Page 104 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.77, # 1, 2020, pp. 100-112

The next section of the paper outlines the sources of the data, methods and main
variables employed. The third section presents the results. The fourth and the fifth
sections provide a discussion and conclusion, respectively, and argue for the need
for further studies on the Dutch disease phenomenon in the economy of Azerbaijan.

Figure 3: Real Effective Exchange Rate Figure 4: Current Account Balance (% of
(1997=100%) and Mineral Exports, % of total GDP) and the ratio of mining output over the
exports. manufacturing output
140 40,0 4,5
120 30,0 4
100 20,0 3,5
80 10,0 3
60 0,0 2,5
40 -10,0 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2
20 1,5
-20,0 1
0 -30,0 0,5
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 -40,0 0

Real Effective Exchange Rate Currenct Account Balance, % of GDP
Mineral exports Mining/Manufacturing Ratio

Source: Islamic Development Bank, SSCRA Source: World Bank, SSCRA and author’s
and author’s own calculations own calculations

2. DATA AND METHODS
To analyze the effects of the so-called Dutch disease in terms of employment in
Azerbaijan, data provided by the State Statistical Committee of the Republic of
Azerbaijan (SSCRA) from 2000–2018 is utilized. Also, the data from Central Bank of
the Republic of Azerbaijan (CBAR), British Petroleum (BP), reports of State Oil Fund
of Azerbaijan (SOFAZ), Islamic Development Bank, and World Bank have been
operationalized. The data range is between 2000 and 2018, which excludes the 1990s
due to the many outliers that decreased the reliability of the outcomes of the analysis.

The sectors analyzed include mining, manufacturing, agriculture, and services. The
data are based on the numbers of employees in the economy. The mining sector
mainly consists of the oil and gas sectors, while manufacturing refers to the
production of processed raw materials, and the agriculture sector encompasses
forestry and fishery employment data. Services consist of construction, trade and
repair services, financial and insurance activities, transportation and storage, public
administration and defense, education, real estate services, and others.

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