The Azerbaijan Economy and the Development of Non-Oil Sector

The social and political processes which started in 1980s, resulted with the collapse of the USSR, and all republics of the union became independent. One of the first countries to achieve independence in those years was Azerbaijan. On 18 October 1991 Azerbaijan declared itself independent. Azerbaijan has enormous natural resources which caused the development of economy. Azerbaijan's most significant asset is the oil and gas capital. The oil industry has played a great role in the economic growth of the Republic of Azerbaijan in the years of independence. The energy carriers own the major part of exports which shows how important the energy sector is in the economy of Azerbaijan. For this purpose it is necessary to use energy resources relevantly. The state budget was massively increased at the cost of revenue generated from the rapid growth of the oil industry. The growth of the oil industry produced great potential in the regions of the country for the non-oil sector and for economic development. The paper findings are assertive that the dropping oil prices and the production of oil have increased the economic share of the non-oil field. Several state projects on the non-oil sector of the economy have been realized in these regions since 2003, including service sector, transport, social infrastructure, and tourism. Nevertheless, several more steps are to be taken to provide sustainable economic growth as well as reduce the significant regional gaps between the capital city region and peripheral regions. At this stage, it is important to develop manufacturing areas and service sectors in Azerbaijan's regions, the production of which would be geared to meeting food requirements as well as valuable and exported products. The main goal of this study is to identify priorities and prospects for non-oil sector growth, taking into account the current economic situation and the implementation of state socio-economic development programs in the Republic of Azerbaijan. The research is based on methods which are statistical, quantitative, and empirical. References include works which are done by professors and specialized authors on this subject, as well as official documents and data from relevant state agencies. The conclusion of the study is based on the creation of economic areas and future goals of Azerbaijan's economy.