The Necessity of Azerbaijan's Transition from Oil-Based Economy to Multi Sectoral Economy and Agriculture

Though Azerbaijan is known as an oil-rich country in the world, its economic opportunities are not limited only to oil and gas. Azerbaijan has always been an agrarian country, and in the present days agriculture has managed to hold its influence following the oil sector. During the First years of independence agricultural production diminished in important measures. Following the oil treaty, which was signed by Azerbaijan and the world's leading oil companies on 20 September 1994, great economic development took place in the country. The oil sector held the main part of the economy during this development, and the role of the other sectors in export diminished. Along with the growth in the prices of oil in the world market, the share of the oil sector in GDP is increasing. In connection with this, in the production and foreign trade sector a structure which depends on the oil sector has been formed. The oil sector now occupies 97% of the export of Azerbaijan. It is, therefore, important to consider how Azerbaijan economy's dependence on oil can be diminished. This article focuses on the developmental problems of the non-oil sectors, especially those of the agricultural sector and discusses the multi-functionality of agriculture.