Research background: Azerbaijan, as a country with rich mineral resources, faces macroeconomic difficulties due to income instability. In 2011-2013, during the period of high world oil prices, Azerbaijan began to diversify the economy and develop the non-oil sector at the expense of oil and gas export revenues. The need to diversify the economy and export has become especially important in the conditions of increased global competition and the integration of the national economy into the world economy. Purpose of the article: The aim of the issue is assessment and study the characteristics of diversification of the economy of Azerbaijan, analyze the dependence of the country’s economic development on the degree of diversification of its economy and exports, assess the level of economic diversification of the country. Methods: To measure the level of diversification, we used indicators such as Herfindahl-Hirschmann export diversification index, and industry concentration in GDP. The originality and value of the research lies in revelation a number of indicators specific to the Azerbaijani economy that affect economic growth based on correlation-regression analysis and other econometric methods. According to econometric characteristics, the resulting model is adequate and confirms the empirical findings Findings & Value added: The results of the study showed that deeper diversification of the economy is required. To overcome oil dependence and conduct effective economic diversification, it is necessary to develop processing industries, expand the accessibility of small and medium enterprises to financial resources, and stimulate foreign investment in the non-oil sector.
The gradual reduction of fuel resources, their depletion, as well as volatility of fuel prices led to a growing interest of countries in the use of renewable energy sources. Despite the fact that energy production in Azerbaijan currently largely depends on development of hydrocarbon reserves in the country, nevertheless, development of renewable energy sources is certainly one of the strategic priorities of the government. The main objective of the research is to study the economic problems and institutional aspects of introduction of alternative energy in Azerbaijan and develop recommendations to stimulate production of renewable energy. With the help of methods of comparative analysis and dynamic comparisons, the state of development of alternative and renewable sources in Azerbaijan was analyzed. The results of the study show that in order to increase the production of renewable energy it is necessary to take a number of measures in this area: improve legislation, introduce state incentives for consumers of alternative energy, apply a green tariff to attract investment, ensure transparency and consistency of energy policy.
The article reveals the benefits of diversification of industry, measures for overcoming of "curse of natural resources" in relation to the conditions of Azerbaijan and moving from the resource development industry in the country are studied there. This issue has three aims. Firstly, it is disclosure of necessity of diversification of industry, secondly - justification of the benefits of diversification, the third aim - the development of scientifically based recommendations for opportunities of diversification of the economy of the country. Two ways are used for fight against "curse of natural resources": backup of oil revenues in the State Oil Fund of the Azerbaijan Republic and the creation of the necessary political and economic institutions. The results of the research show that diversification is necessary in the countries depending on export of hydrocarbon resources. Diversification of economy of Azerbaijan should be directed to increase in human capital, development of infrastructure, support of financial institutions and stimulation of development of private business.
In modern conditions, the one-sidedness in the economy of Azerbaijan makes it necessary to accelerate the diversification process of the country’s economy. From this point of view, the development of the non-oil sector in the country presents the main priority of the government’s economic policy in Azerbaijan. The purpose of the study is to investigate ways of ensuring the diversification of the national industries in Azerbaijan, which aims to move to a new economic growth model in modern conditions. The study analyzes the economy’s current state and export diversification level in Azerbaijan using the Herfindahl-Hirshman index. As a result of the analysis, the level of diversification in Azerbaijan’s economy and exports was found to be very low (in 2021, the Herfindahl-Hirshman index was 0.23 for the economy and 0.79 for exports). The findings indicate that cooperation between the state and business plays a significant role in increasing the diversification of the economy following the goals of sustainable development of Azerbaijan. On the other hand, it helps stimulate entrepreneurship development in the non-oil sector. One of the ways to solve existing problems in this area is to create Eximbanks to increase the country’s export capabilities of non-oil products. The study offers recommendations to speed up the process of diversification of the economy in Azerbaijan and increase its efficiency.
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