The Role of Special Economic Zones for Diversification of the Azerbaijan

2021-05-13 12:40:36
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The Role of Special Economic Zones for Diversification of the Azerbaijan Economy

Introduction

The countrys economic zonesAzerbaijan, a nation bounded by Armenia, turkey, Russia, Iran, Georgia and the Caspian Sea. Its geography includes the Caucasus spanning in the European and Asian continents. For long, the countrys economy has thrived in industrial activities, tourism, trade, and energy production. With a population of 9.68 million, the nations economic practices have been shifting towards other sectors such as chemical and industries at 5.7%, services at 33.2% and information technology. In combination, the resources implicate a rise in the standards of living in the 54.4%-urban and the 45.3%-rural population. The current GDP stands at 4.5%, a slump compared to the previous rate of 5.8% recorded in the fiscal year of 2014. Globally, the culture of energy production is changing and favoring reliable and sustainable sources over fossil fuels. To that factor, Azerbaijan remains vulnerable to the socio-economic crisis in the event of reduced demand for its oil products. The proposal contemplates the diversification of the countrys economy via implementation of special economic zones based on agriculture, as a primary propellant to safeguard the nations future irrespective of global economic changes in the present or future perspectives.

Problem StatementThe proposed research focuses on the significance of diversification of the Azerbaijans economy via special economic zones in order to prevent the Asian country from depending on oil to boost its economy. Azerbaijan economy needs immediate diversification as the economy relies on oil and gas sector and this is 80% of GDP. We had twice devaluation in last 12 months because oil price goes down day by day so diversification, improvements of other sectors are essential. To make quick changes, implementation of special economic zone in Azerbaijan is suggested. Mainly, the evaluations of the authorities commitment to providing resources in the diversification of the economy through special economic zones in economic sectors have increased the quantity of production in the past decade. However, the research will seek to highlight the depth at which the various subsectors of the sectors have been impacted positively. Climatic changes are evident in the world; hence, Azerbaijan needs to provide critical solutions. If necessary, to solve the changes similarly to other global economies committed to providing resources with friendly production.

Aim of the StudySubsequently, the study would evaluate the influence of eco-friendly practices in Azerbaijan diversification of its economy via special economic zones. Further, the proposed research would address measures that seem to have deterred the anticipated growth in the countrys diversification of its economy through special economic zones with special interest on agriculture in competitive economic sectors (Niksic, et al. 2014). With that, the political, societal, and cultural factors would be contracted to show their contribution to the agro-economic industry. Diversification of the economy via special economic zones plays a significant to economic growth in GDP and GNP levels.

Brief explanation of the proposals structureThe knowledge is apparent to analyze the comparative advantage that Azerbaijan stands with the current diversification of its economy through special economic zones practices. Given that Azerbaijans climate is ranked 9th in the 11 zones existing globally, the nation is an appropriate platform to compete against other diversification of its economy through special economic zones areas in the world. The proposed research would highlight the drawbacks that have hindered the nations diversification of special economic zones growth to the chemical and industrial sectors of the economy. With the inclusion of an analysis of the effects of the domestic per capita income ($17,900 in an average of the worlds $10,613.5), the study will distinguish whether the authorities or the nations population endeavors in diversification of economy through special economic zones investments, specifically in agriculture compared to other economic zones. The study will focus on the countrys evolution with a mixed economic structure to promote its socio-economic incentives towards competitive diversification of economys production (Amsden, 1989).

Problem AnalysisIntroductionArguably, financial products are charged higher in the economy of the country compared to consumables. Statistical reviews indicate that the Azerbaijan is not a member of the EU; hence, the nation needs to sign agreements with the economic bloc for the benefit of increased markets. Notably, EU is an indispensable market for its common diversification of special economic zones policy aimed at influencing the domestic GDP in each of the countries population. Certainly, the perceptions are that the system shall deliver the required necessary measures to curb the prevalence of ill pricing approaches that investors from different countries within the union may impose upon their products. The policies are most salient to enable the union to grow profusely as the rough the implementation of quotas and outputs price moderation enable the investors to relevant incomes from their produce while still enabling the consumers to exchange a certain evaluated amount of money for a particular product quantity. Implementing special economic zone will be helpful as in shanghai and Dubai. There are different kinds of economic zones such as chemical, industrial, manufacturing among others. Azerbaijan has traditional agricultural habits and climate; hence the reason to focus on agriculture as a way of implementation of economic zone.

Practical ExplorationThe revenue in the nation of Azerbaijan has increased by 36% main because in the yester years the prices of oil were going up. However, the proposed study seeks to evaluate the efficiency of Azerbaijan compared to the EU diversification of economy, and the efforts it has shown as significant to growth in the producer-consumer population in the domestic diversification of economy through special economic zones, with special interest in agriculture. Secondly, the region has implemented economic policies to engage its internal investors into organic investing to curb the increasing dependence on imports (Amsden, 1989).

The research will evaluate statistics to assert the effects of the practices, which have continuously been in a rather biased approach in accordance to the influence of the other established industrial and chemical production sectors. To warrant whether diversification of the economy through agriculture guarantee the security and growth of the economy in Azerbaijan, the study will show the socio-economic, geographical, technological, and real GDP welfare with the influence of positive strategies.

Literature Review

Theoretical exploration of economic zones in Azerbaijan

The importance of the studys economic zones of Azerbaijan and proposed policies and principles to the producing and consuming nation is the equated capital distribution, market approaches, and similar pricing approaches despite the level of demand and supply in the individual countries. Considerably, the idea of economic zones of Azerbaijan shows how the current economic policies conform to the needs of the majority nations. But the problems remain that the products quotas imposed by the individual online governments policies through the assertion of incentives and subsidies serve to influence the need for the maximum exploitation of resources through the setting up of economic zones of Azerbaijan (Amsden, 1989). Therefore, the proposed research will evaluate the aspects that may serve to influence a rapid rate in growth of the economic segment through setting up of economic zones of Azerbaijan in agriculture to enhance diversification.

Azerbaijans application of fiscal, monetary policies to cost-benefit growth in the diversification of its special economic zones sector has been shown over the years. After the negotiations about the multiannual framework, the capital to cost-benefit analysis is perceived as an essential tool to draw the producing stakeholders to a long-term solution since every economic will be capable of monitoring its internal and external investing practices and the level of demand (Jainzik & Pospielovsky, 2014). The knowledge accrued concerning diversification of special economic zones investment was that overproduction and overexploitation of the organic diversification of economy via special economic zones resources and the economic markets indicate that overreliance on the increased rate of segmental growth may result in high levels of inflation in the Republic (Hoekman, 2004). The aspect is drawn to the use of monetary incentives in financing the profitable segment. Arguably, the revenues created translate to increased currency circulation, which will essentially cause economic implications through the application of the initiative of economic zones of Azerbaijan.

Azerbaijan Republics process of towards economic diversification via special economic zones production and consumption seems to be on a slow, especially in sectors such as chemical and industrials sectors of the economy. The multilateral approach has influenced the nations investing sector to become the third best industry at 11%. The organization asserts that the demand and supply of products are currently on the rise with the current statistics revealing a double-digit growth. Arguably, the economic zones information indicates that the goods are available in 3 out of every four stores in the local wholesale and retail markets. However, the economic trends seem to be affecting the Azerbaijans rural to urban migration compared to other nations (Petrick et al., 2013).

Problem Definition and DemarcationThe economic importance of the diversification via special economic zones approach is beneficial to the economic sector, which realizes that the use of the common diversification of special economic zones policies would lead to the execution of equated market practices as all organic investors will be capable of presenting their products to the market with uniformed products prices for every category (Lall, 2004). Such a policy is also of value to the growth and nurturing of market unity since the countries perceive that they are exercising similar measures and not a certain economy is trying to exploit the exporting or importing markets by setting prices at the increased level. The study will apply...

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