Economy Of Azerbaijan Research Articles

The impact of the first European Games 2015

This article explores the staging of the first European Games in Baku, in 2015, and its impact on the country's sporting ambitions. The way is which the event was covered by the media is also considered, and the extent to which this coverage affected the politics and economy of Azerbaijan. All would agree that Baku 2015 was a major opportunity to represent Azerbaijan to the world. In fact, it represented a watershed in national strategy; the moment that Azerbaijan laid claim to a reputation as a global capital of sport, that this young country was taking the lead in the dynamic, young, exciting world of sport. It was a bold exercise in international posi- tioning. With reference to some of the activities and ambitions that brought the European Games to reality, it can be seen that the objective to change the international perception of Azerbaijan, laying the foun- dation for future sporting success, was a resounding success.

STRATEGY OF LIBERALIZATION AND PROBLEMS OF STATE REGULATION OF AZERBAIJAN ECONOMY

The indicators that determine the change in the macroeconomic situation in the economy of Azerbaijan in 2010–2017, as well as the conditions for increasing the effectiveness of state intervention in solving economic problems are analyzed. It is noted that it is not the size of the public sector that becomes important, but its qualitative component (management and redistribution of resources and revenues, coordination of government intervention in economic relations). The main reasons limiting economic growth are identified, and the mechanisms for overcoming them are disclosed, since economic growth is of particular importance in the transformational period of state development. It substantiates the assertion that the forms and methods of state regulation should be the result of a reasonable combination of the private and public sectors of the economy to more effectively achieve the goal of economic development of the country and increase the welfare of the population. To this end, it is advisable to limit the actions of market forces and find a rational ratio of market and government measures that stimulate economic growth and development.It is shown that in the near future the development of the economy of Azerbaijan should be focused on the transition to the integration of various models of economic transformation; at the same time, “attraction of investments” should be carried out by methods of stimulating consumption, and the concept of a socially oriented economy, which the state also implements, should prevail, thereby ensuring social protection of the population and at the same time developing market relations. Disproportions in regional and sectoral development are also noted, which are the result of an ineffective distribution of goods produced, inadequate investment in human capital, a low level of coordination and stimulation of economic growth and development.

Macroeconomic model of safe functioning of the national economy of Azerbaijan in the long-term period

In the 90s of the twentieth century, due to the formation of new independent states in the post-Soviet space, as well as a change in the constitutional foundations of Eastern European countries, the governments of the countries were faced with the task of ensuring economic security of the countries.In the scientific literature, there are three main paradigms for solving the problem of the country’s economic security: the paradigm of the country’s national interests; the paradigm of independent and independent development of the national economy; paradigm of sustainable development of the national economy. The economic system of the country, with its characteristic mechanism, operates in a cyclical mode, consisting of four stages: development, slowdown in development and stagnation (crisis), recession and depression, stabilization. It is necessary to have a toolkit (methodology), allowing one to foresee the onset and completion of all stages of the functioning cycle, the lead-time of more than 30 years. The structural and conjuncture equation of the country’s economy functioning cycle in the long-term period, with a leadtime of more than 30 years, can be used to determine the time of occurrence of economic threats in the national economy. The basis of the macroeconomic model of safe functional organization of the national economy of the country has been laid the equation of the cyclic functioning of the national economy, as a dynamic system, developed by the author, the equation of the cyclic functioning of the national economy of the country on the long-term period. Based on the equation of the cyclical functioning of the national economy of Azerbaijan, the time of the beginning of the slowing down rate of development of the national economy of the Republic has been determined. Three basic conditions for the safe functioning of the national economy have been offered. Based on the method, developed by the author, the basic conditions for the safe functioning of the national economy of Azerbaijan have been determined.

Azerbaijan between Two Empires: A Contested Borderland in the Early Modern Period (Sixteenth‒Eighteenth Centuries)

The first part of the paper examines the evolution and transformation of Safavid ideology in the context of confessional changes and the role of Turkoman tribes in the Safavid social movement in the Ottoman‒Iranian borderland. The second part examines the impact of Ottoman‒Safavid wars and religious rivalry on the society and economy of Azerbaijan from the sixteenth to the eighteenth centuries.

Oil Factor in Economic Development

The research examines the role of oil in the world economy and the evaluation of the oil factor in the economy of Azerbaijan. The error correction model (ECM) has been used in terms of reliability of the obtained results, and assessment has been done by the FMOLS, DOLS and CCR co-integration methods. Engel-Granger and Phillips-Ouliaris co-integration tests have been used for checking the co-integration relations among variables. Times series have been checked whether they are unit root (Augmented Dickey-Fuller (ADF), Phillips-Perron (PP) and Kwiatkowski-Phillips-Schmidt-Shin (KPSS) as a methodology of the research. The results of the research reveal that daily oil production and consumption have less effect on the formation of the world oil prices. On the other hand, the impact of the world GDP and world industry production volume is a bit more. Generally, the influence of these factors on oil market has been reduced gradually. However, the reverse process is observed during the analysis of the influence of oil production and oil price on the main indicators of Azerbaijan and Kazakhstan. Therefore, Azerbaijan and Kazakhstan are an oil-exporting countries which is why their macroeconomic indicators, especially currency, GDP and DNP, heavily depends on the oil factor. The research has been limited but highlights the obtained results to some problems and this must be considered as a new source for future research. Thus, the similar studies have been considered to be done thoroughly on several alternative econometric models, but a lack of statistical information on a yearly basis and strong currency intervention constitute some barriers to transiting to a floating currency. The practical importance of the research is to prove that the dependency of the oil prices on the world GDP and world industry production, daily oil production and world oil consumption have decreased gradually. In the second part of the research, the dependency of the Azerbaijan and Kazakhstan economies on oil was proved. This might be a signal to transfer oil resources into human capital.

Formative and educational aspect of Azerbaijan. The pedagogical message of the poet Mirza Shafi Vaseh (1794-1852)

Abstract The economy of Azerbaijan has been moving forward towards “diversification” for many years and has not been focusing on the petrol sector anymore, but on a variety of fields, education above the others. Azeri education is deeply rooted in sport and health policies, and it finds expression in various sports events promoted by the Government. The history of juvenile politics dates back to 1994, thanks to the authoritative promotional effort of the national leader Gaydar Aliyev. Azeri young people between 14 and 29 are regularly involved in all these events, actively participating in conferences and international scientific research projects. Azerbaijan aims above all at improving the knowledge of the English language among pupils, university students, and leading scientists. Azeri school is a formative and educational laboratory where events promoted by the Ministry of Education are often experimented. Since 2016 Azerbaijan has been focusing on making the Azeri society online-oriented, focusing on immediacy and material, effort, and time-saving. Education is firmly based on the lifelong learning approach, that is fundamental for today’s personal and professional fulfilment. Human beings create their deep inner reality by educating themselves and the others and, in order to feed their souls, they often resort to the literary world, which is full of formative and educational elements. This is the reason to start a detailed reflection on the work of a famous Azeri poet: Mirza Shafi Vaseh (1794-1852). His poems deal with the human being’s search for love, reflection, wisdom and ‘formative’ beauty.

Economic effects estimation for the Eurasian Economic Union: Application of regional linear regression

This paper aims to provide a coherent analysis of the economic impact accession to the Eurasian Economic Union has had on the economies of current member states and what affect membership would have on the economy of Azerbaijan. By applying a Linear Regression Model we find that membership to this regional bloc has yielded minimal financial benefits for the existing members. However, for most states, accession has increased the trade deficit with Russia and that a membership would likely produce a similar negative outcome for Azerbaijan in addition to undermining national economic and energy policy making.

Abdulgasanov Tural Tofik oglu. Intensification of the agricultural sector as a regularity of the development of the economy of Azerbaijan.

В статье автором указывается, что за последнее время немаловажно на деле служит как освоению новых земель, так и улучшению использования уже освоенных земель. Хотя наступает момент, когда дальнейшее расширение площадей становится не только затруднительным, но и невозможным по причине отсутствия свободных земель или невыгодности их использования в связи с большими капитальными затратами. Для увеличения выхода продукции остается единственный путь - улучшение сельскохозяйственного производства. В данном случае интенсификация приобретает силу объективной необходимости и превращается в закономерность развития сельского хозяйства. Необходимость последовательной интенсификации предполагает проведение в определенном порядке всех мероприятий, повышающих культуру земледелия и урожайность сельскохозяйственных культур, качество продукции, производительность труда, которые способствуют снижению себестоимости продукции. Интенсификация также означает переход к рациональным системам земледелия. Используя опыт, работники сельского хозяйства отказались от шаблона в земледелии, улучшили качество основной и предпосевной обработки почвы, стали настойчиво внедрять в производство новые урожайные сорта зерновых культур, проделали большую работу по внутрихозяйственному устройству и введению севооборотов. Таким образом, для защиты внутреннего рынка страны с развитой экономикой широко применяют всевозможные акцизы, лицензирование, тарифное регулирование и квотирование, пошлины. Помимо этого могут создаваться запасы продовольствия и продовольственные фонды, которые обеспечат продовольственную безопасность.

Организация совместного предпринимательства Азербайджана с Россией

Relevance. Joint economic structures occupy an important place in the economy of Azerbaijan. They are actively involved in the formation of GDP and the organization of new highly paid jobs. However, the prevailing number of these enterprises are small ones, and the volume of their production tends to decrease. The number of them representing the CIS countries is insignificant and they are not sufficiently developed on the territory of the Republic. Up to 20% are foreign and joint ventures out of the total number of annually liquidated business structures. All these facts urgently require the development and implementation of scientifically based recommendations for improving the activities of joint ventures in the Republic. Goal. Assess the state of the organization of joint business in Azerbaijan, identify relevant reserves and propose specific recommendations for their rational use. Methods. The methods of the economic-statistical grouping, the graphic method of comparative analysis were used in the article. Results. The factors negatively influencing the effective organization of joint business are revealed. Conclusions. As a result of the analysis, it was revealed that the irrational placement of foreign and joint ventures in the spheres of economic activity and regions adversely affects the growth of production volume and the development of innovative infrastructures. For the rational organization of joint business, it is necessary to develop real investment projects, to increase diversification in the sectoral structure, to intensify the process of creating joint ventures in the agricultural sector and in the manufacturing sub-sectors.

External Financing of Azerbaijani Agriculture

The article investigates formation and normal activity of human capital which performs main resource of modern economic development and influence of external financing in the field of food security, which acts as the main part of economy of Azerbaijan that newly got independence. Roles of subsidy, microfinancing and loans were examined. It is confirmed Ntional Fund for Entrepreneurship Support (NFES) of the Republic that allocated the agricultural sector production and processing of loans, provision of bank loans to the agricultural sector. Under the influence of the economic performance of the agricultural sector development trends of the loan were based on the economic and mathematical models and charts were drawn. By the time forecasts were prepared it became clear that loans, especially state finance support depend on oil sphere.

Analysis of the de-dollarization problem in developing countries on the example of Azerbaijan in the conditions of geopolitical asymmetry

The object of research is the asymmetry of interests in geopolitics between developed and developing countries. In the context of the global crisis, the issue of de-dollarization is relevant from the political and economic point of view. What will be the behavior of small oil countries in this situation is a big problem. Also for them the question remains: how to get off the oil needle in the most painless way? The method used in the study is analysis of the current situation not only from the macroeconomic, but also from the political point of view. Also, the ways of solving the above-mentioned problem by other states are examined in detail, and comparative analysis is conducted in the case of applying these methods to Azerbaijan. Recently there was a favorable situation on the world market for raw materials. Thanks to the global economic crisis, the «resource blessing» has turned into «resource damnation». This theory points to the interrelation between large revenues from the natural resources’ export and the weak economic development of the country, and reflects the suppression of market development and the decline of other economic sectors’ competitiveness, the increase of the national currency, inflation and unemployment. It is difficult to overestimate the role of oil in the economy of Azerbaijan. In Azerbaijan smaller proportion of employed in the industry gives more of GDP, reflecting the predominantly mineral-raw material orientation. The population is the main supplier of resources to the stock market world over. But for Azerbaijan, there no chance on successful development of this economic sector yet. In current conditions, Azerbaijan should treat the idea of de-dollarization more restrainedly. Today, especially during the currency crisis, it is economically unprofitable, not to mention the fact that Azerbaijani raw materials exporters need dollars and Euros to pay off their foreign debts and make purchases on imports to support the extraction of raw materials. The transition to manat, if it takes place, will sharply worsen the competitive position of Azerbaijan in the energy markets. Costs will increase significantly for importers, since they need to buy manat for dollars or Euros, to lose on the difference between the rates of buying and selling. In addition, they would have to spend money on insurance against risks of depreciating manat, and this would also be worth a lot, because manat is a currency, which rate is subject to very high fluctuations. The acquisition of fuel is often done at the expense of a loan. There is a very high percentage of manat loans. Here is one more extra cost for those who would have to buy Azerbaijani fuel for manat. When we force customers to pay extra, we lose them.

TOURISM DEVELOPMENT IMPACT ON THE ECONOMY OF AZERBAIJAN

The aim of this research is to explore tourism development impact on the economy of Azerbaijan. International tourism as a source of both direct and indirect incomes of the state encourages the development of different sectors not specific to the tourism infrastructure, but through the multiplier effect. In this context, the authors analyze the impact of tourism on employment in Azerbaijan and calculate the indirect impact of tourism on the economy of Azerbaijan due to the multiplier effect. The development of tourism in Azerbaijan is constrained by a number of factors, some of which have been analyzed in the paper. Moreover, based on some of the models and data available in Azerbaijan tourism statistics, the authors assess the indirect impact of tourism on the economy in a long term. The results can be used to assess the overall impact of tourism on the economy of the state; to forecast the development of the tourism industry; to forecast the development of related industries; to assess indirect effects of tourism on the growth of population welfare; to forecast the dynamics of change and the efficient use of labour resources; to develop an investment industry strategy; to develop an effective system of taxation, etc.. The following research methods were used: content analysis of tourism development documents, statistical data analysis; comparative analysis, synthesis, abstract and logical construction methods for studying tourism development opportunities.

Economic cooperation between Azerbaijan and Italy

Since restoration of its independence in 1991 Azerbaijan has paid particular attention to development of its political and economic ties with developed market economies. One of the countries which became strategic partner for Azerbaijan is Italy. During recent years Italy and Azerbaijan have signed a number of bilateral documents related to development of economic relations thus creating solid legislative basis for bilateral cooperation. Italy and Azerbaijan made remarkable achievements in developing bilateral cooperation in oil and gas sector, including oil and gas refinery and transportation. Cooperation in this area will definitely continue due to the strategic locations both Italy and Azerbaijan. On the other hand, Italian companies can be also actively involved in development of non-oil sector of economy of Azerbaijan. Forms of cooperation may include 100% FDI, joint ventures, sub-contracting, license agreements, franchising. Cooperation on equity and non-equity basis taking into consideration experience of Italy in developing of small and medium size enterprises (SMEs) could be right direction for expansion of bilateral economic relations. Cooperation with such economically advanced country as Italy would help Azerbaijan to increase further its competitiveness. Besides technical assistance, cooperation with developed market economies will allow Azerbaijan to attract more FDI, portfolio investment, technology and know-how and gradually increase competiveness of its economy.

The Role of Azerbaijani Investments to Turkish Energy Sector in Economic Collabaration of These Countries

This research evaluates the investments of rich oil and natural gas source owner and the most blooming country of the world - Azerbaijan’s investments in Turkey energy sector and its impacts on both these economies. After giving brief information about economy of Azerbaijan, the research analyzes SOCAR’s investment on petrochemical institution in Turkey Petkim which was purchased under Turkish privatization master plan. Star Refinery which began to be built on Petkim peninsula, electric power-plants and port investments were examined under several titles. Additionally, the research gives entire information about the investments on Trans Anatolia Natural Gas Pipeline (TANAP) which was signed at the end of 2011 and evaluates its impacts on Azerbaijan - Turkey Economic Calibrations.

The Investment Opportunities in Non-Oil Sector of Azerbaijan Republic in Modern World

After collapsing of Soviet Union in 1990 Azerbaijan Republic passed into the new period of development like any other post-Soviet countries. Thus Azerbaijan made the transition into market economic system from planned economy. The first years of transition into the market economy Azerbaijan Republic experienced instability in the economic system. During this period the social and market infrastructures were destroyed thus leading to the destruction of the economy. Foreign investors avoided Azerbaijan and they were not interested in opening new businesses in the regions. But the economic and social reforms that were carried on in the country solved this problem in a very short time. The volume of the investments in the economy of Azerbaijan increased very rapidly after the signature of the Contract of the Century. According to the official information the volume of the investment to the economy of Azerbaijan from 1994 exceeded $100 billion dollars. Thus, the invested capital in the first periods was mainly accumulated in the oil and gas sector, i .e. in energy sector. Azerbaijan Republic has already moved into a new stage of development. If the investments in non-oil sectors in the first periods were directed to the establishment of social infrastructure nowadays they are directed to the establishment of new enterprises. Until 2005 foreign investments over-passed the local investments but recently the local investment volume over-passes the foreign investments. There are nutritious conditions for the development of non-oil sector in Azerbaijan Republic.

Methodological Aspects of Estimation of ICT-Based Economic Development

This article is dedicated to methodological aspects of estimation of ICT-based economic development. Information economy development and formation trends in leading foreign countries are analyzed. A comparative analysis of the strategies and trends that form the information economy of Azerbaijan with the developed countries is carried out. In the article comparative analysis of different indicator systems in accordance with formation and assessment of development level of information and knowledge economy is given. Some recommendations about the elimination of problems existing in this field are given. A methodic for calculating Gross Domestic Product (GDP) which forms at the expense of information and knowledge is suggested. A composite index and forming indices, subindices, and indicators system of information and knowledge economy are developed.

The Influence of the Global Financial Crisis to Azerbaijani Economy

The global financial crisis influenced the economy of the government, because of the speedy integration of Azerbaijan to the world economical system and wide economical relations with developed and developing countries. If we pay attention to the general economy of Azerbaijan, we can see the main reason of GDP growth, the inflation tempo’s coming down, decrease of the unemployment and increase of the tempos of other positive economical developments is increase of oil prices and oil production. After the global crisis, decline in oil prices in the stocks has created some difficulties for government economy. In this article the influence of the global financial crisis on Azerbaijani Economy on the micro and macro levels, including oil and non-oil sectors, agricultural sector, trade volume, state debt, state budget and direct investments have been analyzed.

Azerbaycanin Hollanda Hastaliği Problemini Önleme Stratejilerinde Türkiye Ile Yapilan Ekonomik Ilişkilerin Önemi (Importance of Economic Collaboration between Azerbaijan and Turkey in Preventing Dutch Desease in Azerbaijan)

In this research evaluates the investments of rich oil and natural gas source owner and the most blooming country of the world - Azerbaijan’s investments in Turkey and its impacts to preventing Dutch Disease problem Azerbaijan economy. After giving brief information about economy of Azerbaijan, the research analyzes SOCAR’s investment on petrochemical institution in Turkey Petkim which was purchased in Turkish privatization master plan. Star Rafinery which began to be built on Petkim peninsula, electric power-plants and port investments were examined under several titles. Additionally, the research gives information about the investment on Trans Anatolia Natural Gas Pipeline (TANAP) which was signed at the end of 2011 and evaluated its impacts on Azerbaijan Economy.

Azerbaijanns Economic Model and Its Development Since Independence

Obtaining independence on November 18, 1991, the Republic of Azerbaijan entered a long lasting transition period with different stages, which lasted till 2010. During this period, the economic development of the country experienced several cycles: firstly, the recession (19921995) recovery (1996-1997), boom (1998-2008) and final slump (starting 2009). Nevertheless, despite all the above-mentioned, the average growth rate of the economy of Azerbaijan during the 20 years since the country restored its independence has been characterised with positive results particularly due to the rapid growth in the second decade. In 2008, the GDP production in Azerbaijan was twice more than that of 1990. According to the results of 2010, Azerbaijan was ranked the 72th country of the world for of the GDP with a national income of USD 54.37bln2. Analysis and assessment of the lost opportunities and lessons learnt over the last 20 years indicate that the efficiency of resource utilization in replacing quantity indicators by quality indicators was not adequately efficient. Thus, the rupture of traditional economic relations at the beginning of 90s, e.g. after the collapse of the Soviet Union on the one hand and the war with Armenia and the occupation of Nagorno-Karabakh and adjacent regions to it by Armenia on the other hand might be considered as decisive objective factors causing decline or regress of the economy in the initial years of independence. Nevertheless, alongside with this, the delay of economic transformation reforms due to various reasons, including the pending liberalization of prices and de-nationalization measures in comparison to other post-soviet countries prolonged the period of transformation of Azerbaijan’s economy from regress to revival. For this reason, the first decade of independence is memorized as the exit from the crisis with reform initiatives to ensure transition from one economic system into another. Afterwards, starting from the middle of the second decade of independence, increasing oil revenues caused a delay in existing reform initiatives by setting at rest the government, which slowed down the liberalization efforts and set back the course of establishing institutions envisaged for ensuring the sustainability of the economic growth. In parallel, during the period of re-obtaining its independence, Azerbaijan became a member of authoritative financial and political organizations such as World Bank, International Monetary Fund, European Bank for Reconstruction and Development, Islamic Development Bank, World Customs Committee. It also joined the European Neighbourhood Policy and the Eastern Partnership Program

Evaluation of Macroeconomic Condition in Azerbaijan in 2010

This analytical review had been prepared by the experts of the National Budget Group with the aim to evaluate macroeconomic activity in Azerbaijan in 2010. Basic macroeconomic indicators (GDP, employment, income of the population, foreign trade, foreign investments, poverty, etc.) of Azerbaijan in the recent 5 years (2006–2010 years) were analyzed in the presented review in the background of global economic processes observed in the world. Dependence of fiscal parameters on oil revenues, state investments and infrastructure expenditures, social policy (education, healthcare, social protection), taxation and administrative reforms, main parameters of monetary policy (money supply and inflation rates, real effective currency rate variations, credits, interest rates) and state of banking sector during the analyzed period were subjects of research in this paper. It was revealed as a result of conducted research that the economy of Azerbaijan for recent years including 2010 demonstrates decline in dynamics of real economic growth rate; in addition, it was determined that there is a risk of deficiency in technological productivity of the current economic growth originators necessary to maintain sustainable economic growth rate. The research showed that the main impelling power of GDP in Azerbaijan economy is the actual final consumption, and there is no unique tendency in the role of export and saving. High dependence on raw oil, natural gas and oil products still remains in export operations which are the main components of the GDP. In addition, the research defined that “Deindustrialization symptom” of “Dutch disease” intensified in Azerbaijan’s economy with diminishing share of industrial and agrarian sector and relative expansion of share of the service sector in the GDP structure. Analyzes show that less share of nominal growth and nominal volume of GDP was provided by non-oil sector as compared to the oil sector; however, non-oil sector, particularly its construction segment, continues to hold the leading place in the investments made in economy; the poverty level is gradually decreasing, whereas employment level and nominal incomes of the population are increasing in Azerbaijan. Simultaneously, there is a problem of labour productivity in the economy, including serious salary differences between oil and non-oil sectors.