Non-oil sector in Azerbaijan: structural changes and growth dynamics

The formation and development of the non-oil sector in the Republic of Azerbaijan is one of the main priorities of the country's long-term economic strategy. In recent years, a consistent state policy has been implemented to expand the non-oil sector in order to reduce dependence on oil revenues, diversify the economy and ensure sustainable development. Within the framework of this policy, agriculture, industry, tourism, transport-logistics, information and communication technologies, service sectors and small and medium-sized enterprises have been formed as the main pillars of the non-oil sector. The purpose of this study is to examine the structural changes, development dynamics and role of the non-oil sector in Azerbaijan in economic diversification policy. This study provides a comprehensive analysis of the structural transformations and development dynamics within the non-oil sector from 2010 to 2023. The study shows that there is a high positive correlation of 0.81 between non-oil exports and GDP. At the same time, this sector has played a significant role in increasing employment, reducing interregional socio-economic inequality and improving the welfare of the population. State investments, preferential credit mechanisms, tax and customs privileges, the establishment of industrial and agroparks have created conditions for strengthening the institutional foundations of the non-oil sector. The findings confirm that the development of the non-oil sector is essential for ensuring sustainable economic growth, increasing competitiveness and strengthening Azerbaijan’s long-term economic stability.