DEVELOPMENT STRATEGY AND WEIGHT OF THE NON-OIL SECTOR IN THE ECONOMY OF AZERBAIJAN

Abstract

After the collapse of the USSR, the socialist system collapsed in Azerbaijan, as well as in other allied states. That collapse completely destroyed almost all sectors of the country’s economy, especially the non-oil sector. This means that the period of recession in both the oil and non-oil sectors in the country reached its peak. The stagnation of the country’s economy was felt in many areas. It should be noted that agriculture, tourism, manufacturing, and engineering reached such a decline that the country became dependent on imports in most areas. The transition to economic development after such a tense situation in the country’s economy was remembered by our economists by highlighting three historical stages of the development of Azerbaijani economy in the period after the restoration of independence. The following stages ca be singled out: 1) A period of economic recession, 1991-1994. 2) A period of stability and consistent growth beginning, 1994-2003. 3) A period of dynamic development, 2003- until now. The period from 1991 to 1994 is considered the first period for the economy development. During that period, the political and socio-economic situation in the country became more complicated. According to the statistics provided for this period, during 1991-1994, the gross domestic product (GDP) decreased by 16.5 per cent annually. It is also known that in Azerbaijan, especially in the non-oil sector, a decrease in industrial production by 10% in 1991, 37% in 1992 and 50% in 1993 compared to 1985 was recorded. As a result of the collapse of the USSR, the production areas were almost completely out of order, and as a result, the level of unemployment increased to a high level. Again, referring to the statistics of that period, we can say that in 1991-1995, the monetary income of the population in real terms decreased by 3.3 times, and monetary income per capita decreased on average by 3.6 times. In parallel with this, the wages of the population decreased by 5.7 times. Since the times of the USSR, in agriculture, which has strong production and economic potential for Azerbaijan, the cultivated area of the main crops, the number of livestock has decreased sharply, and the level of production has almost fallen to the state of recession. Comparing 1996 with 1990 on the basis of given statistical data, it can be concluded that in 1996 agricultural production in the Republic decreased by more than 2-3 times. In parallel with this, the tense situation in agriculture also had a negative impact on the processing sector. Based on the calculations, it was found that in 1995, compared with 1993, the production of cereals and legumes decreased by 19.7%, cotton production – by 3.7%, tobacco production – by 74%, vegetable production – by 13%, fruit production – by 6.4%. At the same time, that trend was observed in meat and eggs production. During that period, meat production decreased by 10 thousand tons, egg production – by 128.7 million units. It was found than the processes that took place in Azerbaijan in 1991-1994 led to the fact that the country’s economy, especially the non-oil sector, collapsed on a large scale.