Foreign Direct Investment in Azerbaijan - the Quality of Quantity

Author(s): Gerald Hübner
Editor(s): Iris Kempe, Matthias Neumann, Robert Orttung, Jeronim Perovic, Lili Di Puppo
Series: Caucasus Analytical Digest (CAD)
Issue: 28
Pages: 2-6
Publisher(s): Center for Security Studies (CSS), ETH Zurich; Resource Security Institute (RSI), Arlington; Heinrich Böll Foundation, Tbilisi; Research Centre for East European Studies, University of Bremen
Publication Year: 2011

Azerbaijan is one of the largest recipients of Foreign Direct Investment (FDI) in the Eastern European/South Caucasus Region. Its success comes from its attractiveness as a resource-rich country. These investments were an important catalyst for the start of the country's impressive economic boom. But investments outside the oil sector remained very low. Hence, FDI could not produce its full potential: a broad transfer of international know-how, management and technology combined with sufficient funds for other sectors of the economy. The country underperforms in these areas and is only able to cover its losses with huge transfers from oil profits. The time is ripe for Azerbaijan to break new ground.

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