In May 1992, the Azarbadjansovet controlled by a majority of
ex-Communists returned the presidential post to the deposed
MutalÝbov. He canceled the elections scheduled for
implementation in June and issued curfews. In response, the
leaders of the People's Front, with the support of the
militia, occupied the Soviet headquarters in Bak˙, declaring
the appointment illegal. After violent clashes in the
capital, the opposition reinstated MamÚdov. The Popular
Front occupied a number of key posts in the new government,
such as the leadership of the security agencies and the
public mass media.
President Mutalibov was forced to retire in December 1992
following the defeat of the Azerbaijan forces and the siege
of Parliament by the People's Front. In the following weeks,
the Armenian offensive expanded and in May 1993, the attack
against Stepanakert, the administrative center of Nagornij
Parliament reinstated Mutalibov as president in mid-May,
but the People's Front put him off again during an armed
uprising. The fighting spread across Nagorni Karabakh's
territory and after taking Stepanakert, the Armenian forces
spread to several Azerbaijan regions.
The leader of the People's Front, Albufaz Elchibei, won
the presidential election in June, allowing the former
leader of the Soviet Union Communist Party, Heydar Aliev's
return. However, a renewed Armenian offensive was followed
by a coup. Under the leadership of Colonel Guseinov, the
coup makers quickly occupied 5 provinces in the country.
When the offensive against Bak˙ began, Elchibei fled,
leaving Aliev the presidential post.
In September 1993 Parliament approved the accession of
Azerbaijan to the Federation of Independent States. A month
later, Aliev won the presidential election and launched a
successful offensive in Nagorny Karabakh. Following pressure
from Russia, a ceasefire took effect in May 1994 and
negotiations between the warring parties began. Contacts
continued in 1995 and in the first months of 1996, but no
progress was made towards a final agreement.
Supporters of Prime Minister Surat Husseynov occupied
several cities in October 1994, but they were quickly
displaced by Aliev loyal forces. In Bak˙, larger
demonstrations were held in favor of Aliev, who replaced
Husseynov. The president decreed two months of state of
emergency and several MPs were arrested on charges of
participating in the coup d'Útat.
In November 1995, parliamentary elections were held,
without the participation of either Musavat's influential
party or communists or Muslims, whose existence had been
banned by the government. Aliev's party, the new Azerbadjan,
became the winner of the election. The fall in gross
domestic product in 1995 was on the order of 20% compared to
the previous year, while inflation fell from 880% to 790% in
the same period.
In November 1996, Artur Rasizade replaced Prime Minister
Fuad Guliyev, who had resigned for "health reasons".
economic issues such as privatizations were removed from
their records due to incompetence - according to official
explanations. For the second year in a row, Russia's borders
were closed. Mutual relations had cooled drastically
following the Russian invasion of Chechnya in December 1994.
In April, diplomatic relations with Iran deteriorated,
following the arrest of members of the pro-Iranian
Azerbaijan Islamic Party. In June, Azerbadjan and Turkey
signed a bilateral military cooperation agreement.
Amnesty International tried to pressure the authorities
to convert the death penalty into a prison sentence and take
the necessary measures to completely abolish it. In late
1997, Azerbadjan celebrated the opening of the Caspian Sea
oil fields. The initiative was the result of a contract
between the Azerbaijan Government and a consortium of 12
companies, where the North American representation was 40%.
It is estimated that Azerbaijan, Kazakhstan and Turkmenistan
together hold the world's third largest oil reserves. In
December 1999, a Japanese company decided to invest $ 2.3
billion in oil exploration.