During the reporting period, Azerbaijan saw a further consolidation of power within the ruling family. President Ilham Aliyev replaced senior officials with younger loyalists, enhancing the government’s political coordination abilities but solidifying the ruling family’s monopoly over the economy and politics.
Azerbaijan’s economy benefited from rising oil and gas prices, bolstering its role as an energy exporter and potential transport hub. Agreements with the EU focused on promoting renewable energy export potential. Despite intensified diversification efforts, oil and gas remained the dominant part of exports and GDP.
Post-war reconstruction of territories previously occupied by Armenia became a top government priority. President Aliyev unveiled plans in January 2021 for reconstructing settlements. The lack of comprehensive peace with Armenia led to persistent military clashes, with a significant escalation in September 2022, causing casualties on both sides. The presence of Russian troops and geopolitical competition complicated peace efforts.
