Nov 3, 2026
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Sheki Khans` Palace – A shining example of Eastern architecture
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Sheki Khan’s Palace – A shining example of Eastern architecture
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Baku, November 2, AZERTAC
The declaration of 2026 as the “Year of Urban Planning and Architecture” in Azerbaijan by President Ilham Aliyev has once again drawn attention to the importance of preserving and promoting the country’s rich architectural heritage and historical monuments.
As part of this initiative, a series of articles highlighting Azerbaijan’s architectural heritage and efforts to preserve and promote its historical landmarks is being published.
AZERTAC presents an article by architect and professor Elchin Aliyev on the Palace of the Sheki Khans.
The Palace of the Sheki Khans is the former residence of the Khans of Sheki, located in the city of Sheki, which was known as Nukha until 1968. The palace is a monument of history and culture of world importance and now serves as a museum. Built in the 18th century in the Oriental style, it stands in the elevated northeastern part of the city, within an area enclosed by fortress walls.
The palace, approximately 32 meters long and 9 meters wide, has two floors with a total area of about 300 square meters. It contains six rooms, four corridors, and two mirrored balconies. The building is 10 meters high, with each floor measuring 3.35 meters in height. The palace façade is decorated with paintings depicting hunting and battle scenes, as well as geometric and vegetal patterns.
The window openings in the palace halls and rooms feature removable stained-glass panels made using a technique known as shebeke. The geometric designs of these windows, incorporating colorful pieces of glass, harmonize with the overall composition of the palace’s main façade.
The shebeke patterns were created by folk artisans using small wooden pieces and colored glass, without glue or nails. Murals cover the walls, niches, stalactite transitions between the walls and ceilings, and the ceilings themselves in the halls on both floors and in the rooms on the second floor.
The interior paintings date from different periods. They include works by European masters preserved in the stalactite decorations of the lower hall’s ceiling, as well as paintings from the early 20th century by the renowned master Usta Gambar, his brother Safar, and his son Shukur, all from Shusha; Ali Gulu, Gurban Gulu, and Jafar from Shamakhi; Usta Abbas Ali; and other masters.
The oldest paintings date back to the 18th century, including those on the upper-floor ceiling attributed to Abbas Gulu. It is believed that Abbas Gulu, whose name is preserved on the palace walls, was the architect who designed the building.
The paintings on the first floor were created by Mirza Jafar from Shamakhi in 1895–1896, while those on the upper floor were painted by Usta Gambar from Shusha in 1902. The artists Ali Gulu and Gurban Gulu from Shamakhi worked mainly on the upper floor. The second floor is divided into two sections: one for men and the other for women.
The palace, which also incorporates features of traditional Azerbaijani residential architecture, is considered one of the finest examples of 18th-century palace architecture in the Caucasus and one of the architectural gems of the Islamic East.
Historians generally date the palace to the 18th century. However, Audrey Altstadt, a professor at the University of Chicago, dates it to the 17th century.
Another scholar, Sandor Rado, stated that the palace was built by Hussein Khan in 1760 and subsequently rebuilt. The Art Encyclopedia dates the palace to 1761–1762. According to the 1890 edition of the Encyclopaedia Britannica, the fortress in Sheki was built in 1765, while the palace was constructed somewhat later, in 1790.
Mikael Useynov, a prominent Azerbaijani architect of the mid-20th century, believed that the Palace of the Sheki Khans was built between 1762 and 1797. He also maintained that construction was completed by Mohammed Hasan Khan, the great-grandson of Haji Chelebi Khan, the founder of the Sheki Khanate. Useynov noted that “the most prominent features of palaces of the 18th century are represented” in the Khans’ Palace.
In 1853, a layout plan of the fortress was drawn up. According to the plan, the fortress contained a considerable number of buildings serving various purposes for the families of the Khanate’s aristocracy.
The 250th anniversary of the palace was celebrated in Sheki on July 4, 2012.
Once, a magnificent garden stood in front of the palace. Today, only two enormous, spreading plane trees, as old as the palace itself, remain from that garden. Like loyal sentinels, they have guarded this architectural treasure of Azerbaijan for centuries.
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Oct 31, 2026
Dramatic aerial twilight view of Riyadh city skyline with lit streets. by Abul Lais via Pexels
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The Twilight of Oil in an Age of Uncertainty: From a Vicious to a Virtuous Cycle
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The global hydrocarbon order is changing. Economic diversification and developing productive economies have become essential for Middle Eastern and North African states, requiring them to address social and political challenges and rethink domestic, regional, and global settlements.
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By Nur Arafeh, Ishac Diwan,
Hamza Meddeb,
Marwan Muasher
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The Middle East and North Africa (MENA) region has been a major producer and exporter of hydrocarbons since the 1930s. In 2025, around 30 percent of global hydrocarbon exports originated in the MENA region, with collective regional revenues amounting to over $1 trillion. Since 2000, when the second oil boom began (the first being in October 1973), MENA has sold $25 trillion worth of oil and gas (adjusted for 2025 prices). As demonstrated by the conflict between the United States and Iran, events in the region remain consequential for international energy markets. But equally, hydrocarbons have shaped the region’s economies, governance structures, and societies in ways that now define the nature of the challenge ahead.
The challenge in question is one of fundamental economic transformation. The global hydrocarbons order is facing profound change, as environmental and geopolitical pressures undermine the foundations on which many MENA economies have rested. In this context, economic diversification is no longer optional; it has become both strategic and urgent. Yet diversification is not merely a technical exercise. It brings with it at least three types of fundamental and interconnected challenges. The first is economic, and involves countries determining how to increase their labor productivity and build sustainable productive capacity outside hydrocarbons in economies long structured around resource rents. The second challenge is social and political, affecting how to renegotiate social contracts that support more inclusive societies. The third is regional, where the success or failure of transformation will depend not only on domestic reform, but on whether a more stable regional order can emerge, one in which economic cooperation prevails over conflict, fragmentation, and escalating tensions. Escaping the current vicious cycle and turning it into a virtuous one is essential for the region’s future.
This paper does not offer a single prescription and acknowledges that the MENA region encompasses countries at very different stages of development, with very different resource endowments, institutional capacities, and political settlements. The analysis focuses on three groups of countries: high-income hydrocarbon exporters (Gulf Cooperation Council (GCC) countries), middle-income hydrocarbon exporters (Algeria, Iraq, Libya, and Iran), and middle-income hydrocarbon importers (Egypt, Jordan, Lebanon, Morocco, and Tunisia). We offer an integrated approach to the economic, political, and regional dimensions of the diversification imperative and the need to strengthen productivity, as well as policy recommendations organized around the five key questions that structured the commission’s deliberations.
The first question is the most fundamental one: Why must MENA countries diversify, and why now? For all the countries examined here, the answer is that, for various reasons, the demand for hydrocarbons is falling in a world shaped by a volatile energy transition and a pressing imperative of energy security. This will inexorably reduce oil and gas exports and revenues over the medium to long term, sharply constraining these countries’ access to foreign exchange and deepening their fiscal pressures. Many of the hydrocarbon exporting countries understand therefore that, because they will not be able to finance employment of their growing labor force in the public sector, they must immediately begin investing in productive jobs if they are to meet future challenges. Energy importers face a different challenge: They realize that it will be impossible in the coming years to export carbon-intensive manufactured goods to Europe as carbon border adjustment mechanisms and other environmental regulations take effect. The war with Iran has exacerbated such tensions. For one thing, oil revenues will fall more rapidly, implying a need to diversify more rapidly. Additionally, the war is likely to force changes in the way in which diversification takes place. The oil importing countries, especially Egypt, Jordan, and Lebanon, will sustain indirect losses, which is one more reason why they need to try harder to improve their labor productivity through growth-enhancing reforms.
The second question concerns the current state of play: What is the situation when it comes to diversification efforts in the MENA region? The picture is highly uneven:
- GCC countries are heavily engaged in investing in productivity and diversification, but the results remain mixed. The most dynamic sectors have been oil products, entrepôt trade, tourism, hospitality, entertainment, and more recently renewables and artificial intelligence (AI) centers. However, generating productive jobs has been challenging, and the globally oriented model that underpins Gulf diversification strategies is threated by regional instability. The ability of the GCC countries to navigate a turbulent global energy transition is also in jeopardy.
- Among the middle-income hydrocarbon exporters (Iraq, Algeria, Libya, Iran), the pattern is one of rent consumption rather than investment. Productivity growth is absent, rent per capita is falling, and there is as yet no credible exit path from this trajectory.
- Middle-income hydrocarbon importers present an equally troubling picture, as they have been stuck in a severe form of the middle-income trap: They are operating below potential, with fragile social and financial situations, and are failing to pursue growth-enhancing reforms. Savings are low, as is investment, underemployment is rampant, and these countries each face a brewing debt crisis, while state services have been severely rolled back. The main problem is an unbalanced form of capitalism dominated by a closed economic elite that is unwilling to allow space for competition from firms not under its control. Political connections are based on loyalty, not productivity, which represents a key obstacle to transformation.
The third question is political. What are the social and political implications of the current trajectory? Across the MENA region, the social contracts that offered material provision in exchange for political acquiescence are under mounting strain. The generation now entering the labor market is better educated than its predecessors, holds higher aspirations, and has grown up with direct exposure to different global living standards. However, it also faces higher unemployment than preceding generations, deteriorating public services, and more precarious labor markets. The nature of this strain diverges across country groups, reflecting fundamentally different distributional bargains. In the GCC, the rentier bargain is being restructured through nationalization of the labor force and subsidy reform, generating grievances with few formal outlets to express them. In middle-income hydrocarbon exporting countries, revenues sustain narrow patronage networks, but cannot finance mass consumption or broad legitimacy. In hydrocarbon importing states, such as Egypt and Jordan, external geopolitical rents that once underpinned the social contract are being eroded, leaving governments with shrinking fiscal space and facing rising social instability.
What unites all three country groups is the dilemma of how to deal with the fact that the reforms needed to build productive diversified economies are politically costly in the short run, even as inaction is economically unsustainable in the long run. Faced with this dilemma, governments have responded across the board by centralizing power and intensifying control, either to manage reform (in the case of the GCC countries) or avoid it (in the case of other states, such as Algeria, Egypt, Jordan, and Tunisia). However, this approach is straining the very foundations on which a durable economic transformation must rest—rule of law, investor confidence, legitimate channels for objection. The difficulties reformist politicians are facing are complex. They must propose attractive reforms that generate support from a coalition of reformist parties or pressure groups, create mechanisms that compensate losers and bring them into the fold, put in place checks and balances to avoid costly mistakes and learn from experience, and finally permit the voicing of grievances to avoid the type of explosion that was common during the decade of Arab uprisings.
The fourth question concerns the external environment. How do regional and global dynamics shape, and potentially undermine, diversification efforts? Falling hydrocarbon revenues will intensify regional competition in the oil and gas market if it is not matched by improved regional cooperation, as countries seek to defend their share of a shrinking market. This reality has become more acute since the beginning of the war with Iran, which dampened global appetite for Gulf oil and gas due to elevated perceived risks. Moreover, increased insecurity has also disrupted Gulf diversification strategies in areas that are highly sensitive to security conditions—foreign direct investment, tourism, or trade.
In this more volatile environment, countries need to imagine growth paths that are more resilient to shocks and less likely to generate them. This requires building regional economic interdependencies, which today remain underdeveloped. It would mean expanding intraregional trade and investment, advancing a regional security architecture that reduces business risk and lessens reliance on any single external guarantor, and diversifying external economic relationships in a world increasingly organized around geopolitical blocs. To be able to sustain diversified relations, stronger regional bargaining power helps. This could come in the form of more robust soft power derived from better management of regional public goods such as defending the environment, improving security, caring for refugees, and preventing states from failing. There are other arguments for improved regional cooperation in the form of the growth of a regional market: the need to bring some accumulated savings in the form of globally placed Sovereign Wealth Funds’ assets closer to home, given rising expropriation risks; the fact that environmental challenges are regional; and the advisability of preserving and diversifying regional trade routes.
The fifth and final question is a holistic one: How do these elements interact, and under what conditions can the region move from a vicious to a virtuous cycle? The elements discussed above can interact positively or negatively. The status quo increases regional tensions, political risk, and doom loops—or self-reinforcing cycles that exacerbate problems—of economic decline and violence. The overlapping aspects of the transition—economic, social, political, and environmental—create structural tensions, but progress on one front can create momentum for broader reforms and a virtuous cycle that facilitates progress:
- A regional security deal would be much enhanced by regional economic cooperation. Moreover, the financial rates of return to the region of sovereign wealth fund investment would be greater if invested in large rather than small markets. Cooperation is also needed to fight climate change.
- The ability to implement industrial policy to develop new value chains in a secure regional environment would enable the region to bargain for a fairer role in a fragmented world order.
- Reduced regional instability and the development of a regional market would create positive incentives for recalcitrant regimes to invest in growth, especially in middle-income countries.
Read the whole article from the Carnegie Endowment for International Peace.
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