With a Gross Domestic Product of 46.94 billion USD, Azerbaijan is a nation with a population figure of 9.981 million based on the statistics of 2019. Narrowing on the economic practice of the country, Azerbaijan is a nation where the energy sector is a backbone of the nation’s economy. Speaking of the energy sector, Crude oil and related natural gases is the key revenue source of this nation. Half of the economy is driven by the energy sector. The other half is partly divided into two where one part larger depends on the energy sector indirectly as corporates and workers where a few people major in agriculture. Well, that was in the past, the nation since independence has greatly grown through a commanding reform in the realm of economical scalability and growth.
Some of the major milestones achieved in the economy of Azerbaijan is the privatization of various economic activities in the nation. One of them is the agricultural sectors where land is equitably distributed across individuals of different capacities. Large scale owners, medium scale owners and small-scale owners are the three categories where private farmers with different capability enjoy. Although agriculture is reforming, only 6% of the profit yield facilitates the growth of GDP of this country. The reset practices such as tourism are still off the grid. The reforms done to steer the economy of this country is gradual but at the same time rapidly growing. Reforms are needed to save the volatile oil dependent economy. Below is a description of reforms that can save a volatile oil dependent economy.
How reforms can save a volatile oil dependent economy
There are a few major economic realms that are key determiners in the reform process of an economy. More of economic growth, law is one of the key fields which boost the economy of a nation. Technology is another factor, followed by human capital and so forth. Below is how reforms can save a volatile oil dependent nation.
Technology is the current backbone or rather the spine of a nation’s economy. For over 10 years, there are many opportunities which have been brought about by technology. Scalability is one of the key advantages of technology. If technological advancements are injected in a given economy, creation of jobs is effective. For a nation depending on oil, the adoption of technology will double the rate at which non-oil revenue flow is generated in a country. Automation of labor, meaning new chances of survivors will be introduced.
Technology is accessibility of information. Information concerning agriculture and other income generating attributes is merit-full thus the growth of an economy. Communication is in the category of these reforms. Better communication infrastructure is the beginning of advancements and growth of the economy. Ease in communication promotes global partnership. A nation which grabs the way of technology also increases self-employment. Many people have started their online empire thus improving their standards which also results in the growth of a nation.
How easy it is to acquire accurate statistics on any given industry, how easy it is to get weather reports on any given region if I am going to invest in agriculture, how easy it is to set up a company virtually, how easy it is to set up a bank account & so on are the questions which need to be addressed at start. Government needs to make sure that such transactions are pain-free & non-time consuming.
Among the major virtues of economic development are the legal statutes of a nation. Set of rules that govern trade need to be imposed in the constitution of a specific nation. Trading laws that promote profiting doctrines such as capitalism need to be enhanced. There is less about the law because law does not scale growth but it creates a harmonious environment for all.
We all know that majority of our constitution was inherited with the collapse of soviet union & it requires a constant update. There have been multiple occasions where big 4 companies put forward proposals on updating certain laws governing business end of our legislative system & however the adaptation of those proposals are quite unhurried. Furthermore, this section includes taxation as well, as one of the main drivers of developing economies. The key driver of the government entities which collect taxes should be sustainability and growth of the economy, especially in countries like Azerbaijan. However I observe daily actions of above mentioned entities and I have to admit that those actions have a hint of intimidation & in some cases extortion towards SMEs. Nonetheless, have to admit that such activities do not reflect the overall vision & strategy set by higher institutions & governing state.
The Reforms of Physical capital or Infrastructure.
Factories, machineries and various infrastructures such as roads are the key drivers of an economical reformed nation. The reason as to why the latter is true is because they create opportunities for investors such as a boosted investment in the tangible capital development of a nation. Investments in machines and manufacturing will definitely reduce the cost of importing raw materials for processing. The development of roads will reduce the cost of transport of the raw material and when all these are combined, a reformed economy of a nation is achieved. Also, increased job opportunity will be a key factor resulting in growth of the nation’s GDP.
In this realm, we have done quite a few things with new industrial parks & port under construction, however without adopting proper advancements which I mentioned before this paragraph, those new settlements will not have enough power to facilitate the expected change to the economy.
In conclusion, oil addiction is a fatal custom because it also affects a nation in terms of global warming. adopting a clean energy routine by investing into clean renewable energy should be promoted. Educating one-self on the hazardous impact of oil also saves in the quest of this form of reform.
The social and political effects of a nation.
Modernization or what is commonly known as globalization is key in the reform of an economy which dwells on Oil and natural substances. Customs, tradition values and belief attributes that are used to explain social factors. Oil economic countries have a sole culture which makes them economically at risk. Culture can affect the growth of such a nation.
In the realm of political factors, governance in general depends on how such an economy will grow. If it’s a non-properly governed state, wealth will revolve around a certain group thus making the larger population at risk. Having a proper functioning government, which continuously creates an ecosystem for a boost of the private sector and an up to date constitution is a reform step to a better economy.
Education and related education system.
By far the most important factor above all. An oil resourceful nation disregards education due to profit associated with the natural occurring substance. Well, the oil well can get exhausted and bring back the nation in a downfall. Education system is a major reform milestone in the strengthening of such economies. New professionals and professions are generated by education thus economic development at a higher rate.
After the above reforms have been imposed, the population of a nation will definitely grow. Growth of a population is a possible human resource that will fill the growing opportunities. A quality education system should result in a nation producing resourceful human resources which will be markable in a global level. The population quality is measured through the skills the inhabitants of the nation possess. Creative abilities are a factor that matters in the reform of such an economy. For the educated, proper training should be done in order to bring a matching nation.
Since March we have observed various organizations cope with pandemic & its distressed effects on economy and the nation. Thanks to media we have also accumulated vast amount of data on how other countries reacted to it as well. Since ATL is operating in various industries we have observed how rules & regulations imposed on the industries & the nation affected our business & businesses of our partners. I personally encountered with so much negativity around that it was very hard to keep a calm state of mind.
I am not an expert on epidemiology or an expert on any related field of this matter. However, as a rational person, I saw how resilient and assertive other governments were in handling this pandemic. Although I applause the effort, I cannot comprehend some of the actions taken during this crisis. I truly believe that we could have done a better job not only as a government but as a nation. On our end ATL tried its best to keep adding value to our community & society. Furthermore, we made sure to not do anything drastic in terms of downsizing and we complied with all the rules & regulations imposed by the cabinet of ministers.
To conclude, I would like to mention that year of 2020 will be remembered as the year of liberation and victory. Our joy of liberation of our lands is endless. It is very significant to understand that there is an immense weight on our shoulders from this point on, as a nation & as a government. We have to make sure that all our actions from now on are focused towards Azerbaijan’s future development, for generations to come. We have portrayed a historic unity in this war & that unity should be transcended towards all our future endeavors. I am proud to be Azerbaijani! Karabakh is Azerbaijan!