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Azerbaijan: Coping With The Oil Windfall

From the minute you arrive in Baku, you can smell the oil.

In a glass jar it looks nothing like the black viscous substance one would expect, but more like petrol. Experts praise Azerbaijani oil as among the best in the world.

Overheat Concerns

But the oil does have a dark side. According to a recent report by the European Bank of Reconstruction and Development (EBRD), Azerbaijan is one of the world's fastest-growing economies with over 26 percent growth.

However, local officials admit the economy could "overheat." Azerbaijan remains an economy in transition whose long-term future can only be secured by means of a viable non-oil sector. And the question many are asking is how, in a country where corruption is so rampant, is that money going to be spent?

Clare Bebbington, a spokeswoman in Baku for multinational oil company British Petroleum (BP), which is Azerbaijan's main partner in tapping the oil wealth, describes managing this wealth as an "enormous opportunity," but also an enormous challenge.

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Azerbaijan: Coping With The Oil Windfall

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