Azerbaijan has been the fastest growing economy of the world and it increasingly attracts the interest of foreign investors. This paper analyses the Azerbaijani economy in transition from communism to capitalism over the past decade with a focus on investment climate. Facts and figures of the apparent economic miracle are presented and a number of political obstacles considered. Azerbaijan's transition towards a market economy has not gone very far and it is mainly slowed down by low levels of trust and high levels of corruption. There are also human rights issues and freedom or press is limited. Unless and until Azerbaijan deals with these problems, shadows will continue to loom over its economic miracle.
Revised version of a paper presented at the seminar on "Economic Transition in Azerbaijan and Relations with Italy", Rome, 29 May 2012. Paper produced within the framework of the project "Azerbaijan, Caucasus and the EU: Towards Close Cooperation? ".
1. The economic miracle in facts and figures
2. Obstacles for economic transition