Abstract
The dependence of the Azerbaijani economy on oil makes urgent the issue of diversifying the economy to increase its competitiveness. This, in turn, necessitates the formation of techniques to qualitatively assess the effectiveness of diversification to alternative, namely non-oil exports. This study aims to develop an econometric model to assess the impact of non-oil export diversification on Azerbaijan's economic development. Based on the literature analysis and using hierarchy analysis by T. Saaty, a list of indicators has been proposed to assess the diversification of non-oil exports. The opinions of 30 experts were used to prioritize the indicators. An integral coefficient of diversification of non-oil exports was modelled based on an additive convolution of diversification indicators, taking into account the coefficients of their significance and expert assessments. The research results can serve as a suggestion as to the formation of an effective strategy for the modernization of the country's economy.
Highlights
Azerbaijan is one of the largest producers of crude oil in the world
This has predetermined a certain specificity of the importance of crude oil to the country's national economy, the development of which is largely determined by the volatility of crude oil prices (The State Statistical Committee of the Republic of Azerbaijan, 2020)
Given the current level of development of Azerbaijan's economy, it seems appropriate to ensure the diversification of the country's non-oil exports
Summary
Azerbaijan is one of the largest producers of crude oil in the world. According to IndexMundi in 2019 it was ranked 23rd in terms of crude oil volume (798,000 bbl/day) (Index Mundi, 2020a) and was a leading exporter ofThe Role of Exchange Rates in Non-Oil Export Activity. Azerbaijan is one of the largest producers of crude oil in the world. Mundi in 2019 it was ranked 23rd in terms of crude oil volume (798,000 bbl/day) (Index Mundi, 2020a) and was a leading exporter of. This has predetermined a certain specificity of the importance of crude oil to the country's national economy (almost 40% of GDP falls is in the oil and gas sector), the development of which is largely determined by the volatility of crude oil prices (The State Statistical Committee of the Republic of Azerbaijan, 2020). The international rating agency S&P Global Rating (2020) predicted a decrease in Azerbaijan's GDP growth in 2020 by 6.9% due to a decrease in the global demand of fuel, the spread of the coronavirus, the emerging global crisis of overproduction, and the oil price war between
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