Azerbaijan includes within its borders the predominantly Armenian enclave of Nagorno-Karabakh, which from 1988 was the focus of intense conflict between Azerbaijan and Armenia. The capital of Azerbaijan is the ancient city of Baku (Bakı), whose harbour is the best on the Caspian Sea. Azerbaijan was an independent nation from 1918 to 1920 but was then incorporated into the Soviet Union. It became a constituent (union) republic in 1936. Azerbaijan declared sovereignty on September 23, 1989, and independence on August 30, 1991.
In addition to its variegated and often beautiful terrain, Azerbaijan offers a blend of traditions and modern development. The people of its remoter areas retain many distinctive folk traditions, but the lives of its inhabitants have been much influenced by accelerating modernization, characterized by industrialization, the development of power resources, and the growth of the cities, in which more than half the people now live. Industry dominates the economy, and more-diversified pursuits have supplemented the exploitation of oil, of which Azerbaijan was the world’s leading producer at the beginning of the 20th century. Fine horses and caviar continue as some of the more distinctive traditional exports of the republic.

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