History of Baku traces its roots back to the antiquity, though exact date of its establishment is not known up to present. Territory of Absheron peninsula, where the city is located, has very favorable geographic location, comfortable bay, warm dry climate, fruitful soil, natural resource, so the appearance of the ancient settlements here is quite understandable.

Baku, its, oil, ‘burning land’ were known far from its boundaries long time ago. “Eternal fires” in its outskirts are always reminded in the written sources of the middle ages related to Baku. Byzantine Pisk Paniysky, who was describing the cities of Caucasian Albania, was one of the first ones who informed about them at the beginning of V century. he noted about the place, where “the flame was rising from the underwater rock”. Baku had been noted in the essays of Arabic geographers and historians as small but developed feudal city since IX century. Undoubtedly, Baku is a source of white and dark-gray oil. Caravans from the whole Near East, Slovenian, Byzantine, Chinese, Venetian, Indian merchants were coming here for the oil.

In the second mid of IX century state oil Shirvanshah was established. Though this campaign of shah Ismayil to Shirvan dealt a strong blow on the state of Shirvanshah’s, it continued existing until 1538. In 1538 Sevefid ruler shah Tahmasib put an end to the ruling of the Shirvanshahs and adjusted the whole Shirvan including Baku to the state of the Sefevids.

Second mid of XVI and early XVII century was distinguished with the wars between the state of Sefevids and Osman Turkey. Baku was moving from one hand to another. Strengthening of the centralized power, termination of the destroying wars and feudal factions in 40s of XVII century gave an impulse to the prosperity of the city life. In the period of the Sefevids Baku was producing brass coins, carpet waiving, oil and salt sales were developing. Baku was fenced with the second row of the fortress walls.

Number of independent khanates including Baku khanate was established in the territory of Azerbaijan in XVIII century. Mirza Muhammad-khan (1747 – 1768) was at the head of Baku khanate. Mirza Muhammad-khan was engaged in the reconstruction of the country economics, furthered to the development of trade in the period of his 20-year ruling. Being an admiral, he was ruling shipbuilding for the transportation of the goods and military goals.

In spite of some revival in the economics in that period, devastating forays of Iranian ruler Aga Muhammad-khan Gajar were damaging Azerbaijan heavily. In 1795, Aga Muhammad-khan Gajar captured and ravaged Baku but late his army left Shirvan.

As a result of Russian-Iranian wars, Baku khanate was adjusted to Russia. Gulustan agreement signed between Russia and Iran in 1813 legally formalized inclusion of Baku khanate into Russian empire. Upon completion of the last Russian-Iranian war, Turkmenchay agreement was signed in 1828, according to which Azerbaijan was divided by the river Araz between Russia and Iran and officially assigned the captured lands, including Baku, to Russia.

So, economical upturn of late XIX century turned Baku into one of the largest centers of Russia and the biggest and considerable cities in Caucasus.

Oil production was playing a big role in the development of the city. Baku was involved in the industrial development of Russia, which economics sharply had increased its demands for the oil. Oil fever that started was comparable to the gold fever in Klondike. Intensive exploitation of Baku oilfields had started, which provided large inflow of the capitals of the foreign oil companies. Representative offices of Sweden, English, French, Belgian, German, American firms were based in Baku in short period of time.

“Oil belt” of Baku known as Black City had become developing in 1873. Later on, Baku industrial region including “oil villages”. Along with the oil industry, other fields of economics started developing – 40% of the naval transportation was carried out in the Caspian. In 1883, first railway was opened connecting Baku and Tbilisi, in 1990 – first railway Baku – Petrovsk (present Makhachkala) was constructed, which had accesses to the central provinces of Russia and then to Europe. In 1868-1879 first telegraphic lines between Baku, Tbilisi and Krasnovodsk were constructed, in 1886 – first telephone station was constructed.

“Oil business” magazine was published in Baku – it was the first edition dedicated to the oil and its production issues. Baku was producing almost half of the world oil production in early XX century.

On May 28, 1918, Democratic Republic of Azerbaijan was declared. This was the first republic in the Muslim East. Baku has become a capital of the Democratic Republic of Azerbaijan. New bodies of state power were establishing.

On April 28, 1920 XI Red Army subdivisions entered Azeri capital, the city of Baku. Soviet power was declared in Azerbaijan. New period in the history of the city of Baku had started.

During the World War II Baku was providing the front with the oil. Baku’s contribution in the successful destroy of fascism is quite heavy. Oil reserves of Baku totaled to 75% of the whole oil reserves of the country, airplane fuel consisted of Baku oil by 90%. Old wells were reconstructed and exploited. Thousands of oil-industry workers were going to the front to fight and their places were occuiped by the women. Considerable volume of the military technique, ammunition was produced here as well. Baku was an important transport junction in the provision of the USSR with military humanitarian assistance through the allies carried out via Iran. Being a back city, Baku had received nearly 440 thousand wounded from the front for the years of war.

Baku had become one of the largest industrial centers of the former USSR.

At present, Azerbaijani capital plays a key role as one of the largest political and economic centers of the Caucasian region.

Baku is situated in the south of the Absheron Peninsula, on the shores of the Caspian Sea, its area is 2,200 square kilometers.

Baku has 11 administrative districts and 47 townships. As of January 1, 2012 population of Baku was 2,122,300 people.

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