Baku is the capital and largest city of Azerbaijan, as well as the largest city on the Caspian Sea and of the Caucasus region. It is located on the southern shore of the Absheron Peninsula, which projects into the Caspian Sea. The city consists of two principal parts: the downtown and the old Inner City (21.5 ha). Baku’s urban population at the beginning of 2009 was estimated at just over two million people. Officially, about 25 percent of all inhabitants of the country live in the metropolitan city area of Baku.
Baku is divided into eleven administrative districts (raions) and 48 townships. Among these are the townships on islands in the Baku Bay and the town of Oil Rocks built on stilts in the Caspian Sea, 60 km (37 mi) away from Baku. The Inner City of Baku along with the Shirvanshah’s Palace and Maiden Tower were inscribed as a UNESCO World Heritage Site in 2000. According to the Lonely Planet’s ranking, Baku is also among the world’s top ten destinations for urban nightlife.
The city is the scientific, cultural and industrial center of Azerbaijan. Many sizeable Azerbaijani institutions have their headquarters there, including SOCAR, one of the world’s top 100 companies and others. The Baku International Sea Trade Port, sheltered by the islands of the Baku Archipelago to the east and the Absheron Peninsula to the north, is capable of handling two million tons of general and dry bulk cargoes per year. Baku is to host the 57th Eurovision Song Contest in the end of May 2012, and the city is currently bidding to host the 2020 Summer Olympics.
Baku’s largest industry is petroleum, and its petroleum exports make it a large contributor to Azerbaijan’s balance of payments. The existence of petroleum has been known since the 8th century. In the 10th century, the Arabian traveler, Marudee, reported that both white and black oil were being extracted naturally from Baku. By the 15th century, oil for lamps was obtained from hand-dug surface wells. Commercial exploitation began in 1872, and by the beginning of the 20th century the Baku oil fields were the largest in the world. Towards the end of the 20th century much of the onshore petroleum had been exhausted, and drilling had extended into the sea offshore. By the end of the 19th century skilled workers and specialists flocked to Baku. By 1900 the city had more than 3,000 oil wells, of which 2,000 were producing oil at industrial levels.
The Baku Stock Exchange is Azerbaijan’s largest stock exchange, and largest in the Caucasian region by market capitalization. A relatively large number of transnational companies are headquartered in Baku.
Baku is one of the most important tourist destinations in the Caucasus, with hotels in city earning 7 million euros in 2009. Many sizable world hotel chains have a presence in the city. Baku has many popular tourist and entertainment spots, such as the downtown Fountains Square, the One and Thousand Nights Beach, Shikhov Beach and Oil Rocks. Baku’s vicinities feature Yanar Dag, an ever-blazing spot of natural gas. On 2 September 2010, with the inauguration of National Flag Square, Baku became home to the world’s tallest flagpole, according to the Guinness Book of Records.
Baku has several shopping malls; the two most famous city center malls are AF MALL and Park Bulvar. The retail areas contain shops from chain stores up to high-end boutiques.
