Azerbaijan, with a population of 10,141,756, is ranked 90th in the world, just behind Papua New Guinea. Located in Western Asia, it covers an area of 86,600 square kilometers, ranking 109th globally, just below Croatia.
Azerbaijan’s economy in 2022 is positioned as the 72nd largest in the world with a GDP of $78,721,058,823. The country ranks behind Uzbekistan, whose GDP stands at $80,391,853,887. In terms of GDP per capita, Azerbaijan ranks 85th globally with $7,762.07.
It is surpassed by Belarus, with a GDP per capita of $7,888.26. Despite facing challenges, Azerbaijan’s economy continues to show resilience and potential for growth in various sectors.
What are the economic activities of Azerbaijan?
- Primary activities: 6.1% of GDP.
- Secondary activities: 53.5% of GDP.
- Tertiary activities: 40.4% of GDP.
Primary Sector of Azerbaijan
Azerbaijan’s primary sector, particularly its agricultural activities, thrives due to its favorable climate and rich natural resources. The country’s agricultural land covers 57.84% of its total area. Main agricultural products include milk, wheat, potatoes, barley, tomatoes, watermelons, cotton, apples, onions, and maize.
Despite contributing 6.1% to the GDP, agriculture plays a vital role in the economy. The diverse range of crops and animal products highlights the sector’s importance, providing employment and sustenance for many Azerbaijanis.
The country boasts a diverse geological landscape, leading to abundant natural resources. These include petroleum, natural gas, iron ore, nonferrous metals, and bauxite. These resources drive the economy, with petroleum and natural gas playing a significant role in the country’s energy sector, while iron ore and nonferrous metals contribute to the manufacturing industry. Bauxite is a key resource for the aluminum industry, further enhancing economic growth and development.
Azerbaijan’s oil production ranks 13th globally, with 710,758 barrels per day. Its oil reserves total 7 billion barrels, representing 0.42% of the world’s total reserves.
Azerbaijan’s gas production of 29.37 billion m³ in 2020 ranks 26th globally, fueling economic growth and energy security.
Secondary Sector of Azerbaijan
What is the secondary sector or what are secondary activities?
The secondary sector involves industries that transform raw materials from primary activities into finished products for consumption. In Azerbaijan, the main industrial products include petroleum and petroleum products, natural gas, oilfield equipment, steel, iron ore, cement, chemicals and petrochemicals, and textiles. These products are manufactured for domestic sale and export, contributing significantly to the country’s economy.
Manufactures in Azerbaijan’s total exports only accounted for 4.02% in 2023, indicating their relatively low significance in the country’s export economy.
Tertiary sector of Azerbaijan
What is the tertiary sector or what are tertiary activities?
The tertiary sector in Azerbaijan encompasses various services where individuals provide knowledge and time to enhance productivity and meet needs. This sector deals with intangible goods like advice, expertise, and attention, catering to both consumers and businesses. Key tertiary activities in Azerbaijan include healthcare and medical care, education and training, banking and finance, communication and information exchange, tourism and hospitality, transportation and logistics, and security and protection.
In particular, Azerbaijan’s tourism sector contributes insignificantly to its economy, with an annual arrival of 3,170,000 tourists, accounting for only 0.3126 of its population. This modest figure highlights the country’s reliance on other industries, such as oil and gas, suggesting that tourism is not a primary economic driver.
Another example of tertiary economic activity is the mobile cellular sector, with over 11 million subscriptions, supporting technological growth by enhancing connectivity and fostering innovation across various industries.
Military Activities and Economic Sectors of Azerbaijan
The military is a strong example of various economic activities working together. In the primary sector, resources are extracted for military use, like metals for weapons. The secondary sector focuses on manufacturing military equipment, such as vehicles and weapons. The tertiary sector includes services provided by the military, like logistics and training. Research and development in the quaternary sector helps improve technology, while the quinary sector involves high-level decision-making and strategy.
Azerbaijan’s military expenditure in 2023 is 3,561.7 million US dollars, which is 4.54% of its GDP. The active military force consists of 126,950 personnel. This means there are about 47 active military members for every 1,000 people in the country. These figures show how the military is connected to the economy and its various sectors.
International Trade of Azerbaijan
Import Activities of Azerbaijan
Azerbaijan’s import activities are of high importance, with total imports in 2023 reaching $17.3 billion, accounting for 27% of its GDP.
Azerbaijan primarily imports cars, refined petroleum, crude petroleum, wheat, and packaged medicine. Its main import partners are Russia (17%), Turkey (17%), China (10%), UAE (5%), and Georgia (5%). These imports play a crucial role in meeting the country’s domestic demand and supporting its economy.
Exports Activities of Azerbaijan
In Azerbaijan, exports in 2023 totaled $33,898,554,855.28, representing 60.05% of GDP. With such a high percentage, export activities play a crucial role in driving the country’s economy.
Azerbaijan engages in significant export activities, with Italy being the primary partner at 47%, followed by Turkey at 9%. Key export commodities include crude petroleum, natural gas, refined petroleum, fertilizers, and aluminum. Other notable export partners include Israel, India, and Greece.
Azerbaijan economy challenges in 2024
Azerbaijan faces economic challenges in 2024 due to oil dependence, recent financial bailout, and COVID-19 impact. However, potential gains from Nagorno-Karabakh conflict and focus on human capital offer hope for diversification and retaining youth.
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