Contract of Century initiated by National Leader had big push in Azerbaijan's economy

Azerbaijan has achieved unprecedented development in the last 30 years. Azerbaijan's GDP increased 175 times, and GDP per capita increased 130 times. However, this development was achieved mainly due to the income from oil contracts.

Despite all these developments, Azerbaijan previously suffered from the Dutch Disease, like many oil-producing countries in the world. The countries suffering from Dutch Disease can be vulnerable to many international threats. The COVID-19 pandemic has proven this once again. Therefore, the state of Azerbaijan has taken a number of measures to diversify the economy. As a result of these measures, the share of oil in Azerbaijan's exports fell to 50 percent in 2022.

Speaking to Azernews Economist Parviz Heydarov noted that after gaining independence, Azerbaijan took the oil factor as the main measure in order to restore the country's economy, to ensure the arrival of foreign currency to the country. The signing of the Contract of Century by the National Leader Heydar Aliyev played a great role in the development of the country.

“Whatever achievements Azerbaijan has had in the development of the country's economy in the past, it was due to the revenues obtained from that agreement. The oil field is a field that has a boom period, a peak period, and a downturn period. We experienced a period of growth after 2010. After that was considered the peak point. For more than 10 years, we have been experiencing a period of declining production in the oil field, but today, if we look at the size of the Azerbaijani budget and compare the population with the 1990s, we have to compensate for the decreasing income. In order to maintain the sustainability of economic development, we need to achieve the development of the oil sector. It is true that the projects related to the gas field in recent years, the start of gas export of Azerbaijan to Europe promise new currency flows, but the price of gas is lower than oil, so it would be absurd if we rely on gas. In 2015, the sharp drop in the price of oil in the world markets led to the 2-fold devolution of the manat. After that, it was proven how important the development of the non-oil and gas sector is. Starting from 2016, new steps were taken in the oil and gas field. At present, our potential in the oil and gas field has expanded. "Azerbaijan has started exporting non-oil and gas products,” the economist said.

Parviz Heydarov pointed out that for the first time in 2022-2023, oil made up 50 percent of the total exports of the country and gas comprised 40 percent. He stressed that the diversification of Azerbaijan's oil and gas exports and planning of energy exports in new sectors is a positive indicator of the development of the country's economy.

Besides, one of the notable aspects of this diversification is Azerbaijan's ambition to export its electricity to Europe. By venturing into renewable and alternative energy sources, the country aims to establish itself as a major player in the global energy market. This forward-thinking approach not only promotes environmental sustainability but also positions Azerbaijan as a dynamic contributor to the evolving landscape of international trade and energy cooperation.

“The focus on the Green energy field is related to the depletion of energy resources. Investing in green energy is only appropriate if the natural resources are available in the event of oil and gas depletion. The agrarian field, agriculture, agricultural products processing industry, and tourism are good development areas for the future. We have enough agricultural processing plants in districts of Azerbaijan. Our liberated territories are also an additional contribution and potential to tourism. If this area is given attention, it can become a good development sector for the future,” the economist added.