The Republic of Azerbaijan ranks among the top in the world for oil production.
Azerbaijan produces more than half of the world’s output in oil. That figure has declined from the start of the 20th century, when Azerbaijan led the world in petroleum production. The top industries that sustain the country are gas and oil.
The agricultural and industrial sectors are very developed in Azerbaijan. The country puts great emphasis on engineering and on growing the food production. It is also developing its light industries. Azerbaijan loosened restrictions on most goods, and privatization occurred on some state-owned companies. The private land ownerships happened at a slower pace.
In the 1990s, there was oil exploitation under the Caspian Sea. It got complicated because of political instability. There was an ethical conflict with Russia, which claimed the Caspian Fields. There were also disputes about the recent pipeline locations.
Azerbaijan and Armenia often squabble on social media. The two countries still bear a grudge against each other, even after signing a ceasefire agreement in 1994. They still have not resolved a territorial dispute over the region of Nagorno-Karabakh.
In the latter part of the 20th century, Azerbaijan developed its agricultural sector. The country has suitable land areas to cultivate. Forty percent of those lands are under cultivation. Grain, followed by cotton, is the leading product in agriculture. Since the climate is appropriate, there is cultivation of grapes. It aids in Azerbaijan’s wine production. Most of the wine produced goes toward exports.
The fisheries industry of Azerbaijan is important. The fishermen capture the sturgeon fish in the Caspian Sea. It makes excellent caviar which sells on the international market. Sturgeon stocks are decreasing due to the pollution in the Caspian Sea.
Tourism as a Booming Industry
Tourists can’t stay away from Azerbaijan. The medieval architecture is like pollen for tourists, who marvel at the beauty of the structures. They earning many titles worldwide.
The capital of Azerbaijan is Baku. It has a unique culture with influences drawing from the Soviet and Ottoman pasts. In 2000 UNESCO listed Maiden Tower and Shirvanshah’s Palace as world heritage sites. Many tourists visit them to see their historical monuments. According to Lonely Planet, Baku is a Top 10 destination for urban nightlife.
The Khan’s Palace is a Persian architectural building located in Sheki. This palace has beautiful stained glass windows with unique patterns. Architect Gulnara Mehmandarova added it to the list of world heritage sites on July 7th, 2019.
Trade and Investment
A recorded increase occurred in September 2020 in Azerbaijan’s private consumption expenditure. Exports include iron, machinery, petroleum, natural gas, food, nonferrous metals, and chemicals.
Its imports include machinery, food and beverages, iron and steel, meat, and milk.
Azerbaijan’s trading partners are Turkey, Russia, Italy, and China.
Foreign direct investment (FDI) has grown in Azerbaijan. The significant FDI growth is from the gas and oil sector. Yet, the non-oil FDI production has also seen steady growth. The services sector has seen new investments, especially business and retail services.
Most of the new investment projects are in manufacturing and extraction. Even though non-oil investments are rising, there are attractions elsewhere for the FDI.
Azerbaijan needs to diversify its economy if it wants more leverage. In that way, FDI will be able to support small and medium enterprise development. It needs to have a linkage between regional and global production networks. Azerbaijan can do it through the attraction of production-related devices and manufacturing activities.
About Market Research in Azerbaijan
SIS International Research conducts Qualitative, Quantitative, and Strategy Research in Azerbaijan. Methods include Interviews, Focus Groups, and Online Surveys. Contact us now for a consultation on how to build a successful business in Azerbaijan.