FIVE YEARS OF WAR OVER Karabakh have taken their toll on the Caucasian state of Azerbaijan. The conflict has created tens of thousands of casualties and more than 1 million refugees - almost 15 percent of the population. While Azerbaijan is potentially one of the richest of the post-Soviet republics (its oil reserves are estimated at half those of Kuwait), war has paralyzed the economy, and most of the population exists at a bare subsistence level. With nearly a quarter of its territory occupied by Armenian troops and its government undergoing annual changes since attaining formal independence in 1991, the Turkic Muslim state on the Caspian Sea appears to have been singled out for hardship.

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