Sectoral analysis of Azerbaijan's foreign investment potential

Economy of the Republic of Azerbaijan has rapidly developed in a very short time right after declaring its independence in 1991. Thanks to the economic reforms carried out by Azerbaijan government in the first years of its independence when it was considered as one of poor countries in the world, it has made a transition to the market economy soon. It has solved social problems of more than one million people in the Nagorno-Karabakh conflict, increased national income, built and renovated strong economy and country, increased its foreign exchange reserves and managed to enter the list of world 's fastest growing economies. At the beginning of the progress, the greatest factor contributing to the development of Azerbaijan economy has been the economic reforms that envisage the rich oil and natural gas deposits, the investment of these deposits and the capitalization of foreign investment for the world market. Thanks to the foreign investments made in the oil and gas sector, state revenues have increased in a short time and the main economic problems of the country have been eliminated thanks to the income from this sector. The main indicator of Azerbaijan 's economy, which grew at a faster rate between 2010 and 2014, was the increase in oil and natural gas exports and revenues. The increased income of the Azerbaijani people as a result of the increased oil and natural gas revenues, has also led to the development of other branches of the economy. Starting from 2014, Azerbaijani economy started to shrink due to falling oil prices in the world market, crises in the banking sector affected the general economy of the country, decreases in national income and devaluations further triggered this crisis. All this proved once again that Azerbaijani economy grew more and more from the petroleum and natural gas sector and that in the beginning it was foreign investment in this sector. The fact that the foreign investments made in other sectors are not as high as those in other sectors have caused the contribution of these sectors to the economy of the country. Starting from 2014, although the decline in oil revenues led to recession in the economy especially in some sectors, these sectors failed to meet the expectation that they would not develop at the competent level, as mentioned above. The contribution of the foreign investments to be made for these sectors to develop and contribute to the economy of the country in a big way has been mentioned more frequently in the thesis. In this research, the history of the Azerbaijani economy and its present day, as well as the foreign investments made to all sectors of the economy have been eloborated. Moreover, the import and export figures in the sector and the foreign investments made up to this sector, the earnings losses and future perspectives of these investments were analyzed in detail. When the import figures are studied, it is seen that most of the products are imported from other countries and the market share of these products is quite satisfactory. It has been investigated that a large part of the imported food and agricultural products can be produced in Azerbaijan which is very suitable place in terms of natural conditions for this production. xx Detailed information about the advantages and disadvantages of foreign investment is given. For many of the imported industrial products, the presence of raw materials in Azerbaijan, there is a great demand for these products in Azerbaijan and the perspectives of foreign investors on the production of these products are emphasized. In this study, the export figures of Azerbaijan products as well as the import figures have been examined and it has been seen that exports have increased even more in previous years than in previous years. Exports to foreign markets as well as domestic markets of the country in which the foreign investment is made have been highlighted separately and it has been emphasized that it is sensible to make foreign investment in the most suitable sectors for export. In this thesis, the income of the people, the number of foreign citizens coming to the country were investigated and it has been researched whether the necessary sectors were able to meet the demand or not in terms of foreign investment. Finally, a list of all the major investments made in each sector of Azerbaijan economy in 2017 have been included in the research. Most of these sectors and investments are considered to be suitable for foreign investments.