April 1999

by Judith Robinson

Despite the Russian and Asian financial crises and the drop in world oil prices, U.S. trade turnover with Azerbaijan nearly doubled in 1998 to US$127.3 million, from US$67.7 million in 1997. Azerbaijan widened its negative trade balance with the United States, importing $122.3 million worth of goods and services, while exporting only $4.9 million worth, for a negative balance of $117.5 million. The purchasing power behind these Azer-baijani imports continued to be supplied, in significant part, by foreign investors members of the 15 (as of January 1, 1999) international consortia active in Azerbaijan's oil and gas sector and their subcontractors, and companies engaged in essential infrastructure construction.

U.S. machinery and parts exports, mostly bound for the oilfields or heavy construction sites, were valued at $26.2 million in 1998, up from $21.9 million in 1997. The purchase of such machinery tends to be viewed as investment in Azerbaijan's future that is, in the oil and gas earnings that are to fuel national development in the next decade.

The year 1998 also saw a sudden jump in Azeri purchases of U.S. tobacco products, which captured first place among U.S. exports at $66.5 million from third place at $7.2 million in 1997. Meat remained a leading U.S. export to Azerbaijan, increasing from $4.5 million in 1997 to $5.6 million in 1998. Exports of electrical machinery and optical/medical equipment fell from $12.3 to $6.6 million, but tools/cutlery grew from $0.56 to $2.9 million.

Judith Robinson covers Azerbaijan for BISNIS in Washington, D.C.

This report is provided courtesy of the Business Information Service for the Newly Independent States (BISNIS)