BERLIN, Aug 25 (AFP) - German Chancellor Gerhard Schroeder welcomed Wednesday the reforms undertaken in Azerbaijan and economic growth that has begun there, after talks here with President Ilham Aliyev.
"The domestic reforms have led to surprising growth," said Schroeder, adding that efforts to improve the rule of law had brought "much success already."
He called on German investors to drop their reservations about the region around the oil-rich former Soviet republic, which borders Iran, Russia and Turkey.
The two leaders signed a contract for the delivery to Azerbaijan of three Airbus A319 passenger jets and a smaller aircraft.
Azerbaijan, a mainly Muslim nation of about eight million people, has sizeable oil deposits which it is starting to export to world markets.
Its pro-Western and secular government has said it wants to move closer to European institutions.
Schroeder also said that Germany supports a political solution to the conflict in the enclave of Nagorny Karabakh and wants to continue to help through the auspices of Europe's OSCE security organisation.
Azerbaijan and Armenia fought a four-year war over Nagorny Karabakh, which has a majority Armenian population. The conflict has cost an estimated 35,000 lives and forced about one million people on both sides to flee their homes.
Aliyev, 42, who succeeded his father as president last year, is making his first visit to Germany as president and is expected to leave on Thursday.
On a trip to Azerbaijan in April, German Foreign Minister Joschka Fischer said its leaders needed to improve their performance on democracy and human rights.