Pre-20th-Century History

Azerbaijan has been inhabited for at least 3000 years, and probably a lot longer than that. Some theories even place the Garden of Eden in southern Azerbaijan (now part of Iran). Bronze Age settlements have been found in and around Baku. Scythians settled in the area in the 9th century BC, followed by the Medes, followers of Zoroastrianism. The Archaemenid Persians took over half the country 200 years later. Azerbaijan's decision to back Alexander the Great's Greek attack on Persia in 330 BC meant that it drifted into the Seleucid then Parthian empires, which fought interminable wars with the Romans, who finally marched all the way to Qobustan in 66BC. By the 4th century the area had been extensively Christianised.

With a series of Muslim-Arab invasions and the arrival of several waves of Turkic tribes (the ancestors of today's Azerbaijanis), that soon changed. Beginning around 1050, the country enjoyed a cultural renaissance, and achieved many of its greatest architectural and artistic achievements. However, this was crushed by the brutal arrival of various Mongol and Central Asian armies, from Genghis Khan to Tamerlane.

Following centuries saw a three-way struggle between Russia, Turkey and Persia that finally ended in 1828, when Russia and Persia definitively divided Azerbaijan along the Araz River. The south remains in Iran. During the period of Russian rule, many Armenian Christians emigrated from their traditional lands in (what is now) eastern Turkey to the relative safety of the Russian empire, creating a future political time bomb, notably in Azerbaijan's Nagorno-Karabakh region where they slowly came to form a majority. Meanwhile, Azerbaijan's economy grew in relation to Russia's. The region was a participant in the birth of the modern petroleum industry. The first oil well was drilled in 1848, and the first oil refinery constructed in 1859. Azerbaijan provided Russia, and later the Soviet Union, with crude oil, chemicals, textiles, food and wine.

The denationalisation of the oil industry in 1872 changed Baku from a dusty backwater to a wealthy and sophisticated city, attracting European investors (including the Rothschilds) and accounting for more than half of the world's oil production by the end of the century. But labour exploitation made Baku a political hotbed - it's here that Stalin cut his political teeth.

Modern History

Azerbaijan had a brief taste of independence in 1918 but was invaded in 1920 by the Red Army. The Russians had a harder time recapturing Armenia, and as a sweetener to persuade the Armenian resistance to back the Bolsheviks, parts of Azerbaijan were handed to the Armenians; this left Naxçivan bizarrely disconnected from the rest of Azerbaijan. Only the desperate insistence of Azeri statesman Nariman Narimanov prevented Nagorno-Karabakh also being passed on to Armenia; at the last minute Stalin decided to make it an autonomous province within Azerbaijan.

After the brief Soviet occupation of northern Iran during WWII, the Iranian government crushed the nascent independence movement that had been started there by ethnic Azerbaijanis. Although Hitler had (just) failed to reach Baku, WWII was a severe shock that convinced the Soviets that it was too risky to rely on Azerbaijan for its oil. So over the 1960s and 70s Baku's oil industry was not greatly developed. During 1988, with Gorbachev preaching perestroika and Soviet power waning, Nagorno-Karabakh's now-majority Armenian population started demanding a transfer to Armenia. Azerbaijan reacted heavy-handedly by removing Nagorno-Karabakh's autonomous status. A spiral of communal attacks spiralled into general conflict. This finally resulted in a virtual ethnic cleansing as Azeri-Armenians and Armenian-Azeris fled their homes wherever they were in the minority, fearing ethnic violence. In Nagorno Karabakh there was virtually a full-scale war, both sides taking the upper hand at times. Overall the Armenians gained the upper hand, handing a string of defeats to the Azerbaijanis that caused the resignation of two presidents. By 1993, the conflict had created thousands of casualties and about one million refugees.

Although a cease-fire in 1994 stemmed the worst of the blood-letting, the conflict remains far from resolved. Some 15% of Azerbaijan remains under Armenian occupation. Nagorno-Karabakh has declared itself a republic and has little interest in giving back any territory to Azerbaijan, including the narrow strip of land connecting Karabakh with Armenia proper. Even in traditionally multi-cultural, open-minded Baku the issue inspires black passions that could easily be whipped up into a new anti-Armenian war should politicians be so misguided.

Azerbaijan's other major preoccupation has long been, and remains, oil. The Caspian region is reputed to hold about 100 billion barrels of oil and about as much natural gas, and Azerbaijan has laid claim to much of it. Azerbaijan's State Oil Company spent the 1990s making deals left and right with foreign developers for exploration and production. As a result, Baku gained the buzz of a boom town, with the first oil coming ashore in 1997.

Recent History

After a very wobbly war-torn independence, Azerbaijan's stability was restored by the iron hand of its wily old Soviet-era ruler, Heydar Aliyev. His ability to pull the country together again won him hero status locally, though his lip service to democracy didn't encourage similar admiration abroad. Heydar Aliyev died in October 2003, but by that time he'd managed to ensured a mostly smooth - if legally dubious - transition of power to his son, Ilham.

For Western investors, then building the multi-billion oil-pipeline to Turkey (via Georgia), Azerbaijan's stability counted for more than the niceties of election transparency. The pipeline finally came on-stream in 2006. Although reportedly US$1 billion over budget, the facility will allow Azerbaijan easier export opportunities for its considerable oil reserves. A further gas pipeline is under construction. How much the nation benefits will depend a lot on how much institutional corruption is allowed to siphon off the revenues. Until 2004 Azerbaijan regularly featured on Transparency International's list of the world's ten most corrupt nations. Recently, however, there has been a slight improvement.

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