Problems Encountered During the Transition to Market Economy in Azerbaijan and Solution Attempts

Turkish Abstract: Azerbaycan 18 Ekim 1991 de bagimsizligini ilan ettikten sonra ekonomisinin liberasyonu ve serbest piyasa ekonomisine gecmek maksadiyla bir cok onemli reformlara imza atmistir. Ekonomik hedeflerin gerceklestirilmesinde ulkenin en onemli kaynaklari ise hemen hemen hepsi Hazar’da yerlesen petrol ve dogal gaz rezervlerinden olusan enerji kaynaklariydi. Bu nedenle ekonomik hedeflere ulasma adina Hazar enerji kaynaklarinin en etkin bicimde kullanilmasi gerekmekteydi ve oyle de oldu. Zira Azerbaycan, ekonomik, siyasi ve sosyal acilardan yeniden yapilanma, kalkinma, gelisme ve bagimsizlik adina, Hazar enerji kaynaklarindan 1994 yilindan itibaren faydalanmaya basladi. Enerji kaynaklarinin uretim ve dunya piyasalarina ihracina iliskin cok onemli projelere karar verildi, insa edildi ve kullanilmaya baslandi.Bagimsizligini kazanan Hazar Havzasi ulkelerinden Kazakistan ve Azerbaycan buyuk petrol potansiyellerini, Turkmenistan ise dogal gaz zenginligini ekonomilerinde degisimi geceklestirmek icin gerekli kaynaklari saglamak ve gecis doneminin sikintilarini hafifletmek amaciyla bir an once kullanma ihtiyaci duydular. Ancak mevcut boru hatlari, Sovyetler Birligi'nin planli ekonomisi cercevesinde cumhuriyetler arasi isbolumune gore duzenlenmis oldugundan, bunlarin ihrac amacli kullanim imkânlari sinirliydi. Sovyetler Birligi'nin dagilmasinin ardindan Rusya disindeki uc kiyi devleti; Azerbaycan, Kazakistan ve Turkmenistan'in bagimsizliklarini ilan etmesiyle Hazar'in onemi buyuk oranda artmistir. Bu ulkeler icin Hazar enerji kaynaklarinin gelistirilmesi ekonomilerini yeniden yapilandirma, kalkinma ve dunya ekonomisine entegre olma acisindan onem arz etmektedir. English Abstract: After re-gaining its independence on 18 October 1991, the Republic of Azerbaijan started to transform to the market-based economy and to integrate into the world economy. The country’s oil and natural gas reserves have been considered the main source for financing range of government programs for reforms. On the one hand, these reserves had to be used effectively; on the other hand, there was a huge demand for foreign investment for extraction. To this end, Azerbaijan has signed “Contract of the Century” in 1994. Although Azerbaijan has wide oil and natural gas reserves, it has faced a number of difficulties in its transition way. This study analyzes these problems and reforms for solving them. One of the types of the problems were related to the economic structure of the former Soviet Union: disruption of the economic ties between the republics resulted in decline of production, high levels of unemployment and prices and consequently led to an economic recession in all of the republics. Another set of problems was related to lack of sufficient institutional bases to transform to the market economy. Moreover, internal conflicts between the political parties and groups for having authority as well as political chaos in the republic can be considered other serious problems during the transition period. Furthermore, Karabakh war and occupation of 20 percent of the Azerbaijani territory by the Armenian military forces had made the situation extremely complicated. Despite all of these extremes, Azerbaijan transformed to the market-based economy decidedly and even became one of the fast growing countries of the world. Even in 2006, with the GDP growth rate of 34.5 percent, Azerbaijan was a leader among growing economies. In parallel with this significant economic development, there is still a need for some socio-economic and institution al reforms in order to get a well-functioned market-based economy in Azerbaijan.