Click to see a larger map

Situated on the west coast of the Caspian Sea, Azerbaijan was the first Soviet republic to declare independence. The issue of the disputed enclave of Nagorno Karabakh, whose Armenian population seeks secession, led to full-scale war (1988–1994) and is still a dominant concern. Over 200,000 refugees, and more than twice as many internally displaced, added to the problems of the troubled economy. Azerbaijan's oil wealth, however, gives it long-term potential.