(1997 est.)

Military expenditures - dollar figure: $2.1 billion (1995)

Military expenditures - percent of GDP: 1% (1995)

Transnational Issues

Disputes - international: none

Illicit drugs: transshipment point for Southwest Asian heroin and
South American cocaine destined for Western Europe
______________________________________________________________________

AZERBAIJAN

Introduction

Current issues: Azerbaijan continues to be plagued by an unresolved
nine-year-old conflict with Armenian separatists over its
Nagorno-Karabakh region. The Karabakh Armenians have declared
independence and seized almost 20% of the country's territory,
creating almost 1 million Azerbaijani refugees in the process. Both
sides have generally observed a Russian-mediated cease-fire in place
since May 1994, and support the OSCE-mediated peace process, now
entering its fifth year. Nevertheless, Baku and Xankandi (Stepanakert,
Nagorno-Karabakh region) remain far apart on most substantive issues
from the placement and composition of a peacekeeping force to the
enclave's ultimate political status, and prospects for a negotiated
settlement remain dim.

@Azerbaijan:Geography

Location: Southwestern Asia, bordering the Caspian Sea, between Iran
and Russia

Geographic coordinates: 40 30 N, 47 30 E

Map references: Commonwealth of Independent States

Area:
total: 86,600 sq km
land: 86,100 sq km
water: 500 sq km
note: includes the exclave of Naxcivan Autonomous Republic and the
Nagorno-Karabakh region; the region's autonomy was abolished by
Azerbaijani Supreme Soviet on 26 November 1991

Area - comparative: slightly smaller than Maine

Land boundaries:
total: 2,013 km
border countries : Armenia (with Azerbaijan-proper) 566 km, Armenia
(with Azerbaijan-Naxcivan exclave) 221 km, Georgia 322 km, Iran (with
Azerbaijan-proper) 432 km, Iran (with Azerbaijan-Naxcivan exclave) 179
km, Russia 284 km, Turkey 9 km

Coastline: 0 km (landlocked)
note: Azerbaijan borders the Caspian Sea (800 km, est.)

Maritime claims: none (landlocked)

Climate: dry, semiarid steppe

Terrain: large, flat Kur-Araz Lowland (much of it below sea level)
with Great Caucasus Mountains to the north, Qarabag (Karabakh) Upland
in west; Baku lies on Abseron (Apsheron) Peninsula that juts into
Caspian Sea

Elevation extremes:
lowest point : Caspian Sea -28 m
highest point: Bazarduzu Dagi 4,485 m

Natural resources: petroleum, natural gas, iron ore, nonfer