http://www.economist.com/news/europe/21699164-post-soviet-autocracy-tries-transmute-black-gold-modernity-baku-future
Azerbaijan: its sputtering economy, oppressive political system and simmering conflict with Armenia...
Between 2003 and 2015 oil and gas revenues were $119 billion; the cash was spent on infrastructure, weapons and ostentatious follies. Some of the money the country earned from oil and gold mines has been funnelled into powerful people’s offshore accounts. When the oil price crashed, the music stopped. Baku’s taxi-drivers now grumble about rising prices and the money being wasted on the Grand Prix.
Azerbaijan had to devalue its currency twice last year, after its central bank burned through some $10 billion of foreign-currency reserves trying to defend the manat. Banks are weighed down by some $2 billion of unpaid loans, say some analysts. The State Oil Fund of Azerbaijan (SOFAZ), which takes in all of the country’s oil and gas revenues, is still sitting on $35 billion—roughly equal to a year’s GDP—but spending has been cut back and the budget now conservatively assumes a price of $25 a barrel.
Azerbaijan ... Inflation is in double digits. Rising bread prices caused riots in several regions, quickly pacified with cash and police truncheons.
Struggling to cope with cheap oil and the need to finance energy projects, Mr Aliyev is now seeking to repair relations with the West.