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On Financial and Investment Problems in the Context of Regional Economic Development of the Republic of Azerbaijan

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On Financial and Investment Problems in the Context of Regional Economic Development of the Republic of Azerbaijan Journal of Critical Reviews ISSN- 2394-5125 Vol 7, Issue 3, 2020 Review Article ON FINANCIAL AND INVESTMENT PROBLEMS IN THE CONTEXT OF REGIONAL ECONOMIC DEVELOPMENT OF THE REPUBLIC OF AZERBAIJAN Quliyeva Aygün, Eldar qizi PhD in economics,Azerbaijan State Agricultural University,450, Ataturk Avenue, Ganja, AZ2000, Azerbaijan, E-mail: [email protected] Received: 19.11.2019 Revised: 23.12.2019 Accepted: 22.01.2020 Abstract The factors which enable the sustainable development of the regions, the principles and measures of the financial and investment support were determined. The significance of practical conceptual approach to business and investment support of the regional social and economic development was revealed. The importance of financial and investment assistance in the modelling of social-economic development on the regional level, the maximum rational use of the local natural and economic supplies in the formation of the financial resources, and enterprise modelling issues were analysed. There was prepared a structure of regional investment policy formation and implementation system. The main aim of the research is to investigate the problems of financial and investment support modelling of the local social and economic development, to analyse the conceptual praсtical approach to these problems and definition of the adequate mechanisms. Proceeding from the objective situation of the regional social and economic development in Azerbaijan, there was justified a complex functional structure of the regions. The formation factors and implementation ways of preparation mechanisms of the regional investment policy were determined. The directions of strengthening of the finance and credit support of the social and economic development programs were justified. There was also given a scheme of enhancement of the financial and credit support rationality of the regional social, economic development program. The fraction of regions in the total amount of the commercial agents in Azerbaijan was analysed. There was prepared a scheme of essential directions of the multiplicative effect in the social-economic development of the regions. The efficiency issues of the regional social-economic development program in Azerbaijan were analysed. There were presented the dynamics of funds oriented to the nominal capital on areas in Azerbaijan and dynamics of funds geared to the symbolic capital per capita on regions. The current situation of the regional social, economic development in Azerbaijan and production of outputs on the commercial areas were analysed. The dynamics of outputs production per capita in the main fields of economics region-wise and the dynamics of industrial production volume region- wise were also presented. Generalized, the factors were determining the strengthening of financial and investment support of the regional social-economic development. There were shown the ways of a strategic approach to the commercial and investment support of the social, economic growth in the regions in the short and long terms in Azerbaijan. There were prepared suggestions and advised on the issues reviewed in the article. Keywords: Azerbaijan, regional economic policy, social and economic development, financial and investment support, interregional economic development differences, regional natural resources, local economic potential. JEL classifications:R1; R10; R11; R13; R53; R58. © 2019 by Advance Scientific Research. This is an open-access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/) DOI: http://dx.doi.org/10.31838/jcr.07.03.111 INTRODUCTİON AND RESEARCH OF THE PROBLEM programs itself. From this point of view the national The economics of Azerbaijan appeared for the element of the commercial interests, the economic development tendencies of former Russian Empire during the long period of 70 years the country and especially the perspectives of regional (1920-1990). Back then, there were no available capabilities for development modelling grew up. It is interesting that on the development of the economic modelling of the country or January 15, 1992, the law about ‘Foreign investment protection’ regional development programs. Everything was solved in the was adopted. The rule about ‘Investment operations was put in centre – in Moscow. Other ways of saying Moscow determined force on January 13th, 1995. It means that during a short time the programs and economic development tendencies which it after the restoration of independence the government of considered necessary for Azerbaijan. The resources were also Azerbaijan was quite interested in bringing foreign investments divided from the centre. It is worth to mention one interesting to Azerbaijan and in increasing the attractiveness of these detail: for example, in Sumgayit industrial centre the two huge processes and took active measures in this field. It is known that chemical enterprises were separated by just a fence, but these the realization of the economic reforms is impossible without two plants did not have a right on an independent division of financial resources and the balanced regional social and resources and raw materials between them. This issue had to economic development programs require the severe level of be reviewed three thousand kilometres away in Moscow, and finance and credit maintenance. Formation of sustainable and the work had to be done based on the solution received from continuous financial support and adequate modelling of the there. All the financial problems were solved the same way. The local development to the national economic interests of the government of Azerbaijan could not independently divide the country depends on each other very much. financial resources, and allocate funds for development programs of the regions. Imagine that the issue of construction For this reason, making investments to the regions is one of the of any infrastructure object in a distant village in Azerbaijan required fields of activity of the Azerbaijan government in its was solved in Moscow and the financial resources were also economic policy. The objective scientifically and practical allocated from there. Of course, all these became history. After approach is the main criteria in this article. Our main goal is to the restoration of independence in 1990 Azerbaijan had already reveal the modern essence of the balanced regional social and to conduct a free economic policy, social, economic reforms and economic development in Azerbaijan, to show the local to solve the issues of preparation of the regional development problems. For this reason, we did not want to overload the article with the current economic theoretical views and Journal of critical reviews 631 ON FINANCIAL AND INVESTMENT PROBLEMS IN THE CONTEXT OF REGIONAL ECONOMIC DEVELOPMENT OF THE REPUBLIC OF AZERBAIJAN approaches; in the report alongside with avoiding these of view. The author thinks that there are not any results in thoughts we gave preference mainly to find the solution of the solution optimization of the issues of finance and investment problem by the benefit of the social and economic stability supply modelling yet, and the researches and investigations in already existing in modern Azerbaijan and economic this sphere should be continued. development tendencies. The contemporary scientific and practical standpoints on the increase of the finance and credit The possibility of the contribution of the article to global supply of the regional development programs in Azerbaijan are economic science. We think that the ideas about the regional covered in the article. Alongside with all these under the social and economic development problems and its finance and circumstances of global economic challenges of the local social investment supply, the approaches to the issues, specific and economic development and critical economic characteristics, modelling of the solution of finance and transformations the definition and measurement of tendency investment supply of the regional social and economic direction, the preparation of the sustainable mechanisms of the development on the country level can attract the attention of finance and credit supply in the processes and suggestions for global economists, researchers and experts, the state implementation stand in the centre of the reviewed problem. authorities responsible for this sphere. From the other hand, The aim is quite actual and essential, but the challenges ahead Azerbaijan differs with dynamic economic development in a are much more complicate. First of all, we сconsidered positive meaning. Because of this, the development of the social necessary to give our opinion to the researches on these issues, and economic development programs and the materials, to the arguments mentioned in the economics literature, to the analysis and judgments on their finance and investment supply scientific approaches and thoughts, and statistic and the other modelling keep their chance to become a contribution to global databases, and explore the study level of the given issues. economics. The issues covered in the article. I generalize the topics LEVEL PROBLEM STUDY AND LİTERATURE REVİEW covered in the report are mainly connected with finance and As mentioned above, taking into consideration the modern strong investment supply modelling of the regional social and economic transformations and complexity of global economic economic development in Azerbaijan. First of all, it is appeal, we decided that usage of last years economic
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