Page 61 - Azerbaijan State University of Economics

Nijat Mahmudov: Effects Of Transportation Infrastructure On Economic Growth
In Azerbaijan: ARDl Bounds Testing Approach

This could be achieved through the development of multimodal transport hubs, which
would allow passengers and cargo to easily switch between different modes of transport.
Another challenge facing Azerbaijan's transport system is the need to improve the quality
and safety of the transport infrastructure. The country's roads, railways, airports, and ports
require regular maintenance and upgrading to ensure that they meet international
standards. In addition, there is a need to improve safety measures, particularly on the
country's roads, where traffic accidents are a major problem.

Looking ahead, Azerbaijan has ambitious plans for the development of its transport
infrastructure. The government has identified transport infrastructure as a key priority
in its national development strategy, and it has allocated significant funds to support
transport projects. One of the major projects currently underway is the construction
of the Trans-Caspian International Transport Route, which will connect China with
Europe via Kazakhstan, Azerbaijan, and Georgia. The project is expected to
significantly reduce the time and cost of shipping goods between Asia and Europe,
and it could position Azerbaijan as a major transit hub for international trade.

In addition, the government is also investing in the development of new ports,
including the Port of Alat, which is under construction south of Baku. The Port of Alat
is expected to become the largest port in the Caspian Sea region, and it will play a key
role in the development of the Trans-Caspian International Transport Route.

The idea of a transportation corridor through Zangazur has been around for decades, but
it gained renewed attention in 2020 after Azerbaijan regained its territorial integrity. As
part of the peace agreement signed in November 2020, Azerbaijan was granted access to
Nakhchivan through a land corridor that passes through Zangazur.
The Zangazur corridor has the potential to significantly boost economic ties between
Azerbaijan and Turkey. Currently, the only way for Azerbaijan to reach Nakhchivan is
by air or by crossing through Iran. The Zangazur corridor would provide a more direct
route and could also facilitate trade between Turkey and Azerbaijan. However, the
proposed corridor has been met with resistance from Armenia. The Zangazur corridor
remains a contentious issue, and its construction will likely depend on the progress made
in resolving the long-standing conflict between Armenia and Azerbaijan.

THE EFFECT OF TRANSPORT INFRASTRUCTURE ON ECONOMIC
GROWTH IN AZERBAIJAN
The effect of transport infrastructure on economic growth in Azerbaijan was
investigated in this study. GDP rate was used as an indicator of economic growth and
total investements on transportation infrastructure and freight turnover were used as
indicators for logistics development.

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