According to the payment balance of Azerbaijan in the first half of 2005 the foreign trade turnover has increased on 53.1% up to $4947.6 mln. At the same time the volume of import increased from $1552.5 mln to $2126.3 mln and volume of export - from $1678.5 mln to $2821.3 mln.

According to calculations of the National Bank of Azerbaijan in case of import the growth on 49.1% is guaranteed at the expense of pricing factor and on 50.9% at the expense of physical volume, in case of export on 73.1% at pricing factor and on 26.9% at the expense of physical factor.

According to commodity analyses of the export and import operations' structure their growth occurred mainly at the expense of oil and gas sector. Import of machinery, equipment and other commodities of investment character increased on 50%, and export of oil sector increased in 1.8% time up to $2496 mln.
In geographical structure of foreign trade 19% fell on the share of CIS countries. Russia, Singapure, Turkey, Iran, United Kingdom, Turkmenistan, Germany, France and China were the main trade partners of Azerbaijan in the first half of the year, which made 77.4% of total cost of export and import operations.

Turnover of mutual services in economic relationship of Azerbaijan with foreign countries in the first half of the year made $1624.9 mln: import of services - $1315.3 mln, and export - $309.6 mln. Volume of construction, assembly and other services have rendered by non-residents in oil and gas sector made for the account period $824.8 and this corresponds 82% of deficit of balance of services.

Volume of foreign capital received for investing on the territory of Azerbaijan has made $2378.5 bln for the first six months of the year which is 2.3% less than the figure of corresponding period of 2004. At the same time, outflow of capital abroad increased on 20.3% to $1469 mln. $940.8 mln out of it fell to the share of repatriated direct investments of foreign companies.

Volume of direct investments into the oil and gas sector decreased from $2201.4 mln to $1973.3 mln, into other sectors increased from $45.8 mln to $62.4 mln. Volume of credits and other investments increased from $230.4 mln to $405.2 mln, including guarantee credits - from $36.2 mln to $50.3 mln, credits without state guarantees - from $170.5 mln to $251.4 mln. Out of the latter ones $203.6 mln again have bee made to the oil sector.

Strategic currency reserves of the country for the first 6 months of the current year increased on 26.7% making up to $2151.8 mln. Out of them, $1083 mln makes the share of assets of the State Oil Fund, $1068.8 mln - the share of total international assets of the National Bank of Azerbaijan. Official currency reserves of the bank in condition on July, 1 were equal to $947.7 mln.

On November 22 approximately 2 thousand Azeri oil workers held a one-day precautionary strike. The workers, employed by McDermott Caspian, an American oil company, demanded a salary increase for the local staff of 15-20 % and the elimination of discrimination towards them. (According to official data from the State Committee of Azerbaijan, the average salary of citizens of Azerbaijan who work in foreign companies is 56 times less than the average salary of foreign citizens working in the same companies). When their demands went unmet the workers repeated their strike on November 29, this time joined by local oil workers for other companies.

Participants of both actions expressed discontentment over the fact that McDermott invites citizens of foreign countries to work for them. These workers receive insurance, but the company refuses to provide insurance for local workers. Also, workers questioned the invitation of citizens from abroad (mainly from India, Singapore and Thailand) when there are already sufficient specialists in the sphere of the oil industry in Azerbaijan.

In response to the strikes McDermott's management agreed to raise local workers' salaries by 20% starting on December1. They also promised resolve workers' demands for Health Insurance by December 3.

The November 22 action became the first mass action of protest in the oil and gas sector of Azerbaijan since 1920.

*McDermott Caspian has been operating in Azerbaijan since 1995. It is the biggest contractor of sea projects for BP-Azerbaijan.