The Importance of Natural Resources for The Azerbaijani Economy

Year 2021, Volume: 3 Issue: 1, 117 - 131, 30.06.2021

Anar Muradov

Abstract

Azerbaijan’s natural resources attract the transnational corporations from the developed world and increase investment projects in oil industry. The development of the petroleum industry has significantly increased the GDP of the country since 1994. The paper will focus on natural resource contracts. Their impact on GDP growth, oil industry, and regional economic integration will be described through two important contracts. While all assistance is welcome from oil corporations, the paper claims that the Azerbaijani Government must consider disadvantages of oil and gas exploration projects, because the negative results can impede upon the country’s economic development in a long run. Descriptive explanatory discussion method is used in this research paper by referring to the information from works of scientists and organizations. The goal of this paper is to show that Azerbaijan currently benefits from investments of oil corporations, but may suffer negative consequences in a long run as observed in other oil-rich, post-Soviet countries. There is a suggestion that it may be possible to predict those problems and make new efforts in order to prevent the state from facing economic stagnation in the future.

Keywords

Azerbaijan, Oil industry, Contracts, Corporations, Investment

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