar features.

Climatic zones of Transcaucasia

This region leads the world in terms of landscape diversity in such a small area. This is due to the fact that a significant part of the land in these countries is occupied by mountains (the Greater and Lesser Caucasus), and only a third is lowland. In this regard, land suitable for agriculture is extremely limited here.

The Suram Range divides the region into 2 climatic zones. Thus, this territory is subdivided into dry subtropics in the east and wet subtropics in the west, which affects the irrigation system and crops: in some regions there is an excess of water for irrigation, in others it is sorely lacking. Nevertheless, this did not prevent Georgia, Armenia and Azerbaijan from uniting in the Commonwealth of Subtropical Farming for growing tea, citrus fruits, bay leaves, tobacco, geraniums and grapes.

Population

If we take Transcaucasia as a whole (you already know which countries are included in it), then Armenians, Azerbaijanis, Georgians, Abkhazians and Adjarians will make up 90% of the population of the region. The rest are Russians, Kurds, Ossetians and Lezgins. Today, more than 17 million people live in this region.

Caucasus- geographical region on the border Europe And Asia. Limited to Black and Seas of Azov from the west, by the Caspian Sea from the east, Kuma-Manych depression from the north and south borders Abkhazia, Armenia, Georgia and Azerbaijan from the south.

Traditionally Caucasus divided into three regions: the Caucasus, North Caucasus And Transcaucasia. Territory Caucasus divided between Azerbaijan, Armenia, Georgia(incl. Abkhazia And South Ossetia) And Russia.

The Caucasus is not only a natural geographical boundary between Europe and Asia, the Near and Middle East, but also an ancient transport artery and a source of strategic natural energy resources - oil And gas.

Geographical position

The Caucasus is located on the border of Europe and Asia. From the north serves as a border Kumo-Manych depression, from the south - the southern borders of Georgia, Armenia and Azerbaijan. From the west it is washed by the Black Sea, from the east - by the Caspian Sea.

The territory of the region is about 440 thousand km².

Relief

The Caucasus is made up of five major landscape areas - Ciscaucasia, Greater Caucasus, Transcaucasian lowlands ( Colchis And Kura-Araks), Lesser Caucasus and Javakheti-Armenian highlands (north-eastern part Armenian highlands). In addition, in the extreme southeast, within the Caucasus, Talysh mountains, which are part Iranian highlands, and separating them from the Caspian Sea Lankaran lowland.

The Caucasus is located within the Alpine-Himalayan movable belt with active latest tectonic movements and is characterized by a variety of mountain relief. Located in the center of Ciscaucasia Stavropol Upland(highest point - mountain Strizhament, 831 m), separating Kuban-Azovskaya And Tersko-Kuma lowlands. In the south of Ciscaucasia in the interfluve Terek And Sunzhi there are two low mountain ranges - Tersky And Sunzhensky separated by the Alkhanchurt valley.

physical map

The mountain system of the Greater Caucasus is divided into West, gradually rising from Taman Peninsula before Elbrus(the highest point of the Caucasus, 5642 m), alpine Central(between Elbrus and Kazbek) And Oriental, decreasing from Kazbek to Absheron Peninsula. In the central part, the mountain system is strongly compressed, and in the west and east it is expanded. Its northern slope is long and gentle, while the southern slope is short and steep. Greater Caucasus Range shares North Caucasus And Transcaucasia. highest point Alps - Mont Blanc(4807 m) - inferior the peaks of the Caucasus: Mizhirgi (5025 m), Kazbek(5033 m), Dzhangi-tau(5058 m), Shkhara(5068 m), Pushkin Peak (5100 m), Koshtan-tau(5152 m) nearest five-thousander, highest point Asia Minor - Ararat(5165 m), inferior to the peaks: Dykhtau(5204 m) Elbrus(5642 m). All five-thousanders of the Greater Caucasus, excluding Kazbek and Shkhara in Georgia, are situated in Kabardino-Balkaria.

South of the Greater Caucasus are the Transcaucasian depressions, occupied by the swampy Colchis lowland in the west and the arid Kura-Araks lowland and Alazani plain in the east. The lowlands are separated by the submeridional Likhi Range, which connects the Greater and Lesser Caucasus.

To the south of the Transcaucasian lowlands is the Transcaucasian Highlands, which includes the Lesser Caucasus and the Javakhetian-Armenian Highlands. The Lesser Caucasus forms a 600-kilometer arc from a series of medium-altitude ridges 2000-2500 m high, separated by intermountain basins. Highest point- Mount Gyamysh (3724 m). The Javakheti-Armenian highland consists of volcanic plateau, dissected deeply embedded canyons, and plains at an altitude of 1500-200 m (?) with volcanic ridges rising above them, separated by intermountain depressions at an altitude of 700-1200 m. The highest point is a mountain Aragats(4090 m).

Elbrus

The Talysh Mountains consist of three longitudinal mid-altitude ridges up to 2494 m high (Mount Kymyurkoy), gradually descending to the narrow coastal strip of the Lankaran lowland, which, like the entire Caspian coast, lies 28 m below sea level.

The rise of mountains (up to 1.5 cm per year) and the lowering of lowlands (2-6 mm per year) cause an increased seismicity Caucasus (up to 10 points), especially in the northwestern part of the Javakheti-Armenian Highlands ( last catastrophic earthquake was there in 1988). Gatherings are active in the mountains glaciers, avalanches, mudflows, and landslides and rockfalls. Processes are characteristic on the plains deflation, suffusions and swamping. Widely developed karst, especially on Greater Caucasus (New Athos cave, Vorontsovskaya cave system, Snow abyss (one of the deepest in the world, 1370 m), karst plateau Lagonaki).

Caucasian region, which is subdivided into the North Caucasus and Transcaucasia, is located between the Azov and Black Seas on the one hand and the Caspian Sea on the other hand and is of geostrategic importance due to the fact that it not only serves as a meeting point between East and West, namely Central Asia and Europe, but more importantly between the northern and southern regions. The North Caucasus marks the southern border of Russia and the sanitary protection zone of Transcaucasia, which includes the independent republics of Armenia, Georgia and Azerbaijan.

The Transcaucasian republics of the CIS include three countries bordering on Russia: Azerbaijan, Georgia, and Armenia, which in the Soviet period constituted one Transcaucasian economic region. The largest republic in terms of area and population is Azerbaijan, the smallest is Armenia. The economic and geographical position of the Transcaucasian republics has now worsened. Several points of hostilities in this region caused irreparable harm to the entire economic complex. Now there is no direct railway connection from Georgia to Russia through Abkhazia, the complexity of Azerbaijan's relations with the Nakhichevan Republic, which is part of Azerbaijan, is caused by the Armenian-Azerbaijani conflict over Nagorno-Karabakh.

Industry of the countries of Transcaucasia. Now, as elsewhere in the CIS, in the republics of Transcaucasia, industries with their own resource provision have come to the fore. Azerbaijan is increasing its oil and gas production, attracting significant foreign investment for this. Georgia currently stands out as a major exporter of manganese ore and is also trying to re-establish ties with Russia in terms of selling wine and citrus to our market. Armenia, which is experiencing the most serious energy difficulties, was forced to restart the nuclear power plant that was closed after the Spitak earthquake (1988). This made it possible, to some extent, to restore the smelting of copper and molybdenum.

Agriculture. In Georgia, where a significant part of the plains is located in a humid subtropical climate, the cultivation of tea, citrus fruits, and tobacco has developed; in the Kura and Alazani valleys, significant areas are occupied by vineyards. Wheat, barley, corn are grown from field crops. Sheep are grazing in the mountainous regions. In Azerbaijan, the climate is much drier, which leads to the use of additional irrigation in agriculture for growing cotton, vegetables, grain crops. In the northern and western regions, as well as in Georgia, grapes are grown. Significant areas of semi-desert pastures are used for grazing fine-fleeced and astrakhan sheep. Armenia differs from the other two republics in more severe climatic conditions. Grapes here for the winter have to be sheltered from severe frosts, but due to the dryness of the climate, the grapes in the summer gain a lot of sugar, which makes it possible to produce cognacs. Vegetables and cereals are grown in the Ararat Valley, and there are many peach and apricot orchards on the slopes. Of the minerals, coal, oil, gas, alunites, and salts are found here. From metamorphic and igneous ores of iron, manganese, copper, molybdenum, polymetallic, as well as deposits of marble, tuff, pumice, arsenic and barite ores can be distinguished.

It is believed that Armenia is an economic outsider, a “poor relative” in the Transcaucasus, especially against the background of, at first glance, more successful and enterprising neighbors:

• Azerbaijan, which is constantly interested in investors with its oil reserves and thanks to this, has provided a more or less acceptable standard of living for its population;
• Georgia, whose "economic" miracle rests mainly on external "infusions", a number of reforms.

In 2009 Azerbaijan for the second time in recent history lost to Georgia and Armenia in terms of foreign direct investment (FDI), although it was the only one of the three countries where FDI increased.

According to the Asian Development Outlook (ADO) 2010 report prepared by the Asian Development Bank (ADB), last year FDI in the Azerbaijani economy increased from $15 million to $472 million, but the country was only the third largest in the South Caucasus for the second year in a row. In Georgia, which remained the leader, FDI fell from $1,523 million to $765 million, and in Armenia, from $925 million to $700 million. At the same time, the population of both Armenia and Georgia is 3 times smaller than that of Azerbaijan. In terms of GDP per capita, Azerbaijan does not surpass and even somewhat concedes to Armenia. According to the nature of the development of the economy, the “Armenian model” is more preferable, since traditional industries are simultaneously developing in Armenia. In terms of the structure of the block of heavy industries, Armenia is in many ways similar to Azerbaijan. However, the same industries that have been developed in Armenia are either liquidated or disoriented and in decline in Azerbaijan (organic synthesis, aluminum, electrical industry). In Azerbaijan, light industry has essentially been curtailed, while in Armenia this industry is developing at a faster pace and is mainly export-oriented. Over the past two years, Armenia has outstripped Azerbaijan in terms of economic and industrial development. After the end of the oil boom, real foreign investment in Azerbaijan began to give way to investment in Armenia. Georgia in terms of GDP per capita according to PPP in 2009 ($4,500) was in 149th place out of 228, behind it from the post-Soviet states only Kyrgyzstan, Moldova and Uzbekistan. In terms of economic indicators, Georgia today falls short of even half of its achievements in 1990, in neighboring Azerbaijan and Armenia this indicator is much better.

Armenia

The factors of the current negative impact on the Armenian economy, according to the experts of the Masterforex-V Trading Academy, include:

1) Foreign policy factor - unfriendly external environment e.

• The border with Azerbaijan has long been closed due to the Nagorno-Karabakh conflict;
• the transport corridor with Turkey practically does not work due to differences in the assessment of the Armenian genocide;
• exit to external world remained only through a small section of the Armenian-Iranian border, but even here everything is not easy, as you know, international sanctions have been imposed on Iran, which naturally limits bilateral relations. The main foreign policy problem of Armenia is the unsettled relations with Azerbaijan.
• the dependence of Armenia on Russia arising from an unfriendly external environment, which uses the Armenian-Azerbaijani conflict for its own purposes;
• the contradictions between Armenia and Georgia because of the Armenian-populated Javakhetia of Georgia as a potential small "Karabakh".

2) Negative socio-economic factors further development of Armenia, of course, more:

• the smallest of the republics of the former USSR, smaller than the Moscow region, moreover, without access to the sea;
• poor natural resources. There are small reserves of copper, zinc, molybdenum, gold, lead and bauxite. Hence the greater dependence on imported oil, gas, high technology with their market of reduced competition and from the export of metals, where competitors are at least a dime a dozen. * lack of transit potential and budget revenues from this source;
• lack of transit potential and budget revenues from this source;
• the collapse of the USSR, which practically killed the country's industry, which was 90% integrated into the all-Union economy. For Armenia, the liquidation of the USSR had simply catastrophic consequences. Today, enterprises (of course, those that survived) lack not only raw materials, but also markets.
• numerous disasters that befell Armenia, first of all, an earthquake with a magnitude of 7 points in 1988, which covered almost 40% of the territory of the republic, claimed at least 25 thousand lives and reduced production by a quarter;
• a military conflict over Nagorno-Karabakh with Azerbaijan, which ended in a blockade, because of which the Armenians found themselves without work, and at home without light and heat.
• mass emigration of the able-bodied population from Armenia.
• high concentration and monopolization of production and capital;
• inability to receive investments from the privatization of state property, because the industry is either collapsed or sold into private hands. All sold large enterprises countries;
• relatively low share of small and medium-sized enterprises in GDP, among which there are practically no manufacturing enterprises. Armenia ceases to be a country producing a product;
• huge trade imbalance, imports significantly exceed exports, disproportions between them increased from 2.9 times in 2000 to 4.7 times in 2009;
• the shadow economy in Armenia, according to experts, is 35-40%, and if you believe the opposition, then everything is 70%;

3) Political factor- instability of the political system.

Armenia is ranked 120th out of 180 countries according to the Transparency International Corruption Perceptions Index.

Crisis in Armenia: features of fall and rise

The government, of course, did not sit with its hands folded, analysts of the Masterforex-V Trading Academy clarify:

• government investments were increased in infrastructure, water supply and irrigation;
• small and medium-sized businesses were exempted from VAT and inspections;
• the main exporters were given interest-free loans.

Thanks to the measures taken, the country's economy, although slowly, but entered the stage of recovery. According to the CIS Statistical Committee, the leader in industrial production growth in the first half of 2010 was Kyrgyzstan - 41.8%, while Armenia was in second place - 12.3%, while in Azerbaijan only 3.5% growth. In terms of GDP growth among the CIS countries, Armenia is in fourth place - 6.7%, while Azerbaijan has 3.7%. GDP growth is expected to be 4% this year. The volume of foreign trade turnover in January-September this year increased by 23.6% compared to the same period in 2009. Obviously, the lower he fell, the higher he bounced.

Armenia's Potential for Future Investors

Armenia certainly has a development potential. In this regard, we can recall that from 2000 to 2009, the country's GDP grew by about 3 times, industrial production - by 2.2 times. During several pre-crisis years, Armenia demonstrated double-digit economic growth (in 2007, a record 13.8%). It is no coincidence that in the world rating of unstable (failed) states (failed states) by the American magazine Foreign Policy, Armenia took 101st place, while Georgia - 33rd, and Azerbaijan - 56th place (the lower the country in the ranking, the more stable).

Advantages and potential of Armenia:

• special relationship with Russia. There are 1,400 enterprises with Russian capital operating in the country, and in such strategic areas as energy, transport and communications.
• diaspora or, as the Armenians themselves say, “national cohesion Armenian people in the world".
• geostrategic position. Armenia is located at the crossroads of routes connecting the countries of the East and West, trade routes between the Near and Middle East and Europe, therefore it is considered as a transcontinental state;
• Armenia is the only one of the 5 countries in the region that has a nuclear power plant;
• tourism. The country attracts many with its pristine beauty, which is only worth Lake Sevan with the famous trout, the ancient monastery of Etchmiadzin or ski resort Tsaghkadzor.
• highly qualified personnel.

The most attractive sectors of the economy for investment.

Quite promising, according to the experts of the Masterforex-V Trading Academy, are:

• gold mining projects
• diamond cutting,
• tourism,
• information technology industry,
• projects for the construction of large metallurgical plants.

The country is going to develop transport infrastructure, plans to build railways and highways to connect Iran with the ports of Georgia. In general, Armenia, with its great investment potential, can become a trade and economic bridge connecting neighboring countries, moreover, a regional financial center.

But investors should keep a number of risks in mind when making decisions:

• Armenia's dependence on global processes,
• the country is vulnerable in terms of internal political stability, the radical opposition, after a long break this year, reasserted itself,
• lack of liquidity in banks,
• the infancy of the Armenian stock and currency markets,
• "oligarchic structure" of the economy. The oligarchs control imports, have monopolized the most important sectors of the economy,
• Armenia's tax system is not so much complicated as confusing. VAT plays a key role in the tax revenues of Armenia (in January-May of this year - 50.6% of the total amount of taxes received by the state budget), and this tax is undifferentiated;
• in the tax and customs areas, there are problems with transparency and equal conditions for entrepreneurs. Attempts by the government to carry out a soft tax reform in order to redirect part of the shadow capital to the state budget, while blocked,
• social orientation of the country's economy. Costs for social sphere in the state budget for 2011, unprecedented ones are planned - an increase in social benefits by 15%, pensions - by 10%, etc. Social spending will amount to more than 27%.

But still Armenia is a fairly liberal state, whose authorities strongly encourage foreign investors:

• more or less favorable investment climate,
• there are no restrictions on the movement of capital,
• sufficient stability of the banking system,
• the institution of property rights is strong.

According to the World Bank, according to the ease of doing business index, Armenia ranks 43rd (7 points higher than in 2009):

• in the field of property registration (5th place),
• founding a new business (21st place),
• in the field of obtaining loans (43rd place), although in the “Investor Protection” index it moved from 5th place to 93rd,
• in the field of paying taxes (153rd place). In the annual ranking of economic freedom, prepared by the experts of the Heritage Foundation analytical center, although Armenia has fallen from 31st to 38th place, it is significantly higher than neighboring Azerbaijan (96th).

And, finally, for post-Soviet investors, it is of no small importance to geographic proximity of Armenia, lack of visas, post-Soviet mental closeness and knowledge of the Russian language.

Azerbaijan

Economic overview

During Soviet period, Azerbaijan has always been more industrialized than Armenia and Georgia, and also less diversified, as a result of the slow flow of investment in the oil sector. Since then, for many months we have been hearing that the economy of Azerbaijan is getting better and better every day.

Economy of Azerbaijan for almost 70 years it developed as part of the economy of the USSR, with a focus mainly on the Russian market. The main sectors of the economy were the oil-producing and oil-refining industry and agriculture. In the 1960s-1980s, engineering, chemical, textile, food and other industries developed in the republic. The war in Karabakh and political instability led to a significant drop in production in 1988-1994. After the conclusion of the Armenian-Azerbaijani agreement on a ceasefire in the conflict zone in May 1994 and the stabilization of the political situation, the economic decline was stopped. For over a century, Azerbaijan's economy has been based on oil, which made up 10 percent of Azerbaijan's GDP in 2005 and doubled to almost 20 percent of GDP in 2007. Now that Western oil companies are able to unearth deepwater fields untapped by the Council because of poor technology, Azerbaijan is considered one of the world's most important oil production and development areas. The proven oil reserves in the Caspian Basin, which Azerbaijan shares with Russia, Kazakhstan, Iran and Turkmenistan, are comparable to the size of the North Sea, although research is still in its early stages. Azerbaijan has concluded 28 production sharing agreements with various oil companies. A new pipeline and delivery route system for natural gas along the southern corridor to Europe is currently being considered and negotiated. In the late 1990s, in cooperation with the International Monetary Fund (IMF), Azerbaijan pursued a successful economic stabilization program, with an annual growth of over 10% since 2000. In 2009, the gross domestic product in Azerbaijan grew by 9.3%, with growth in 2010 estimated at 9.8%.

Azerbaijan and international organizations

At present, Azerbaijan has trade relations with 140 countries of the world, is a member of a number of international economic organizations, including the process of joining the World Trade Organization. December 21, 1991 Azerbaijan joined the Commonwealth of Independent States (CIS). March 2, 1992 he was admitted to the UN, and later joined other international organizations. Azerbaijan has the status of an invited member of the Council of Europe and is a member of the European Bank for Reconstruction and Development (EBRD), the International Bank for Reconstruction and Development (IBRD), the Organization of the Islamic Congress (OIC), the OSCE, the NATO Partnership for Peace program, the World trade organization (WTO) with observer status, etc.

The main industries of Azerbaijan

Azerbaijan is an industrial-agrarian country with highly developed industry and diversified agriculture. The metallurgical, chemical, and light industries are developing rapidly. In the beginning. 21st century Azerbaijan's economy is mainly oriented towards raw materials. This applies not only to industry, but also to agriculture, where the area under industrial crops (for example, tobacco, cotton) has significantly decreased.

The most important place in the economy of Azerbaijan is occupied by:

• oil and gas industry,
• oil refining industry,
• chemical industry (mineral fertilizers, synthetic rubber, car tires, etc.),
• engineering industry,
• mining industry (extraction of iron ore and alunite) and non-ferrous metallurgy,
• food industry (canning, tea, tobacco, wine),
• light industry (cotton ginning, cotton, silk, woolen, carpet weaving)

Azerbaijan's oil and gas reserves are attractive for foreign oil companies.

The second most important sector is agriculture. Agricultural land accounts for 46% of the country's total area (about 4 million ha), half of which is occupied by pastures. They grow grain, industrial (cotton, tobacco), subtropical (pomegranate, tea, citrus, persimmon) crops, grapes. Natural silk is produced.

Azerbaijan business environment

Azerbaijan has made efforts to modernize and reform the economy. The World Bank named Azerbaijan a “reform leader” in its Doing Business 2009 report, reflecting its significant efforts to simplify domestic regulations. The government has adopted regulatory reforms in some areas, including a significant opening up of trade policy but inefficient public administration in which commercial and regulatory interests are merged and limit the impact of these reforms. The government has largely completed the privatization of agricultural land and small and medium enterprises. Azerbaijan still suffers from arbitrary tax and customs administration, a lacking independence of the judiciary, monopolistic market regulation, and systemic corruption. Business registrations increased by 40% in the first 6 months. Azerbaijan also eliminated the minimum loan cut-off of $1,100, more than doubling the number of borrowers covered by the credit registry. In addition, taxpayers can now apply and pay their taxes online. Azerbaijan's extensive reforms have taken it far from 97 to 33 in the global ease of doing business rankings.

Investments in Azerbaijan

A certain stability in the country and a long-term truce in the Karabakh conflict zone allows Azerbaijan to attract foreign investment for the development of oil production and transportation. Azerbaijan leads among the CIS countries in terms of foreign investment growth (from 10 to 50% per year). Since the second half of the 1990s, there has been an increase in capital investments in various sectors of the economy, primarily at the expense of extrabudgetary funds. For the period from 1996 to 2000, the amount of foreign investment amounted to $ 5 billion. Up to 50% of foreign investment goes to the development of engineering, communications, the food industry, the service sector, etc.

Major foreign investors. The Azerbaijani government has signed several important agreements on the development of oil and gas fields.

Azerbaijan's natural resources are the most important factor of investors' interest, the main part of which was poorly studied due to lack of material resources and outdated technological equipment. Attraction of foreign capital is to a certain extent determined by the interest of the Azerbaijani side in the implementation of large investment projects In this connection, it is legitimate to note the participation of large transnational corporations (TNCs) in the investment process in Azerbaijan. In general, for last years portfolio investments in the economy of Azerbaijan have noticeably increased; today more than 20 large investment institutions have settled in Azerbaijan.

Main industries for investment:

1. investments in the oil sector 51.5%;
2. Investments in industry amounted to AZN 194.8 million (-25.1%);
3. investment in electricity, gas and water sectors (AZN 50.8 million, +5.6 times);
4. agricultural sector (AZN 11.4 million, 3-fold growth);
5. housing construction (AZN 24.7 million);

Investments in the transport sector, warehousing and communications sector (AZN 25.8 million).

Stable political and economic conditions have been created in the country. The most important comparative advantages of the Azerbaijani economy are the following:

• Azerbaijan is rich in natural resources, especially hydrocarbons;
• The level of education of the population is quite high, almost half of the population of the corresponding age has a technical or higher education, the rest of the population mainly has a secondary education. The level of qualification of scientists, engineers, doctors, teachers, etc. is high;
• Azerbaijan has a developed infrastructure, including a developed road network, basic irrigation systems, a good railway network, significant power generation capacity, and cable telecommunications.

Legislative base of Azerbaijan

The country is constantly working to create a favorable investment climate. A number of measures are being taken to improve the legislative framework. Draft laws “On investment activity” and “On special economic zones” have been prepared. Legislative base The tax system in the country is the Tax Code of the Republic of Azerbaijan, which entered into force on January 1, 2001.

IN Lately The following changes have been made to the tax system:

• Income tax for enterprises and organizations reduced from 35% to 25%;
• Value added tax reduced from 28% to 18%;
• The maximum level of taxes levied on the income of individuals has been reduced from 55% to 35%; Social insurance payments are reduced from 40% to 27%;
• The total number of taxes has been reduced from 15 to 9;
• Since 2001, entrepreneurs engaged in agriculture have been exempted from all types of taxes for a period of 3 years, with the exception of land tax;
• Since 2003, in order to further encourage the development of entrepreneurship in the regions of the country, differentiated income tax rates have been applied.

In order to eliminate double taxation and mutually encourage and protect investments, Azerbaijan has signed a number of agreements with foreign countries, including France, Austria, Great Britain, Norway, Turkey, Kazakhstan, Moldova, Russia, Ukraine, Georgia, Uzbekistan, Belarus.

Until recently, foreign investment has been very successful, mainly in the oil sector. In the oil sector, the most active foreign investments were made in the development of industrial and social infrastructure, urban economy. Large investments in construction were made by Turkish companies.

Currently, the strategic priorities for investing in Azerbaijan are:

• Investments in the processing of increasing volumes of agricultural products;
• Investments in the creation of highly efficient infrastructure, in particular in the energy sector, telecommunications services, water and gas supply systems;
• Investments in the expansion and renewal of industries serving the oil sector;
• Considering Azerbaijan's colossal gas production potential, gas-based industries are developing promisingly. Oil revenues countries are considered as a source of long-term and stable development of the country's economic potential. Therefore, Azerbaijan's income from oil exports is accumulated in the Oil Fund. The government attaches particular importance to the development of the oil sector with the attraction of foreign capital. Foreign investment is considered as a means of import modern technologies, increasing the competitiveness of the Azerbaijani economy.

Georgia

In recent years, Georgia has become a dynamically developing country with one of the highest growth rates in the world (in the best year of 2007, according to the IMF, the GDP growth rate was more than 12%, of course, the starting point was practically zero). If in 2003 the state budget of Georgia was only $400 million, then in 2009 it was $4 billion. ".

Among the most important components of Georgian changes:

1) sharp liberalization of its economy– the state regulation of all spheres of life was really minimized in the country. Under this policy:

2) fight against corruption:

• a total purge and reduction of the state apparatus (by 20%) was carried out, which simultaneously made it possible to significantly raise salaries, for example, to the minister, by 15-20 times;
• the rights and powers of officials of the state apparatus of Georgia have been significantly narrowed and liquidated;
• hundreds of officials (mayors, governors, ministers, judges) were arrested for corruption, and this happened in public, in front of television cameras. At the same time, they were not particularly worried about the “presumption of innocence” and allowed them to simply pay off (!) From punishment;
• reforming the traffic police;
• reform of the Ministry of Internal Affairs, carried out by analogy with the reform of the traffic police. The country has become the least criminalized and corrupt in the region. Moreover, according to Transparency International, Georgia is the leading country in the post-Soviet space (with the exception of the Baltic countries).

• the majority in parliament, moreover, the constitutional one, is controlled by the pro-presidential United National Movement party;
• the authorities absolutely control the judicial system of the country;
• opposition, hopelessly divided into whole line small parties fighting each other and hating each other is nothing serious;
• persecution of dissenters. The opposition claims that Georgian prisons are now overflowing with political prisoners;
• power control over television and the media;
• harsh criminal law;
• 11% of the state budget, going to the needs of the Ministry of Internal Affairs .;
• and finally, amendments to the constitution have already been prepared, according to which the powers of the President in 2013 should be transferred partly to the parliament, partly to the president.

Benefits of Georgia for an investor

We have to admit that although the country has gone ahead in terms of the quality of the investment climate compared to many post-Soviet countries, investors are still wary of investing serious money in Georgia. Meanwhile, the World Bank names Georgia as one of the most open countries for foreign investment. According to the Economic Freedom Index, Georgia ranks 26th out of 183 countries. Georgian economists are confident that this year's GDP will exceed 6%. These facts are an important incentive for potential investors. For their more active participation in the Georgian economy, the authorities promise:

• introduce preferential taxes for IT companies: foreign companies will pay taxes in the minimum amount;
• to develop a fairly forgotten, but potentially profitable source of income - tourism. Ambitious plans have already been announced - to attract five million tourists in a few years. In the meantime, dilapidated, ruined camp sites and sanatoriums need serious investments;
• draw attention to the advantageous geographical location of the country as an important economic asset. Indeed, arteries connecting East and West, Asia and Europe pass through Georgia, it is an important link in many transit projects - NABUCCO, transportation of liquefied and compressed gas;
• given Georgia's significant water resources, the country could turn into a cheap electricity producer.

According to the preliminary data of the Statistics Service of Georgia (Sakstati), which were published on December 14, the inflow of foreign direct investment in Georgia in the third quarter of 2010 decreased by 7.3% compared to the same period last year and amounted to 160.4 million US dollars. As a result, the volume of investments for January-September 2010 amounted to 443 million US dollars, which is 6.6% less than the same period for last year. In the third quarter of 2010, most foreign direct investment in Georgia came from the Netherlands - $27.9 million; Followed by the United States - 21.6 million dollars; Russia - $18.6 million, Azerbaijan - $16.2 million and UAE - $13.5 million. Most of the foreign direct investment - 49.7 million US dollars (31%) in the third quarter was attracted by the financial sector; The following are the areas of the transport and communications industry - 40.5 million US dollars (25%); real estate - $33.6 million (21%) and the energy sector - $16 million (10%).