Azerbaijan Faces Diverse Challenges: From Agricultural Woes to Demographic Shifts and Geopolitical Tensions

Azerbaijan is grappling with a range of internal and external challenges, as highlighted by recent reports covering agricultural struggles, social welfare concerns, demographic shifts, economic fluctuations, and ongoing political and security developments.

Agricultural Sector Struggles Amidst Abundance 

Farmers in regions like Xaçmaz, Quba, and Masallı are reportedly dumping their produce due to difficulties in selling it. While the Ministry of Agriculture claims expanding cultivated areas and increased production lead to an oversupply, agricultural expert Vahid Məhərrəmli attributes this chaotic situation, which has persisted for years, to a lack of ministry support. Local farmers struggle to sell their products to large supermarkets, and the main wholesale market, "Meyvəli," reportedly refuses to buy produce at the farmers' asking prices. Məhərrəmli stresses the need for the ministry to assist farmers from cultivation to sale, including providing quality seeds, fertilisers, irrigation systems, and preventing harassment by police during transport. This issue resonates with broader agricultural concerns, as despite over 2.2 billion manats in state budget subsidies for producers between 2020-2024, there's an observed mismatch between subsidy amounts and production volumes. Subsidies for certain plant species have increased, yet production has decreased, failing to achieve corresponding output levels. Furthermore, while the harvest area for autumn-spring grain and leguminous crops decreased by 5.7% compared to the previous year, overall production increased by 1.2%. However, wheat harvest specifically dropped by 5.8%. Farmers also noted an increase in harvesting costs, with service fees per hectare rising by approximately 5 manats after diesel fuel prices increased in July last year.

Social Welfare and Demographic Concerns 

The number of recipients of targeted social assistance (ÜSY) has increased over the past year, but the average monthly amount per person has decreased. As of 1 July 2025, 80.3 thousand low-income families, comprising 353.3 thousand members, received ÜSY, with an average of 100.37 manats per person. This contrasts with 1 July 2024, when 61.5 thousand families (266.3 thousand members) received an average of 109.6 manats per person. Historically, there was a sharp decline in ÜSY recipients in earlier years, with 120.3 thousand families receiving aid on 1 July 2017, compared to 64 thousand families by the end of 2023.

Azerbaijan is also experiencing a rapid decline in its birth rate, which has dropped by 6.3% in the first half of 2025 compared to the same period last year. The birth rate per 1000 people fell from 9.6 to 9.0. Over the last decade, the birth rate has decreased by a striking 60%. Although the overall population continues to grow slightly, the pace of birth rate increase is slowing. The prevalence of boys among newborns (53.3%) compared to girls (46.7%) is attributed to selective abortions, and there has been a significant increase in abortion rates in recent years. Independent economists suggest that social factors, such as real inflation eroding wage increases, also contribute to the declining birth rate, alongside the abolition of monthly child benefits in Azerbaijan in 2006.

Another significant demographic trend is the decreasing percentage of youth in the Azerbaijani population. Youth, defined as individuals aged 14 to 29, constitute 22.5% of the population, with 52.9% living in cities and 47.1% in rural areas. This percentage has generally declined over the last 15 years, with some exceptions. Disturbingly, the number of young people diagnosed with cancer has increased over the past 15 years, rising from 218 in 2010 to 393 last year.

Economic Indicators and Trade Relations Azerbaijan's economic landscape presents a mixed picture. The average export price of Azerbaijani oil was 73.8 US dollars per barrel in the first half of 2025, which is 5.4% above the budget's projected price of 70 US dollars. However, this marks a decrease from over 77 dollars in the first quarter of 2025. Independent economists warn that a continued drop in oil prices could pose problems for the state budget, as oil and gas account for 90% of Azerbaijan's exports. Efforts towards economic diversification in the non-oil sector have not yielded significant success since the sharp fall in oil prices in 2014.

Trade relations show varying trends. Trade turnover between Azerbaijan and Turkmenistan significantly decreased, almost by half, from 390.2 million US dollars in 2023 to 383.7 million US dollars in 2024. This decline continued into the first seven months of the current year. Conversely, trade between Azerbaijan and Russia continues to increase despite recent political tensions. In the first seven months of this year, Azerbaijan exported 721.2 million dollars worth of goods to Russia and imported 2.35 billion dollars, solidifying Russia's "bread-giver country" status for Azerbaijan.

The automotive sector reveals an interesting dichotomy: car imports increased significantly by 23.9% in quantity and 24.1% in value in the first seven months of 2025 compared to the previous year. Simultaneously, domestic car production decreased by 12.7%, with 2,292 fewer passenger cars produced. Experts argue that Azerbaijan's car production is more akin to assembly, with most parts imported, and that high customs import duties are used to protect the domestic market.

Legal, Political, and Security Developments Several high-profile legal cases have been reported. The preparatory session for public activist Əhməd Məmmədli's criminal case was held on 21 August, where the court rejected a motion to drop the case and replace his detention with house arrest. Məmmədli, who faces charges of intentionally causing serious harm to health and hooliganism, denies the accusations and links his arrest to his former socio-political and current journalistic activities. Similarly, the detention period for Hacı Vəliyev, chairman of the now-defunct "Gənc Qazilər" Public Union, was extended by another 20 days. Vəliyev, arrested in April, faces charges related to hooliganism using weapons and intentional destruction of property. He was known for criticising issues faced by war veterans and their families. The wife of imprisoned "Xəbərman" website head, Polad Aslanov, alleges that the results of her husband's medical examination, conducted in July, are being deliberately delayed, despite an oral report of liver problems. Aslanov, serving a 13-year sentence for treason, denies the charges and attributes his arrest to his journalistic work.

A major fire at the "Sədərək" Trade Centre on 24 August was finally extinguished on the afternoon of 25 August, leading to a criminal investigation. The fire, described as complex to extinguish due to a synthetic storage zone, caused 12 people to seek emergency medical help for smoke inhalation. This is not an isolated incident, as "Sədərək" has experienced numerous fires in recent years, with previous larger incidents leading to complaints about uncompensated losses.

Amidst these internal affairs, Azerbaijan's military conducted a tactical exercise with live firing in the Caspian Sea on 14 August, focusing on the protection and defence of marine energy infrastructure. This exercise occurred during a period of strained relations with neighbouring Russia, marked by Russian operations against Azerbaijanis in Russia and arrests of Russian citizens in Azerbaijan. The situation has also seen criticism from Russia and Iran following a joint declaration signed by Azerbaijan, the US, and Armenia concerning unhindered communication between Azerbaijan and Nakhchivan via Armenia.

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