The progress of foreign direct investment after independence in Azerbaijan

The deficiency of savings in developing countries is considered as one of the most serious obstacles for economic growth. Foreign direct investment, therefore, plays a crucial role in ensuring developing countries' economic growth. Having broken-up of the Soviet Union in 1991, Azerbaijan gained its independence and made some reforms based on market economy conditions by abandoning centrally planned economy. "Contract of the Century", is the most important one of these reforms, has let foreign capital through the country. The country's oil and natural gas resources attracted foreign capital's interest and initiated the flow of direct foreign investment into the country. The goal of this study is to investigate the politics of Azerbaijani economy in the process of transition into the market economy and development of foreign capital investment in country's economy by years. This study consists of two chapters. The theoretical background and classification of foreign direct investments, and multinational corporations are discussed in the first chapter. Then, the determinants of foreign direct investment and its impacts on the economy are held. The second chapter also involves overall picture of foreign direct investments in the world. Lastly, the guideline about Azerbaijan Republic, Azerbaijan's the transition process to market economy, investment climate, and investments made in Azerbaijan economy are examined. Azerbaijan's economic outlook after independence and the progress of investments directed to the Azerbaijani economy is examined through the figures and graphs made by the writer. Key Words: Foreign Direct Investment, Transition Process to Market Economy, Reform Made After Independence, Contract of the Century.