Page 47 - Azerbaijan State University of Economics

Umudvar Q.Aliyev, Gunay U.Guliyeva: Explorıng Economıc Expansıon In Azerbaıjan’s Natıonal Economy

Despite the negative positions of certain countries—namely France, Armenia, and the
Netherlands—toward Azerbaijan, numerous foreign nations, particularly in Europe,
have expressed keen interest in strengthening economic ties with Azerbaijan. This
sentiment has been affirmed by Azerbaijani officials at various international forums.
Such interest was evident at the COP29 event (UN Climate Change Conference)
hosted by Azerbaijan in November 2024 and the Davos Economic Forum in January
2025. During the Davos Forum, Ukrainian President Volodymyr Zelensky declared
that Ukraine had ceased transporting Russian gas to Europe and was prepared to
facilitate the transit of Azerbaijani gas to Moldova and other European countries
through its infrastructure. These developments underscore Azerbaijan’s rising
international prominence and its reputation as a dependable global partner

RESULT AND DISCUSSION
In contrast to large states—where some economically advanced nations leverage their
strengths to exert pressure on others—Azerbaijan has directed its economic growth
toward a broader set of priorities. These include strengthening national security, shifting
from a resource-dependent economy to one driven by efficiency, and progressively
reducing reliance on oil. Notably, the share of oil and oil products in exports has decreased
from 90% to 70%, and crude oil from 80% to 60%. Additional goals encompass fostering
sustainable development of the national economy, creating a competitive economic
framework, raising living standards for its citizens, addressing ecological challenges, and
extending financial assistance to underdeveloped smaller states.
National security has consistently been a top priority for Azerbaijan. The country’s
abundant natural resources and strategic geographical position have long attracted the
attention of major powers. Throughout its history, Azerbaijan has faced threats from
larger states, notably Russia and Iran, resulting in repeated occupations of its territory.
Surrounded by adversarial neighbors such as Armenia and Iran, Azerbaijan could not
fully develop its national economy without first securing its sovereignty and safety.
Establishing a robust defense system capable of countering military aggression has
been a fundamental requirement for achieving this security. Azerbaijan’s economic
growth has generated substantial foreign currency reserves—approximately $70
billion—bolstering its capacity to build a defense infrastructure resilient against
foreign military threats. This capability was demonstrated during the Second
Karabakh War, which began on September 27, 2020, and concluded with victory after
44 days, as well as in the 23-hour anti-terror operation in September 2023 that restored
the country’s sovereignty. Defense expenditures from the state budget are critical to
ensuring Azerbaijan’s national security. In the 2025 state budget of the Republic of
Azerbaijan, defense spending remains a priority, with approximately 8.5 billion manat
allocated for this purpose.

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