Skip to main navigation menu Skip to main content Skip to site footer
FrancoAngeli Journals

Sustainability Governance: Legal, Economic, and Institutional Mechanisms"

No. 2 Thematic Issue (2025): Thematic Issue Sustainability Governance: Legal, Economic, and Institutional Mechanisms, Guest Editors: Karlis Ketners, Vitalii Kotsur

The role of the Non-Oil Sector in Advancing Sustainable Economic Development in the Republic of Azerbaijan

DOI
https://doi.org/10.3280/riss2025oa21079
Submitted
22 settembre 2025
Published
30-12-2025

Abstract

This paper investigates the role of the oil sector in Azerbaijan’s sustainable economic development and its impact on economic diversification, job creation, infrastructure development, and increased export earnings. By analysing data on gross domestic product and investment, the oil sector is shown to be growing steadily, reflecting a gradual shift towards a more resilient and sustainable economic model. The study also examines the role of small and medium enterprises within the non-oil sector and highlights initiatives promoting regional recovery and entrepreneurship. It emphasizes the importance of developing human capital in the oil and non-oil sectors by providing qualified personnel and social support for workers as prerequisites for long-term sustainability.

References

  1. Abdullayev, K., Abdullayev, R., Yusifov, E., Babazade, I. and Fataliyeva, G. (2024a). Main areas of development of the digital economy in the Republic of Azerbaijan. Economics of Development, 23(1): 78-88. Doi: 10.57111/econ/1.2024.78.
  2. Abdullayev, K., Aliyeva, A., Ibrahimova, K., Badalova, S. and Hajizada, S. (2024b). Current trends in digital transformation and their impact on the national economy. Scientific Bulletin of Mukachevo State University. Series “Economics”, 11(1): 9-18. Doi: 10.52566/msu-econ1.2024.09.
  3. Adedapo, O. (2023). Analysis of non-oil exports – Economic growth relationship in Nigeria: The role of institutional qualities. Journal of Developing Areas, 57(4): 107-122.
  4. Al-Abri, I., Önel, G. and Grogan, K. A. (2019). Oil revenue shocks and the growth of the non-oil sector in an oil-dependent economy: The case of Oman. Theoretical Economics Letters, 9(4): 785-800. Doi: 10.4236/tel.2019.94052.
  5. Aliyev, S., Gulaliyev, M., Hurshudov, S., Hasanova, A. and Salahov, F. (2023). Effects of Taxes on the Development of the Non-Oil Industry Sector: The Case of Azerbaijan. WSEAS Transactions on Business and Economics, 20: 2400-2412. Doi: 10.37394/23207.2023.20.206.
  6. Aliyev, S., Gulaliyev, M., Purhani, S., Mehdiyeva, G. and Mustafayev, E. (2024). Comparative Assessment of Energy Security Level: The Case of the South Caucasus Countries. International Journal of Energy Economics and Policy, 14(1): 651-662. Doi: 10.32479/ijeep.14984.
  7. Aliyev, S.T. (2014). Economics of Azerbaijan: Upgrading and implementation of effective instruments. Life Science Journal, 11(SPEC. ISSUE 5): 321-326.
  8. Al-Khalidi Al-Maliki, S. Q. (2021). Increasing non-oil revenue potentiality through digital commerce: the case study in KSA. Journal of Money and Business, 1(2): 65-83. Doi: 10.1108/JMB-07-2021-0022.
  9. Alshubiri, F. N., Tawfik, O. I. and Jamil, S. A. (2020). Impact of petroleum and non-petroleum indices on financial development in Oman. Financial Innovation, 6: 15. Doi: 10.1186/s40854-020-00180-7.
  10. Arnouz, A. and Hamdani, M. (2024). The role of small and medium-sized enterprises in promoting non-oil exports in Algeria during the period 2014-2022. Economic Studies, 23(2): 151-173.
  11. Babayev, B. and Huseynov, P. (2021). Analysis of the impact of Azerbaijan’s oil strategy on the development of non-oil sectors. In: Book of Proceedings of the 70th International Scientific Conference “Economic and Social Development” (pp. 109-114). Baku: Varazdin Development and Entrepreneurship Agency, University North.
  12. Banerjee, R. and Majumdar, S. (2021). The effect of non-oil diversification on stock market performance: The role of FDI and oil price in the United Arab Emirates. Journal of Asian Finance, Economics and Business, 8(4): 1-9.
  13. Ezu, G. K. and Osakwe, C. I. (2023). Effect of non-oil sector on the growth of Nigerian economy (1990-2021). International Journal of Research and Innovation in Social Science, 7(3): 163-173.
  14. Gherghina, Ș. C., Botezatu, M. A., Hosszu, A. and Simionescu, L. N. (2020). Small and medium-sized enterprises (SMEs): The engine of economic growth through investments and innovation. Sustainability, 12(1): 347.
  15. Guliyev, M. and Azizov, T. (2022). Diversification through promotion of export-oriented production and “Green Transformation” in Azerbaijan. Scientific Horizons, 25(10): 62-70. Doi: 10.48077/scihor.25(10).2022.62-70.
  16. Guliyeva, S. (2023). Energy consumption, economic growth and CO2 emissions in Azerbaijan. Multidisciplinary Science Journal, 5(4), e2023052. Doi: 10.31893/multiscience.2023052.
  17. Gyulamirov, G. (2022). A conference on rehabilitation and reconstruction work in the liberated territories of Azerbaijan was held in Shusha. -- https://azertag.az/ru/xeber/2268809.
  18. Hasanov, R. I., Vasa, L., Guliyeva, S., Giyasova, Z. and Shakaraliyeva, Z. (2025). Assessing the impact of oil prices and inflation on bank deposits in Azerbaijan. Banks and Bank Systems, 20(1): 11-22. Doi: 10.21511/bbs.20(1).2025.02.
  19. Hasanova, J. and Najafova, K. (2024). Development of Trade-Economic Relations between Azerbaijan-EU Countries in the Field of Natural Gas Supply. WSEAS Transactions on Business and Economics, 21: 1104-1114. Doi: 10.37394/23207.2024.21.92.
  20. Hasanova, J. and Najafova, K. (2025). Research and analysis of opportunities for regional economic integration among the countries of the Organization of Turkic States. Economics of Development, 24(2): 54-67. Doi: 10.63341/econ/2.2025.54.
  21. Huseynli, N. (2022). Impact of revenues from oil and non-oil sectors on the economic growth of Azerbaijan. International Journal of Energy Economics and Policy, 12(5): 31-35. Doi: 10.32479/ijeep.13278.
  22. Huseynova, A., Mazanova, O., Khudiyeva, P., Muradova, H., Leyla, H. and Kamala, N. (2022). Innovative Way of Solution of “Smart City” in Azerbaijan – City Problems. WSEAS Transactions on Business and Economics, 19: 1394-1402. Doi: 10.37394/23207.2022.19.125.
  23. Ideh, A. O., Okolo, N. M. and Emengini, E. S. (2021). Non-oil sector and economic growth in Nigeria: The national accounts perspective. European Journal of Sustainable Development, 10(1): 185-202. Doi: 10.14207/ejsd.2021.v10n1p185.
  24. Işık, C., Ongan, S., Yan, J. and Islam, H. (2025). Towards carbon neutrality & COP29 Baku / Azerbaijan - COP30 Belem / Brazil: Exploring the impacts of economic, environmental, social, and governance (ECON-ESG) factors on Climate Policy Uncertainty (CPU) for sustainable development. Heliyon, 11(3), e41944. Doi: 10.1016/j.heliyon.2025.e41944.
  25. Karlilar Pata, S., Pata, U.K. and Wang, Q. (2025). Ecological power of energy storage, clean fuel innovation, and energy-related research and development technologies. Renewable Energy, 241, 122377. Doi: 10.1016/j.renene.2025.122377.
  26. Korsunska, M., Butorina, V., Abdullayev, K., Kravtsov, Yu. and Ustymenko, L. (2022). The role of creative potential in the project management process for the implementation of the company’s strategies. Review of Economics and Finance, 20: 255-262. Doi: 10.55365/1923.x2022.20.30.
  27. Krechko, O. and Mikhaylov, A. (2025). Global electricity generation from renewable sources using fuzzy sets and spatial analysis: revolution in solar and wind energy in BRICS countries. Quality and Quantity, 59(2): 1553-1571. Doi: 10.1007/s11135-024-02033-2.
  28. Li, Y., Chen, B., Chen, G. and Wu, X. (2021). The global oil supply chain: The essential role of non-oil product as revealed by a comparison between physical and virtual oil trade patterns. Resources, Conservation and Recycling, 175, 105836. Doi: 10.1016/j.resconrec.2021.105836.
  29. López-Cabarcos, M. Á., Vázquez-Rodríguez, P. and Quiñoá-Piñeiro, L. M. (2022). An approach to employees’ job performance through work environmental variables and leadership behaviours. Journal of Business Research, 140: 361-369. Doi: 10.1016/j.jbusres.2021.11.006.
  30. Mayis, G. G., Shahin, B. V., Shafa, G. T., Yegana, A. J. and Mehpare, O. S. (2021). Granger causality analysis of foreign trade impact on economic growth and some socioeconomic indicators: Case of Azerbaijan. WSEAS Transactions on Business and Economics, 18: 276-283. Doi: 10.37394/23207.2021.18.28.
  31. Mirhoseyni, S. V., Izadi, S. H. and Khorasani, N. (2023). Studying the impact of oil and non-oil indicators on financial development in Iran. International Journal of Multicultural and Multireligious Understanding, 10(3): 76-84.
  32. Nakashydze, L., Gabrinets, V., Mitikov, Y., Alekseyenko, S. and Liashenko, I. (2021). Determination of Features of Formation of Energy Supply Systems with the Use of Renewable Energy Sources in the Transition Period. Eastern European Journal of Enterprise Technologies, 5(8-113): 23-29. Doi: 10.15587/1729-4061.2021.243112.
  33. Ndombi Ondze, C. I. L. (2021). Effects of human capital expenditures on non-oil sector growth in the Republic of Congo. Modern Economy, 12(12): 1748-1767. Doi: 10.4236/me.2021.1212089.
  34. Obo, E. B., Iheanacho, M. U. and Lebo, M. P. (2020). The role of human capital development in a diversified economy. International Journal of Business and Social Science, 11(7): 45-51.
  35. Ogunbiyi, S. S. and Abina, P. A. (2019). The nexus between oil and non-oil revenue on economic development in Nigeria. International Journal of Economics, Business and Management Studies, 6(2): 355-365.
  36. Olowo, S. O., Daramola, K. O., Ogunsanwo, O. F. and Edewusi, D. G. (2020). Sectorial contributions of non-oil revenue to economic growth in Nigeria. Open Access Library Journal, 7(8): 1-21. Doi: 10.4236/oalib.1106644.
  37. Omodero, C. O. and Ehikioya, B. I. (2020). Oil and non-oil revenues: Assessment of contributions to infrastructural development in Nigeria. Journal of Management Information and Decision Sciences, 23(5): 638-648.
  38. Pata ,U. K. (2025). How to progress towards sustainable development by leveraging renewable energy sources, technological advances, and human capital. Renewable Energy, 241, 122367. Doi: 10.1016/j.renene.2025.122367.
  39. Pürhani, S., Guliyeva, S., Teymurova, V., Guliyeva, N. and Gahramanova, S. (2022). Human capital as a driver of sustainable development in Azerbaijan. Journal of Eastern European and Central Asian Research, 9(6): 927-937. Doi: 10.15549/jeecar.v9i6.1199.
  40. Raid, M., Ahmad, N., Bagadeem, S. A., Alzyadat, J. and Alhawal, H. (2024). The non-oil institutional sectors and economic growth in Saudi Arabia. Cogent Economics & Finance, 12(1), 2300819. Doi: 10.1080/23322039.2023.2300819.
  41. Ramsey, D. and El Asmar, M. (2020). Cost and schedule performance analysis of transportation public-private partnership projects. Journal of Legal Affairs and Dispute Resolution in Engineering and Construction, 12(1), 04519032.
  42. Rzayeva, S. M. and Rzayeva ,F. Z. (2020). The investment in the non-oil sector and its state regulation. In: Book of Proceedings Vol. 3/4 of the 55th International Scientific Conference “Economic and Social Development” (pp. 486-495). Baku: Varazdin Development and Entrepreneurship Agency, University North.
  43. Saliu, M. O. (2023). Foreign aids, human capital and economic growth: Evidence from African oil and non-oil producing countries. International Journal of Finance & Banking Studies, 12(4): 57-64. Doi: 10.20525/ijfbs.v12i4.3173.
  44. Shafa, A. (2021). Historical aspects of economic thought in Azerbaijan. Voprosy Istorii, 8(2): 148-155. Doi: 10.31166/VoprosyIstorii202108Statyi41.
  45. Shalbolova, U. Z., Yegemberdiyeva, S. M., Uderbayev, S. S., Elpanova, M.A. and Kazbekova, L. A. (2014). Specifics of oil pipeline systems’ risks management. Life Science Journal, 11(11): 591-594.
  46. State Statistical Committee of the Republic of Azerbaijan (2023). Statistical Yearbook of Azerbaijan. -- https://www.stat.gov.az/menu/6/statistical_yearbooks/?lang=en.
  47. Surya, B., Menne, F., Sabhan, H., Suriani, S., Abubakar, H. and Idris, M. (2021). Economic growth, increasing productivity of SMEs, and open innovation. Journal of Open Innovation: Technology, Market, and Complexity, 7(1): 20.
  48. Valiyev, J. (2023). The role of the existing middle corridor and the planned Zahngazur corridor in the economy of Azerbaijan. Scientific Collection “InterConf”, 144: 34-42.
  49. Waheed, R., Sarwar, S. and Dignah, A. (2020). The role of non-oil exports, tourism and renewable energy to achieve sustainable economic growth: What we learn from the experience of Saudi Arabia. Structural Change and Economic Dynamics, 55: 49-58. Doi: 10.1016/j.strueco.2020.06.005.
  50. Yang, Y., Xu, X., Yin, J. and Zhang, T. (2023). An empirical analysis of FDI and institutional quality on environmental quality and economic growth, evidence from the panel of Asian oil-producing and non-oil-producing economies. Frontiers in Environmental Science, 10, 1066221.