Development of Non-Oil Sector in Azerbaijan: Tendencies and Opportunities

Abstract

In the years of independence, the oil industry played great role in the economic development of the Republic of Azerbaijan. The state budget has been enlarged significantly at the expense of revenues gained due to rapid development of oil sector. The development of oil industry has created great potential for non-oil sector and economic development in the country's regions. Since 2003, a number of state projects on non-oil sector of economy, including service sector, transport, social infrastructure and tourism, have been realized in these regions. However, many measures are to be conducted further in order to provide sustainable economic development as well as eliminate the sharp differences between the region of capital city and peripheral regions in terms of development. At this stage, it is important to develop manufacturing areas and service sector in the regions of Azerbaijan, production of which would be oriented on meeting requirements for foodstuffs as well as valuable and exported products. The objective of this study is to define priorities and prospects of development of non-oil sector, with taking into consideration the existing economic situation and the realization of State Programs on socioeconomic development in Azerbaijan Republic. The study is based on statistical, comparative and empirical methods. References include author’s works on the problem as well as the official documents and data of relevant state agencies. Conclusions of the study are reflected on recommendations given by the author concerning development of economic areas and the future priorities of the regions of Azerbaijan.