Oil Sector of Azerbaijan in 2020 and its Implications for the State Budget

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.

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An Unlikely Hero – How Gold Can Aid Manat?

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…

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Fiscal Rule of Azerbaijan: A Positive First Step?

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…

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Comparative Advantage of Azerbaijan

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?

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How much is Azerbaijan integrated into the world?

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?

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Protectionism or Free Trade?

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%[1]. 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[2]. Considering this statistic, how does the new law fit in? and overall, what is going on with protectionism in Azerbaijan?

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Azerbaijan’s Concrete based Economy

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.

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