The Coronavirus pandemic has affected almost every sector of the global economy in the first five months of 2020. To add insult to injury, the economy of Azerbaijan has been further pressured by the historically low oil prices. In this post, I decided to take a brief look at the oil sector of Azerbaijan today and its potential implications for us in the near future.
In my latest post, I delved into the topic of Azerbaijani Manat’s grim-looking short-term future following the surging demand for foreign exchange in March and concluded that there is a substantial risk of devaluation during 2020. In this post, I am going to share a concept on how the government can at least delay this devaluation for the near future and avoid exacerbating the economic situation in the country already troubled by coronavirus epidemic…
Many of the social, economic and political problems of Azerbaijan can be explained by a multitude of factors. In my opinion, above all, we must recognize the impact of the dysfunctional education system. Therefore, I decided to dedicate my next couple of posts to the national education policy.
As a broad term, fiscal policy refers to the management of taxes and expenditures by governments. It is certainly the number one tool that the governments utilize to intervene into the national economy. That intervention, on the other hand, should have definite restraints, which brings us to the topic of fiscal rules…
State Oil Fund of Azerbaijan (SOFAZ) without a doubt plays a major role in the national economy. Created in 2000, the Fund’s vital role in Azerbaijan motivated me to share my thoughts on the matter…
One of the most predominant principles of international trade is the comparative advantage theory, developed by the British economist David Ricardo in the early 19th century. To put it simply, the theory argues that a country can boost its welfare if it specializes in certain products in which it has comparably lower cost of production (in other words, lower opportunity cost) and then trade with others. Keeping this principle in mind, one may wonder, in which products Azerbaijan can have comparative advantage and how can we use that to maximize our national well-being?
When the global economy was facing a relentless recession in 2008 – 2009 period, Azerbaijani economy was still doing well enough with annual GDP growth of ~10%. Naturally, one may wonder, how come Azerbaijani economy did not went under a recession (or at least stagnation of economic growth) if there was a global crisis going on?
A while ago I came across a news story about imported potatoes. With the decision of Cabinet of Ministers, the tariffs on potatoes are doubled, from the previous rate of 15% to 30%. This might not be a binding decision, because as Minister of Agriculture, Inam Karimov himself mentioned, Azerbaijan’s potato production is two times more than its consumption. Considering this statistic, how does the new law fit in? and overall, what is going on with protectionism in Azerbaijan?
Frequently we hear stories of economic growth propelled by increasing government expenditures. An expansionary fiscal policy achieved with extensive government spending is usually enough to stimulate consumption in times of recessions. On the other hand, in such a situation, the resources are not allocated efficiently, and the growth may not be sustainable in the long run.
A couple of days ago I read online that Azerbaijan’s imports during July 2018 was the highest of the year so far. We all know that Azerbaijan primarily imports things like vehicles, telephones, laptops etc. but still couple of questions came to my mind. Particularly, how does our trade balance look once we take oil/gas exports out of the equation?