Abstract
Azerbaijan has a very central and decisive role in the Iranian politics in the Caucasus. Since the collapse of the Soviet Union and independence of Azerbaijan, relations between Tehran-Baku has usually been good with leaps and bounds during the past two decades. Factors such as having a shared history and culture and potentials for economic cooperation function as a stimulus for the development of bilateral relations. However, the relations are faced with obstacles and deterrents such as continuing disputes about the legal regime of the Caspian Sea, relations with Israel and the US and NATO accession by Azerbaijan are in place. Azerbaijani authorities also see the Islamic Republic of Iran's foreign policy towards the issue of Nagorno-Karabakh and extensive relations with Armenia as the most important obstacles to improved relations between the two countries. Therefore, despite some opportunities to improve bilateral relations between Tehran and Baku, challenging factors and restrictions have actually increased. This research provides a brief survey of the relations between Iran and Azerbaijan based on statistics of economic and trade relations, and the causes of development of economic relations and economic cooperation between Iran and Azerbaijan on the other hand, and uses descriptive and experimental method (statistical) to study capacity and balance of economic relations between the two countries given political considerations on the one hand. DOI: 10.5901/mjss.2016.v7n3s3p72
Highlights
The vacuum created by the collapsing of Soviet Union in its southern regions is rapidly filling by new relations that characterized by recent geopolitical facts in the central Asia
Foreign relations of Azerbaijan with Iran shows that the terms of trade and economic relations was first friendly and Iran was a major economic partner of Azerbaijan, but gradually these relations deteriorated in terms of political and economic terms and faced challenges
Considering the fact that Azerbaijan is a Shiite country and given the geographical proximity and historical and cultural links with the Iranian population, close relations between the two countries is of great ability, while the evidence suggests that these relationships deteriorates over time and is charged with mistrust and suspicion
Summary
Affected by adverse political relations and directions of foreign policy of the Islamic Republic of Iran and Azerbaijan, economic relations between the two countries in the years of independence the Republic of Azerbaijan up to the year 2014 have always been subject to a lot of ups and downs. Chart (4): Trade indicators of Azerbaijan (billions of Euros) Source: IMF (direction of trade statistics-2014) Foreign investment in the non-energy sector, continued Karabakh conflict and its negative impact on the economy of Azerbaijan, trade with CIS countries and Russia, as well as Turkey and Europe are the issues that the country tries to manage the renovation and reconstruction of its economy. They saw public spending on infrastructure as critical to easing physical constraints on the business climate and improving the productivity of private investment
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