Page 36 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.82, # 1, 2025, pp. 36-51

EXPLORING ECONOMIC EXPANSION IN AZERBAIJAN’S

NATIONAL ECONOMY

1
Umudvar Q.Aliyev , Gunay U.Guliyeva 2
1 Department of Economic and Technological Sciences, International Center for

Masters and Doctoral Studies. Azerbaijan State University of Economics (UNEC).
Baku, Azerbaijan. E-mail: [email protected]; ORCID ID: https:/
/orcid.org/0000-0002-5483-8306
2 Department of Business Management, UNEC Business School. Azerbaijan State
University of Economics (UNEC). Baku, Azerbaijan. E-mail: gunayguliyeva@unec.
edu.az; ORCID ID: https://orcid.org/0000-0002- 6782-0770

https://doi.org/10.30546/jestp.2025.82.01.039

Received: November 22, 2024; accepted May 16, 2025; published online July 31, 2025

ABSTRACT
Economic expansion, a broader concept than economic growth, integrates
geographical scope, global connectivity, and qualitative development, yet remains
underexplored compared to GDP-centric analyses. This study investigates economic
expansion in Azerbaijan, a small state with a population of 10.25 million and land
area of 86,600 km², focusing on two dimensions: the restoration of territorial
sovereignty following the 2020 liberation of regions occupied by Armenia (1991–
2020) and the broadening of economic activity through international partnerships.
Drawing on a mixed-method approach—combining a literature review of classical
and contemporary theories (e.g., Schumpeter, 1939; Romer, 1990; Stern, 2006) with
a case study of Azerbaijan using data from 1990–2024 (e.g., State Statistical
Committee, World Bank)—we analyze how Azerbaijan leverages its strategic
position and resources to expand its national economy. Findings reveal that oil-driven
initiatives, such as the "Contract of the Century" (1994), catalyzed initial expansion,
with GDP peaking at $72 billion in 2014, while post-liberation reconstruction ($10
billion invested) and green energy goals (30% renewable capacity by 2030) signal
diversification. Contrasting Azerbaijan with larger states like the U.S., we highlight
its unique reliance on sovereignty, regional cooperation, and investments (e.g., $20
billion in Turkey) rather than geopolitical dominance. Challenges, including oil
dependency and food import reliance ($2 billion annually), persist, but liberated
territories offer new potential. This study underscores Azerbaijan’s model of
expansion, blending resource wealth with structural transformation, and offers
insights for small-state economies navigating global integration and sustainability.

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