REPUBLIC of AZERBAIJAN UN DEVELOPMENT PROGRAM Azerbaijan
Trends of improving the competitiveness of regional economy (An example of Lankaran economic region)
BAKI - 2009
AZ 1011, Republic of Azerbaijan, Baku city, H.Zardabi Avenue, 88a Telefon/Faks: +994 12 4300215, E-mail: [email protected] Website: www.ier.az
UN Development Program (UNDP) is the UN's global development network, advocating for change and connecting countries to knowledge, experience and resources to help people build a better life. We are on the ground in 166 countries, working with them on their own solutions to global and national development challenges. As they develop local capacity, they draw on the people of UNDP and our wide range of partners.
EXECUTIVE SUMMARY
One of the main goals of the economic policy carried out in the Azerbaijan Republic in recent years has been to achieve the social and economic development of the regions. A wide range of activities has been implemented in country to support this goal and this process is still underway. In order to promote the high social and economic development of the regions in country, to further improve the people’s living standards, to enhance the effectiveness of using the current capacity in regions, to ensure the creation of new jobs, the development of various fields of industry, as well as the agrarian sector, the expansion of processing agricultural products, and to implement other sets of activities, the President of the Azerbaijan Republic approved the State Program on Social-Economic Development of the Regions in the Azerbaijan Republic (2004-2008) on February 11, 2004, and the State Program on Social-Economic Development of the Regions in the Azerbaijan Republic (2009-2013) on April 14, 2009. Despite all the work carried out, the fact that the social and economic development level of the regions is still lagging behind, calls for implementation of research in this area. First of all, it is important to investigate the issues on improving the competitiveness of regional economy. From this standpoint, researching the issues related to the improvement of economic competitiveness in the Lankaran economic region is of utmost importance. The research work has studied the status of the region in recent years. The studies employ M.Porter’s “National rhombus” and the cluster approach used in assessing the regional competitiveness. The research work has been carried out using the comparison, statistical analysis, logical generalization, and other methods. The studies have identified a weak exercise of the economic capacity in the region. Suffice to emphasize that 1.7 percent of the total product output has been produced in the Lankaran economic region, which constitutes 9.2 percent of the country’s population and 7% of the overall territory.
CONTENTS
SUMMARY
INTRODUCTION
CHAPTER 1. THORETICAL AND METHODOLOGICAL FOUNDATIONS OF IMPROVING THE COMPETITIVENESS OF REGIONAL ECONOMY 1.1. Theoretical foundations of regional competitiveness 1.2. Literature review
CHAPTER 2. THE PROBLEMS OF UNEQUAL DEVELOPMENT IN AZERBAIJAN’S ECONOMIC RAYONS (REGIONS). DIVERSIFICATION COEFFICIENT
CHAPTER 3. ASSESSMENT OF A REGION’S COMPETITIVENESS LEVEL 3.1. Methodology 3.2. Assessment of the level of the Lankaran economic region’s provision with economic resources 3.3. Analysis of the current status of a social and economic development of the Lankaran economic region 3.4. Assessment of the progress level of the infrastructure sectors in Lankaran economic region 3.5. Assessment of the entrepreneurship environment 3.6. Assessment results
CHAPTER 4. TRENDS OF IMPROVING COMPETITIVENESS OF THE LANKARAN ECONOMIC REGION 4.1. Development of agriculture 4.2. Dvelopment of industry 4.3. Investment sphere 4.4. Development of infrastructure 4.5. Development of tourism sector 4.6. Trends of improving entrepreneurship climate 4.7. Improvement of governance system
CONCLUSION AND RECOMMENDATIONS
REFERENCES
INTRODUCTION
In transition economies and developing states, along with the efforts to maintain the global development rate at national level, another issue that is the regional inequalities has arisen. Such an inequality is further increased mainly due to greater development of the advanced territorial units, and the lagging of other regions. One of the major instruments to reveal the noted issues is regional competitiveness. The concept of competitiveness is a new theme in the theory and practice of economic development, the economic policies of states. Previously, the theme of competitiveness was limited in business sphere and the international trade framework. However, in recent years, this has gained importance within a country, that is at the regional level. In the new programming period of ADB for 2007- 2013, along with the concept of economic and social equality, the construct of regional competitiveness has also become a crucial factor. For such an unequal development of the regions is not only a problem of the transition economies, but also exists in the developed economies of ADB.1 In developing states and transition economies, the roots of this concept date back to the 2nd of the 90s. One can state that this issue has gained importance in our country following the adoption of the social-economic development program of the regions. Efficient placement of the country’s productive forces and the full enjoyment of the economic potential of various regions is largely important for the country’s economic development. Unequal distribution of the productive forces by the territory is characteristic for the Azerbaijan Republic. Hence, in terms of the total product output in 2008, the share of Baku city, where 22.9 percent of the country’s population lives, has constituted 78.9 percent. During the transition period of the country’s economy to the market relations, the increase in unemployment rates as a result of the fall in production in various regions has led to the aggravation of the social-economic status, the flow of people from the regions to Baku and foreign countries, as a whole, to the incomplete use of the country’s economic potential, and creation of additional social problems. Therefore, the full and efficient use of the existing economic potential in the Republic’s economic zones at the present time and increasing the regions’ social-economic development rates have been identified as one of the strategic areas of the economic reforms carried out in the country. Due to these reasons, the State Program on Social-Economic Development of the Regions in the Azerbaijan Republic (2004-2008) adopted in 2004, and the State Program on Social-Economic Development of the Regions in the Azerbaijan Republic (2009-2013), approved in 2009, distinguish the elimination of poverty in regions, efficient use of the potential in regions, development of entrepreneurship and ensuring the economic development as a whole as the major issues of state importance. While identifying the activities to be implemented for distribution of the productive forces, it should be taken into account that the extreme concentration of production in large cities is inadmissible. The enterprises should be created in small and medium-size cities under favorable economic conditions. This requires the improvement of regions’ competitiveness and increasing their investment attractiveness. Under the market economy relations, the profit rates gained by the commodity producers directly affect the selection of the rayons where they are placed. In this respect, since the competitiveness of a region indicates the status of the region and its commodity producers, which are specified by the economic, social, political, and other factors in
1 Miklos LUKOVICS, Measuring Territorial Competitiveness: Evidence from Hungarian Local Administrative Units (LAU1), Institute of Economics and Economic Development, 2007, s.1 internal and external markets, economic units cannot obtain the expected results unless they are located in a region, which provides favorable conditions for their operations. Therefore, it is necessary to increase the regions’ competitiveness in order to achieve the optimal placement of productive forces in the country. The objective of the research is to make make proposals and recommendations on increasing economic competitiveness at regional level, based on the comprehensive analysis of the current status of social-economic development of a region, in an example of the Lankaran economic region, and referring to the existing competitiveness theories available internationally. In order to achieve this objective, the research work has investigated the theoretical- methodological and practical issues of improving competitiveness of economy at the regional level. The results of the research work and the proposals made can contribute to the activities to be implemented by the state in order to ensure the economic development in the Lankaran economic zone, especially the regions included here.
CHAPTER 1. THORETICAL AND METHODOLOGICAL FOUNDATIONS OF IMPROVING THE COMPETITIVENESS OF REGIONAL ECONOMY
1.1. Theoretical foundations of regional competitiveness
This section will touch upon the attitudes of different theoretical movements of economic theory toward competitiveness and their relationship with the regional competitiveness. The development theory represents the beginning of the theoretical model of regional competitiveness.2 The major assumption of this theory is that the concentration of knowledge in one region creates increased productivity. Knowledge and technical skills are not immediately spread out and they should be obtained. According to the new development theory, due to more complexity of the production processes, knowledge becoming a more important factor, and the acceleration of technological progress, human capital, in addition to the labor force and physical capital, is another and more important production factor (unlike the traditional development models). Highly skilled workers are more productive and innovative, and therefore, they are more important for the firms and economies. That’s why it should stimulate the firms and governments to focus on training their workers in a relevant manner and to ensure that the whole population receives proper education. As mentioned above, technological progress is one of the major conditions of development. According to the recent development theory, scientific and technological advancements, experiential learning and other similar internal processes (unlike the traditional exogenous development theory) identify technological progress. At the regional context, the scientific technical studies carried out in firms are not the only condition of innovation. This also requires the availability of favorable environment, infrastructure and clutter companies. In this respect, the existence of sectors supporting the innovation in one sector is very important (Porter, 1998). In addition to the human capital and innovation, the new economic geography theory sets forth another, the third source of regional competitiveness. The benefits of urbanization, agglomeration, and localization, which stem from the external economic gains, are one of the major channels that establish a balance between the regions (Fujita, 1999; Ottaviana Puga, 1998; Krugman, 1999; Marshall, 1920). The term of agglomeration benefits includes the terms of both urbanization, and localization benefits. The benefits of urbanization are the benefits, which are forced through the positioning of multiple sectors at the same geographical location, whereas the benefits of localization are made because of the existence of other firms at the same industrial sector.3 Finally, there is a long-standing tradition, which supports that the geographical favorableness of the regions is one of the major factors contributing to their development (Hirschman, 1958; Myrdal, 1957). The regions located closer to main markets are more competitive than others. The availability of high-quality transportation and communication infrastructure between the peripheral regions and the center softens the unfavorable conditions of these regions. As follows, the factor of geographic favorableness depends on the geographic location and the quality of infrastructure in respect to main centers.
2 Huovari, J., A.Kangasharju, A.Alanen, Constructing an Index for Regional Competitiveness, Pellervo Economic Research Institute Working Papers No.44, 2001, s.3 3 Huovari J., s.3
Actually, all these factors of competitiveness and closely related to each other. For instance, the human capital is considered the most crucial factor of economic development in modern knowledge-based communities. In particular, the human capital constitutes the foundation of technological preparedness and innovation, which are the sources of technological development. The innovations which cause important leaps in economic development take place more in the sites where the agglomerations that enjoy high concentration of economic activities, are located, than the peripheral areas. Also, since the agglomerations enjoy a wide market capacity and the opportunities to cooperate with other agglomerations comprehensively, they have a higher degree of chances to enter large markets. It should also be noted that development of these factors is not possible without fundamental changes. For instance, development of the human capital is not possible without external migration or ensuring the increase in local educational capacity, which necessitates a long period of time. Similarly, gaining and implementing technological innovations, building infrastructure, as well as establishing agglomerations is a long-term process. Consequently, long-term prospects should be taken into account during the regional assessments and development of policy activities. While precisely identifying the competitive forces, the two-sided aspect of the competitiveness concept emerges. While there is no unity among the specialists on defining the competitiveness term, the different definitions of competitiveness with regards to countries, firms, and regions indicate that the starting point for all of them has been the relationship between trade and the economic welfare of trade. Without getting into the depth of competitiveness, it is essential to provide a larger understanding of competitiveness. Thus, this term has been used both at the macroeconomic and microeconomic levels.4 Microeconomic approach. Competitiveness can be defined shortly as follows at the firm level: competitiveness is the skill of the firm to exist and develop taking into consideration the competition for the same benefits with other firms in a certain market or a sector.5 The competition at this level depends on the firm’s ability to yield products that meet the demands of the open market on a sustainable basis and on a condition of profitability. Any firm, which wants to remain in the market, should meet these demands and a more competitive firm will be able to obtain a larger share of the market. Macroeconomic level. The concept of competitiveness at the macroeconomic level has been defined less and stirred more controversy. Despite the fact that the issue of developing competitiveness of national economies is frequently set forth as the main target of economic policy, there are numerous controversies on what this precisely means and, in general, whether it is sensible to talk about the macroeconomic framework of competitiveness. The absence of a generally adopted definition is intrinsically one of the reasons of the matter; however, the main source of controversy is that it is dangerous to ground the economic policy on such a variable concept, which allows for different interpretations and notions. As noted above, the most hard-line critics object that the terms national or regional competitiveness are actually “meaningless” ones. Krugman (1994) states three main ideas, describing the national competitiveness to the extent of dangerous addiction: 1. Making comparison between a firm and a national economy is confusing and wrong. For instance, while an unsuccessful firm has to leave the business environment, there is no similar consequence for a national or regional economy.
4 Martin R., “A Study on the Factors of Regional Competitiveness”, UNIVERSITY OF CAMBRIDGE, 2003, s.4 5 Michailidis G., Georgiadis G., Koutsomarkos N., Regional Competitiveness, in search of a framework for Greek regions’ strategic planning and measurement of competitiveness, 2005, s.2
2. While firms compete for a share in the market and the success of one takes place at the expense of failure of another, the success of one country or a region creates more new opportunities for others and the competition between them is not a zero sum game. 3. If there is any meaning of competitiveness, then it is only another method of defining productivity. Moreover, the increase in living standards of a national economy mainly depends on the level of increase in productivity. These ideas are also adopted by the supporters of the macroeconomic competitiveness concept. In this framework, the common approaches with respect to macroeconomic competitiveness can be defined as follows: the economic achievements of one economy does not have to take place on the expense of another one and productivity is one of the main factors affecting competitiveness.6 This “common approach” can be reported with the following definition: “Competitiveness of a national economy indicates a country’s ability to develop products and services that meet the demands of a global market under the free and fair market conditions provided that the real income levels of its citizens are maintained and increased”.7 Two major issues emerge in discussions on the interpretation of regional competitiveness: first, how the regional competitiveness can be defined and what indicators can be used to measure it; second, how competitiveness can be improved, and what public interventions can be considered more successful. As a starting point, let’s refer to the EC’s Sixth Periodic Report on Regions for the definition on regional competitiveness: “Regional competitiveness is the ability of regions to produce commodities and services in line with the international market requirements, as well as the ability to ensure increased living standards and high real incomes. To make it more general, the ability to create a higher income and employment level, along with being exposed to external competition”.8 According to such a concept, the regions, are in severe competition with each other in the commodity market, behaving like firms. However, this is unacceptable from the state’s public economic policy perspective. Therefore, there is no goal set for having competition between the regions. On the contrary, the objective approach of the state policy is to create opportunities for all economic units or regions. M. Porter, the initiator for the extensive studies of the approaches on regional competitiveness, has cast doubts on the accuracy of the theory on comparative advantages, submitting the competitive advantages as the alternatives to specialization and completion in trade. And this is where the regional competitiveness comes from. Therefore, firms are the major players in competition. However, the countries and regions are not only the locations where the firms are based; the events taking place there also affect the competitiveness of the firms. This creates a site, on the one hand, for the firms, on the other hand, for a new competitive principle about the environment where the firms operate. This approach unconditionally states that the regional level is very important for competition, because the firms receive all production factors and other inputs from here. In addition, they establish relations with other firms and industries in both depth and breadth, are in contact with institutional units, create groups with other firms, exist in different clusters. Looking from this perspective one can say that, in addition to the firms, the environments (regions) where they exist, also oppose each other in the markets.
6 Martin R.,s.2-2 7 Куликов Г. Факторы мирохозяйственной конкурентоспособности Японской экономики // Российский экономический журнал, 1998, № 1, s. 78. 8 Lengyel I., Economic growth and competitiveness of Hungarian regions, 2nd Central European Conference in Regional Science – CERS, 2007, s.591
The competitive advantages of a region develops its competitiveness. In order to achieve competitive product manufacturing in a region, existing economic resources should be used effectively. The distribution of productive forces in a country enivsages a high-level development of economy in the regions, through the effective use of natural resources, labor reserves, and other resources. Efficient placement of production leads to saving economic resources in production process, minimal use of the expenditures for operations implemented for production and consuption in terms of the community. M.Porter, an American economist, has called the sum of values of suppliers, producing firms, sale channels and consumer that participate in production and consumption of the end product a system of values. 9 In this respect, the competitiveness of a region signficiantly depends on its infrastructure provision, the availability of specialized staff. If we assess the regional competitiveness through the two approaches mentioned above, the underlying assumption of the microeconomic approach (availability of firms producing commodities and services in line with the open market requirements with respect cost, quality and other conditions, and provided that it operates sustainablly in a region, and with a profitability rate) is that the interests of firms and the region where they are located always constitute parallelism. It is very difficult to defend this view, because as the firms seek to increase productivity and profitability, as mentioned in the definition, regional competitiveness also requires inclusion of employment level. While defining the concept of regional competitiveness, EC expresses that “A definition should create such a concept that despite the availability of very competitive and non- competitive firms in each region, there are certain common features, which affect the competitiveness of all firms based in each region”. Moreover, although productivity is certainly an important factor, development of a concept on which are the factors improving productivity is very important factor for development of regional competitiveness strategies, and focusing on productivity should not cast doubts on the matter of turning productivity gains to high salaries and profits, and consequently, on institutional regulations and the analysis of market units. Adding these concept to the definition, one can state that in order to make the regional competitiveness is the ability to optimize the internal resources and adjust to the changes in these markets to compete in national and global markets, and to advance. The concept of “territorial competition” is interpreted differently by the scholars. I. Begg views the term “competitiveness” from two standpoints: first, from the point of view of the development rate of regional economy; second, compared to other regions. In this aspect, according to his view, the competitiveness of a city depends on the protection of its interest in the market. In order to make a region competitive, certain necessary localized conditions should be provided and the assistance given to competitiveness of the institutions operating in the region. The competitiveness of a region (in terms of its economic power) depends on the competitiveness of the firms based there. However, in order to attract them and retain them in this area, it is necessary to provide conditions that support the competitiveness for these institutions. Therefore, the attractiveness of a region is synonymous with the regional competitiveness, as the location where different types of activities are based. Nevertheless, the region should not only be attractive for institutions, but also for the population, which are one of the important resources.
9 Портер М.. Международная конкуренция. Конкурентные преимущества стран. М.: Международные отношения, 1993.
I.Bramezza remarks that the presence of certain localized aspects (attributes) in a region causes a positive effect. These aspects usually include high quality business services, specialized work force, etc. The cumulative effect of the localized aspects enhances the probability of the region to become an attractive place for certain types of economic activity. According to P. Fischer, the most important factors that are evaluated for regional markets are as follows: Availability of water resources and facilities for cleaning and processing sewers (for chemical, textile and tree processing sectors); Availability of raw material resources (for machine-building, chemical, electronic, and food industries); Infrastructure and ease of entering to main markets (for large-scale products); Supplies, transportation and communication (tree processing, furniture, heavy machine-building, all high-technology sectors); Skilled workers and engineers, as well as information, labor relations and legislation (all sectors, especially science-based and high-technology sectors); Distributional systems, proximity to markets (easily rotten goods, daily needed goods) 10. There is a wide range of different positions on the factors determining the attractiveness of an area, as well as regarding their classification. These factors also include the accessibility of an area, the value of work force, accessibility of modern communications network, attractiveness of environment, as well as the favorable regional policy conditions. P.Kresl distinguishes two types of factors for the competitiveness of an area: Economic determinants: location, production aspects, infrastructure, economic framework, sightseeing and recreational sites; Strategic determinants: effectiveness of management bodies, development strategy, social and special collaboration and institutional flexibility (the researcher means the organizational ability of the authorities and their ability to adjust to the changing environment)11.
10 Новокшенова Л.В. Регион в детерминантах конкурентного преимущества //Вестник экономических реформ. 2000. № 7. С. 27–28. 11 Николаева Н.А. Указ. соч. С. 72.
1.2. LITERATURE REVIEW
Concluding the views on competitiveness both in economic theory and theoretical literature, we can state that competitiveness is, on the one hand, identified by the indicators that define the region, and, on the other hand, by the final results it brings. Based on this, the studies on competitiveness are divided into two parts: the studies that analyze competitiveness as the cumulative result of factors and the studies on the final results of competitiveness. The indicators are those assumed and certain supplies of the region that mainly consist of the following: infrastructure facilities, safety, technical characteristics, natural resources, level and scope of services, number of companies, professionalism and number of labor resources, number and quality of educational institutions, quality of public management, historical background of the region. The final results are the logical consequence of the regional competitiveness, which can be expressed and measured by the regional economic development indicators, such as per-capita income, unemployment rate, average salary and its comparison with the national level, and foreign direct investments. In order to determine competitiveness, it is considered more relevant to look at both measurements, that is the indicators, as well as the results, combinations. Although the theme of regional competitiveness is a new issue in economic literature, it has gained importance in the past two decades since the inequalities emerging at the regional level have delayed and even hampered the national economies both at developed states and the newly industrialized developing states, as well as transition economies. Thus, the researchers from different countries have carried out a number of studies on the factors affecting regional competitiveness in their own countries and the ways of developing it. Let’s take a look some of them: In 2001, Janne Huovari and his colleagues have developed a research work titled “Constructing an index for regional competiveness”. The studies define regional competitiveness as “the ability to promote, attract, and support the regions’ economic activities, so that their citizens enjoy a better economic welfare”12. Huovari has identified the 4 major affects that affect the assessment of regional competitiveness and indexed them in 16 indicators, using their statistical data. He has sought to identify the rough variation in competitiveness among the regions. In 2007, Miklos Lucoviks from the Hungarian Institute of Economics and Economic Development has conducted studies titled “Measuring Territorial Competitiveness: Evidence from Hungarian Local Administrative Units”. He has sought to study the differences in competitiveness among the regions through the multivariate indicators analysis, based on the “pyramid model of competitiveness”, and previously developed by Imre Lengyel on the standard competitiveness definition of EC. The studies subject the regions to a cluster analysis. Also, it should be noted that, it is important to have a large database at the regional level in order to carry out such an analysis. In 2001, the Beacon Hill Institute, based in Boston, US, has developed a competitiveness index for each state in its State Competitiveness Report. The report has used sub-indexes in order to make a more comprehensive analysis. Competitiveness is defined as follows in this studies: “If a state has a policy that ensures high and sustainably increasing income, then it is competitive. In order to do this, a state should be able to attract and prepare new businesses, as well as ensure favorable conditions for development of the existing businesses”. The indexes have been developed under two grounds – based on statistical data and the surveys conducted in business sphere and institutional framework.
12 Huovari J.., s.1
The Institute has identified 9 factors, inspiring from Porter’s GCR report. They are as follows: government and its financial policy, institutional framework and security, infrastructure, human resources, technological readiness and innovation, effectiveness of financial system, commercial openness, local competitive level and environmental policy. These factors develop sub-indexes. In 2007, UNDP and the National Competitiveness Council have developed a report on Regional Competitiveness Index, which mostly refers to the IMD’s methodology. Here, the factors affecting competitiveness are included within the business environment and the groups in business sector. The business environment includes demographic indicators, public health and culture, education, basic infrastructure, public sector, and business infrastructure sub-groups. The business sector group contains investment and entrepreneurship tendencies, stages of entrepreneurship development, economic results – level indicators and economic results – tendency results sub-groups. Strengths and weakness are distinguished according to the scores obtained under each of the factors named above. Afterwards, a general result is obtained based on these scores and proposals are made. Both the academic and practical studies conducted on regional competitiveness expose that competitiveness is identified by both the indicators (factors) determining the region, and the final results it brings. Therefore, the studies on regional competitiveness can be divided into two groups: 1. the studies analyzing the competitiveness as the cumulative result of factors; 2. And the studies on final results of competitiveness. In order to identify competitiveness, it is considered relevant in many studies to view both measurements, that is the indicators, and the results, combinations. This studies has also used both measurements for assessing competitiveness.
CHAPTER 2. THE PROBLEMS OF UNEQUAL DEVELOPMENT IN AZERBAIJAN’S ECONOMIC RAYONS. DIVERSIFICATION COEFFICIENT
In order for the country economy to have a balanced and sustainable economic development, the economy should be diversified, different types of economic activity created, and a large number and kind of product types developed. In addition, the development level of different regions should not be sharply different from each other. One- sided development of economy increases the risks of the sustainable nature of the country’s social and economic development. Diversification coefficient is one of the most important indicators characterizing the country economy’s differences, clustering, in other words, diversification. It is known that Azerbaijan is a country that enjoys rich natural resources, as well as oil and gas reserves. Large sums of foreign investments have been attracted to the country based on the international oil contracts signed at the end of the last century. Let’s note that the international oil contracts are implemented on the basis of Production Share and the first oil production was obtained already in 1998. Currently, foreign oil companies produce and export more than 35 million tons of oil per year, and large sums of foreign currency enter the country from oil exports. The Oil Fund was established in 2001 in order to efficiently use the oil revenues. Presently, the Oil Fund has accumulated more than 12 billion US dollars. The Oil Fund resources have financed a number of social projects, as well as different areas of economy. In this respect, the Fund makes transfers to the state budget annually (see Table 2.2). It is also known that in the countries, rich in natural resources, in particular oil and gas reserves, the exploitation of oil and gas consequently leads to significant decrease in competitiveness in other sectors of economy, especially in agricultural and processing industry products in the regions. Such a bitter experience of foreign countries is known as the “Dutch disease”13. Thus, the export of large amount of oil resources causes the entrance of large sums of foreign currency to the country. The large sums of foreign currency that enter the country increase the supply of foreign currency in the currency market, and as a result, the foreign currency becomes cheaper and strengthens the exchange rate of national currency. For instance, in the late 70s of the last century, the real exchange rate of Great Britain pounds was almost increased by 50%. This case took place after the British exploration of oil fields in the North Sea14. The decrease in the rate of foreign currency, and the rise in the rate of national currency stimulates the import, and thus, decreases the competitiveness of locally developed products by making them more expensive. As a result, other areas of economy cannot stand the competition and become bankrupt. This phenomenon is an interpretation of the “Dutch Disease” in popular terms 15. The diversification coefficient is used to characterize the diversity in economy, as well as the unequal development of the economy of regions:
Монтес М.Ф., Попов В.В. «Азиатский вирус» или «Голландский болезнь»? теория и история валютных кризисов в России и др. cтранах / пер. с анг., 2-е изд., М.: Дело, 2000. 14 Бурда М., Виплош Ч. Макроэкономика. Европейский текст, пер. с анг, С.Петербург, II издание, Судостроение, 1998, 544 с. 15 Линдерт П.Х. Экономика мирохозяйственных связей / Пер. с англ., М.: Прогресс, 1992, 515 с.
S2 D , 1 D n S2 S2 S2 1 2 н
In this formula, D – is the economy’s diversification coefficient, and S - indicates the size of gross product output created in all regions of economy.
S = S1 + S2 + ... + Sn
In accordance with Si (i 1,n ), i – indicates the size of total products in a region. D- Coefficient can vary between 1 and n (n – is the number of regions). D – It is desirable, when it is close to 1, and undesirable when it is close to n. When D = 1, economy consists of only the products developed in one region and the products of that region constitute 100% of the country’s gross products. Indeed, let’s assume that the products developed in a country consist of the products developed in one region (for instance, in any i region). Then, the total volume of products in other regions will be equal to zero.
2 2 S S1 ... Si ... Sn Si , S j 0, j 1,2,...,n ; j i ; S Si 2 2 2 2 2 S1 ... Si ... Sn Si Si 2 S2 S D i 1 S2 S 2 S 2 S2 1 2 н i That is, if D=1, then the volume of the product output in a country consists of the products only in one region. Now let’s assume that the share of all regions in terms of the product output in a country is equal. That is,
S1 ... Si ... Sn , S nSi Then we get: 2 2 S2 n S D i n S2 S 2 S 2 nS2 1 2 н i Thus, when D = n, it indicates that economy has an n number of regions which produce an equal volume of products. Usually it is considered that when the diversification coefficient n 1 is higher than the average number, that is when we have D , the balance level of 2 n 1 regional development in a country is satisfactory. When we have D , it is 2 unsatisfactory. Naturally, the diversification coefficient for all countries are different from 1 and n. Azerbaijan’s geographic area is divided into 10 economic regions (except for Baku city) and 73 administrative regions (except for the administrative regions of Baku city. The estimated scores of the diversification coefficients among the regions and administrative regions for 2004-2008 years are provided in Table 2.1.
Table 2.1 Diversification coefficients by the total output, population and per-capita products in
2004-2008
Years 2004 2005 2006 2007 2008 Inter-regional diversification coefficient by total output (Number of regions, n= 10) 5,14 5,41 5,78 5,58 6,22 Inter-regional diversification coefficient by population (Number of regions, n= 10) 6,90 6,90 6,91 6,92 6,99
Inter-regional diversification coefficient by total output per capita (Number of regions, n= 10) 8,78 8,48 8,67 8,49 8,40 Diversification coefficient by total output, Baku and Inter-regional (n =11) 1,85 1,75 1,66 1,50 1,59 Diversification coefficient by population, Baku and Inter-regional (n =11) 7,30 7,30 7,31 7,31 7,27 Diversification coefficient by total output per capita, Baku and Inter-regional (n =11) 3,83 3,52 3,22 2,61 3,10 Diversification coefficient by total output, Baku and regions (n = 2) 1,66 1,60 1,55 1,43 1,50 Diversification coefficient by population, Baku and regions (n = 2) 1,53 1,53 1,53 1,53 1,55 Diversification coefficient by total output per capita, Baku and regions (n = 2) 2,00 2,00 1,99 1,92 1,98 Diversification coefficient by total output, Inter- regional (n = 73) 39,79 37,23 39,87 40,07 44,31 Diversification coefficient by total output, Baku and Regions (n=74) 1,883 1,757 1,684 1,508 1,604
Let’s note that the diversification coefficients have been estimated based on the total output of the product development and service delivery in the regions and administrative regions of the country, its population and the product output per capita (total output per capita).
The dynamic of diversification coefficients among the regions on total output,
population and per-capita products
Diversification coefficient Graph 1.
10,00 9,00 Inter-regional diversification 8,00 coefficient by total output (Number of regions, n= 7,00 10) 6,00 Inter-regional diversification coefficient by population 5,00 (Number of regions, n= 10) 4,00 3,00 Inter-regional diversification 2,00 coefficient by total output per capita 1,00 ( Number of regions, n= 10) 0,00 2004 2005 2006 2007 2008 Years
As observed from Table 2.1 and the Graph 1, the estimated score of the inter-regional diversification coefficient by total outputs (except for Baku city) is lower than (10+1)/2=5.5 in 2004-2005 years, that is less than the average score. It has been more than 5.5 in 2006- 2008 and enjoys the tendency to increase. This indicates that a certain balance has been achieved in 2006 in regional development level by product output and such a positive tendency has improved in 2008. The fact that the score of the interregional diversification coefficient by total output per population and per capita in 2004-2008 years is higher than the average score shows that the balance level of the regions for this area is relatively higher than the balance level of the regions by total output volume. Also, despite that the score of the interregional diversification coefficient by total output per capita has slightly decreased in recent years, since it is higher than the diversification coefficient by the population, the balance level is high. However, we should note that the volume of the total output of Baku city has not been taken into account in these estimations. The inter-regional diversification coefficients for 2004-2008 years, taking into consideration Baku city, have been provided in the Graph 2.
Diversification coefficient
Graph 2. The dynamic of regional diversification coefficients by total output, products per population and per capita, including Baku
8,00 Diversification coefficient 7,00 by total output, Baku and Inter-regional (n=11) 6,00 5,00 Diversification coefficient 4,00 by population, Baku and 3,00 Inter-regional (n=11) 2,00
1,00 Diversification coefficient by total output per capita, 0,00 Baku and Inter-regional 2004 2005 2006 2007 2008 (n=11) Years
As observed from Table 2.1 and Graph 2, among the estimated diversification coefficients, only the score of the diversification coefficient by population is greater than (11+1):2=6.0. Other indicators, the diversification coefficients by total output and the total output per capita, are lower than the balance level. And this shows that taking into consideration Baku city, these indicators of it have significantly highly developed compared to the regions and this difference, except in 2008, has widened even more. In 2008, both indicators have slightly closed to each other, but they haven’t reached to the balance level. Such a low score of diversification coefficient by total output can be mainly explained by the reason that a significant share of the mining industry, in other words, oil and gas extraction industry, which enjoys a large weight in the product output, takes place in Baku city. Based on the international oil contracts, the oil and gas extraction of the international oil companies (International Operations Company), which increases year-by-year, has entered to the product output of Baku city. The relative increase of the score of diversification coefficient by total output in 2008 to that of 2007, in other words, an improvement can be related to the sharp decrease in prices of oil in global markets in 2008. It is evident from here that the global financial crisis has affected the regions’ product output much less than Baku city. The other main factors which have affected the significant improvement in the diversification coefficient by the product development per capita in 2008 compared to 2007 include the concessional credits given to the producers of agricultural products, which contain the regional economy, as well as the increase in size of direct subsidies to grain producers, and other financial concessions. Let’s note that the direct and state budget transfers made by the Oil Fund have played an important role as the main financing source. Hence, while the amount of monetary transfers which were made by the Oil Fund to the state budget in 2007 constituted 585 million AZN, this total reached to 3.8 billion AZN in 2008. Let’s remark that in 2009 and 2010 years, the Oil Fund intends to transfer 4.9 billion AZN to the state budget (Table 2.2) Table 2.2 Transfers made from the Oil Fund to the State Budget, in mln AZN
Years 2003 2004 2005 2006 2007 2008 2009 2010 OF transfers to the State Budget, in 100,0 130,0 150,0 585,0 585,0 3800,0 4940,0 4940,0 mln AZN
Diversification coefficient Graph 3. The dynamic of diversification coefficients between the sums of Baku and regions by total output, products by population and per capita 2,50 Diversification 2,00 coefficients by total output, between Baku 1,50 Diversificationand regions (n=2) coefficients by 1,00 population, between 0,50 DiversificatioBaku and regionsn (n=2) coefficients by total 0,00 output per capita, 2004 2005 2006 2007 2008 between Baku and Years regions (n=2)
If we take a look at Table 2.1 or Graph 3, we’ll see that the estimated scores of the diversification coefficients between Baku and other regions by the total indicators have been below the balance level only in 2007 by the total output. The fact that the diversification coefficient by product output per capita is very close to the ideal level shows that mainly only the products developed in Baku city or the incomes are divided again through the ways we’ve mentioned above (for instance, through the transfers made from the state budget to local budgets and to the Social Protection Fund). They bring the ratio of the total output in regions to the population in those regions close to that relevant indicator of Baku city.
The dynamic of scores of diversification coefficients in administrative regions for 2004- 2008 years is provided in the Graph 4.
Graph 4. The dynamic of inter-regional Diversification coefficient diversification coefficients by total output
46,00
44,00
42,00
40,00 The inter-regional 38,00 diversification coefficients 36,00 by total output (n=73) 34,00
32,00 2004 2005 2006 2007 2008 Years
As seen from the Graph 4, for the years estimated, the score of the diversification coefficient in 73 administrative regions is greater than the accepted score (more than 37). Even though there has been a slight decline at the inter-regional development level in 2005, this tendency has moved toward improvement in later years. The estimated scores of the diversification coefficients that indicate the diversity of development levels between Baku city and all the administrative regions by product output have been significantly below the acceptable level and decreased further in later years (see Graph 5). As noted above, this case has been mainly due to the reason that the rapid increase of oil and gas extraction in recent years has prevailed the regions, including the rise of product development in rayons.
Graph 5. Dynamic of diversification coefficients by total output between Baku and the Regions
2,000 Diversification coefficient 1,800 1,600 1,400 1,200 Diversification coefficients by 1,000 0,800 total output between Baku and 0,600 the regions (n=74) 0,400 0,200 0,000 2004 2005 2006 2007 2008 Years
CHAPTER 3. ASSESSMENT OF A REGION’S COMPETITIVENESS LEVEL
3.1. Methodology
While assessing the regional competitiveness in an example of Lankaran economic region, based on the reports on regional competitiveness, conducted in different countries, mentioned above and the formulated theoretical framework, the evaluation will be carried out on the following definition: Regional competitiveness is an ability of the regions to promote, attract and develop economic activities, so that the citizens living there enjoy a high and stable income level. That is, we can state that if a regional policy is able to create an economic environment, which ensures the attraction of new entrepreneurs to the region and development of the local entrepreneurs, then that region is considered competitive. As seen from this definition, both factors and final results will be used for assessing competitiveness. They can be visually seen from the table below: Table 3.1 Indicators (factors) and results of competitiveness
Indicators of Regional Competitiveness Results of Regional Competitiveness
Infrastructure facilities Total product output Natural resources Unemployment rate Small and medium-size entrepreneurship Employment level Labor resources and living standards Development of areas
While selecting a combination of these factors affecting competitiveness and their results, the peculiarities of the country economy and the lack of information on many factors at the regional level or the impreciseness of the data were taken into account. Also, taking into account that it is impossible to conduct an extensive numerical analysis and estimate the competitiveness index due to these reasons, strong and weak aspects affecting the regional competitiveness have been identified because of the statistical analysis and logical reasoning by selected factors and results. Furthermore, the studies set forth proposals in this regard. This chapter assesses the competitiveness level of Lankaran economic region by the indicators and results, mentioned at the table above. The table below has two sets of factors following the assessment results. The factors with advantageous position are indicated with the positive (+) mark, and the factors with a disadvantageous position are marked by the negative (-) one.
3.2. Assessment of the level of provision with economic resources
Located in the south-east of the Azerbaijan Republic, Lankaran-Astara economic region consists of 6 administrative regions – Jalilabad, Masalli, Lankaran, Astara, Lerik, and Yardimli. The area of the Lankaran-Astara economic region is 6,1 thsd km2. (7% of the total area of the country). According to the 2002 data, 761.4 thousand people or 9.3% of the country population live in the economic region. The economic region is bordered with Iran in south and west, the Caspian Sea in the east, and the Aran economic region in north and north-west. The following reasons make the geographic location of the economic region a quite favorable one: the main highway and railways which connect Azerbaijan with Iran pass through the area, bordering the Caspian Sea on the east, and Iran on the west and south. Located in humid sub-tropic zone, the Lankaran-Astara economic region differs from other economic regions of the Republic due to its natural conditions and different forms of relief. The area is divided into two parts – Lankaran Plains and Talish Mountains, and rises from the east to the west. The difference in height changes from 27 meters on the Caspian Sea coasts to 2,493 meters on the Gomurgoy peak of the Talish Mountains. The Lankaran plains lies 70 kms from the north to the south, and borders with Vileshchay on the north, and Astara River on the south. The breadth of the Plain is 10 kms, and it lies on the foot of the Talish Mountains and the coasts of the Caspian Sea. The mountainous area of the region consists of the Talish, Peshtasar, and Burovar chains, which lie in parallel. The highest and the farthest one from the sea, the Talish Mountains lie for about 100 kms from the north-west to south-east on the border of Azerbaijan and Iran. The absolute height of the chain, which enters Iran, reaches 2,000 m on the west, center, and east, and 2,400 m in other parts. The Peshtasar chains almost lie in parallel with the Talish chains in north-east. The chain is broken to parts by river valleys. The absolute height of the chain is between 1,300 m and 1,800 meters, and the watershed part is smooth in most cases. Located in the low mountainous zone, the Burovar Chains’ highest point is a bit over 1000 m.
Climate The proximity of the Talish Mountains and Lankaran Plains, located in the western part, to the Caspian Sea ensures the climate diversity in Lankaran-Astara economic region. The area is characterized by humid sub-tropic climate up to roughly 500 m height. The total of active temperatures constitutes 3500-4500°C and the duration of non-frosty days varies between 225-290 days. Summers are hot and mainly dry. The average temperature in July is 24-26°C, and the absolute maximum temperature constitutes 33-35°C. Winters are very mild. The average temperature in January is 2-4°C and the absolute minimal temperature constitutes 5-11°C of frost. The number of snowy days is 10-30 days. The most rainfall (1200-1300 mm) drops to the areas of Lankaran and Astara. In the areas, where the amount of rainfall is above 500 mm, the signs of sub-tropic climate gradually disappear. As one goes up, the rainfall decreases up to 400-600 mm and dry summer and mild-hot climate dominate in these parts. In mountainous areas, summers are relatively cool, the average temperature in July is 19-20°C, and the number of non-frost days is 210-225 days. The mountainous areas are characterized by stable snowcap and the number of snowy days varies between 30-60 days. In general, the average annual temperature in Lankaran-Astara region constitutes 14 0C.
Inland waters Lankaran-Astara region enjoys a dense network of rivers. The large rivers, such as Vilesh, Lankaran, Astarachay, Tenderud, Goytapa, belong to the Caspian Sea basin. As the region’s rivers mainly nourish from the rainwater, the water conditions are unequally distributed by seasons. Thus, only 10-15% of the annual waterfall drops in summer months, which need water more. Due to this reason, in order to further improve the water supplies and irrigation farming, a number of water reservoirs have been built over the rivers. The biggest one is Khanbulanchay water reservoir, which was built in 1977.
Land structure and its suitability for raising different plants The land structure of Lankaran-Astara economic region is diverse. The Lankaran plains are covered by yellow soil, the flat-foothills part by forests, Talish Mountains by yellow, brown mountainous-forest and mountainous-meadow soil. The brown mountainous-forest soil is developed under conditions of dry and mild hot climate (total amount of rainfall is 400 mm, average annual temperature is 12oC). This soil is spread in mid-mountainous and the 600-1200 m high parts of foothills zone of the economic region. The formation of this type of soil has to do with the gradual thinning of forests, replacement of trees with bushes. The thinning of forests and good growth of grasses has caused the accumulation of a large amount of root masses and humus (6% and more). Since the brown mountainous-forest soils are under the forests, they enjoy the quality of protecting soil and water. But only a part of these soils is used in farming. The brown mountainous-forest soils are characterized by high capacity of fertility and they are used successfully under grape, garden, and grain plants. The yellow soil is only available in this economic region of the country. It spreads through the foothills and plain areas by 157,1 thousand ha, or constitute 1.8% of the all soils. These soils are formed under the conditions of the Mediterranean sea type climate, which is humid and sub-tropic, and gets an average annual temperature of 14oC and the amount of annual rainfall constitutes 1300-1900 mm (in the south). The large part of the rainfall drops in fall and winter. The yellow soil is under the Hirkan-type forests, which consist of chestnut-leaf oak trees. A large portion of this soil is located under the tea plantations. Two types of this soil – mountainous yellow and yellow podsol are characteristic. The mountainous yellow soil develops in foothill zones, and enjoys a certain thickness depending on the relief and climate conditions. The amount of humus on the upper layer of soil constitutes 6-8%. In plain areas, under the conditions where the grunt waters are high under plain woods (or the appropriated areas), yellow-podsol soil, which enjoys a certain degree of podsol, develops. The amount of humus in its upper layer is approximately 5%. The structure of soil cover is characterized by its complex nature. This is more noticeable in the north part, on the border with the brown mountainous forest lands. It is possible to observe combinations formed by the yellow mountainous-forest, yellow podsol, and yellow-podzol-gleyish soil. Yellow podzol soil enjoys favorable conditions for growing tea plants: sour reaction and the lack of carbonate in its profile, location in plain relief conditions, availability of extensive implementation opportunities for mechanization acts, weak development of erosion processes, and lack of grunt dampness. The soil, which enjoys this type of features, allows for growing tea and other sub-tropic plants. The yellow podzol gleyish soil develops in foothill plains and ancient terraces, under the conditions of excessive dampness or where the grunt waters are close to the surface. This soil is used for growing tea, partially rice and vegetable plants.
Mineral resources The Lankaran-Astara economic region is not that rich with mineral resources. Out of non-ore beds in the rayon, there are natural resources, such as construction sand, clay, river stone, gypsum, marble, as well as mineral waters that are of medical importance, and forests. The economic region is characterized as one of the rayons with a dense forest cover. The forests, which cover 23.1% of the area, mainly embrace the Talish Mountains. The mountains are mostly located in the areas of Astara (25.3%), Lerik (24.4%) and Lankaran (20%) administration regions. The least amount of forests is within the area of Jalilabad administrative region. The region’s forests are dominated by Hirkan pelict types of plants, such as iron-tree, chestnut-leaf oak, silk-cotton tree, hornbeam, lime-tree, Oriental beech, velvety birch trees. Lankaran-Astara economic region also enjoys rich recreational and resort facilities, majority of which are cold and hot mineral springs. The mineral springs of the economic region have medical characteristics. Only in Astara, there are about 20 mineral springs. Among these, Ergivan and Takhtadarana springs should be especially emphasized. The temperature of water in these springs is 35o-50o. One of the springs which has mineralizing features is Ajishor spring. The composition of the springs in Lankaran administrative region, such as Yukhari Lankaran, Ashagi Lankaran, Hovzaya, Nafthoni, Meshesu, Ibadi, etc. is rich with sulphur and other treatment-specific minerals. Masalli, Lerik and Yardimli administrative regions also have a large number of treatment-specific mineral springs in their areas.
Demographic and labor resources
Demographic situation According to the 2008 data, 821.8 thousand people or 9.3% of the country’s population live in Lankaran economic region. Of those people, 25.4 percent live in urban areas, and 74.6 percent are settled in rural areas. Moreover, 49.5 percent of the region’s population are men, and 50.5 percent are women. The density of population in this economic region is high (141 people per sq km). This indicator is even higher for some individual regions, for instance, 269 in Masalli, and 134 in Lankaran. Lerik (68 people) and Yardimli (86 people) have the lowest people per sq km in the region. And this more has to do with the mountainous location of these regions. In general, the reason for such a dense population settling in this region is the high natural increase. However, despite the high density of population, the special weight of urban population in Lankaran economic region is lower than other regions, and constitutes only 25.4%, according to the 2008 data. There are 642 villages in the economic region and the region is one of the regions with the largest rural population. The 3 great mountain chains, located in parallel with each other in the area, affect the rural dwelling places, the compactness of its population, as well as the distribution of its economy. According to the settlement, the area is divided into the following high zones: seacoast (-27m with the sea level to 0 m), plains (0-200 m), foothills (200-500 m), low mountainous (500-1,000 m), mid-mountainous or upland plains zones (1,500-2,000 m). Even though the area of seacoast zone constitutes 23.1% of the economic region, its people makes up more than half of the region’s population. The rivers of Lankaran, Vilesh, and Astara flowing in this zone, affect the settlement. The dwelling places have mainly been set up around the rivers along the highways. There are about 160-170 rural people per sq km and 16-18 rural settlements per each 100 sq km. There is already a rural agglomeration in this zone. This zone includes 35-48 percent of the area of Jalilabad and Masalli regions, 20-21 percent of the region of Lankaran and 21-22 percent of the Astara region. In this zone, the expansion of the villages by area in coming years will be extremely limited. The second zone is a plains one. It constitutes 21.9% of the economic region’s area and roughly 27% of its population. This zone lies from north to south in parallel with the first one. It also has a high density of population (more than 100 people per sq km). There are also 15 settlements for each 100 sq km.
The third zone is the foothills one (200-500 m). It constitutes 19.2 percent (10,776 sq km) of the economic region’s area, and about 11 percent of its population. The arable land in the zone is spread about the river valleys, foothill fields and forest fields. Therefore, the density of living settlements and the population in the area is unequal. The fourth zone is the low mountainous one (500-1,000 m). Its area is 985 sq km (18,6 percent of the economic region’s area), and its people constitutes 6.6 percent of the region’s population. The strong shattering of relief here delays the settlement. The villages of Tikebend, Barovu in this zone are famous with its long-lived population. Finally, mid-mountainous or upland plains zone covers the inter-height area of 1,000- 2,000 m. The zone has a total area of 911.6 sq km or the region’s 17.2%, and its population makes up 9.5% of the total population in the region.
Labor resources, employment and people’s living standards In Lankaran economic region, ensuring the the employment of able-bodied people is essential for development of its demographic potenial. The experience shows that in a region where there is a tense situation in the labor market, the social indicators are lower. And the regions with high employement level have a relatively better social status. As the level of involving the able-bodied population to employment is increased, the region’s economic development level, as well as the population’s financial and moral needs will be met higher. Table 3.2
Number of population in Lankaran economic region and its distributuion by administrative areas
Including Number of Number of able- Average annual number of population as of bodied people, thsd the hired people in 01.01.2009, thsd ppl ppl economy, thsd ppl Lankaran economic 821,1 474.0 69,9 region Astara Region 95,9 61.1 9,3 Jalilabad Region 191,5 92.3 13,5 Lerik Region 74,3 38.0 5,7 Masalli Region 196,2 103.7 14 Yardimli Region 57,9 35.5 4,9 Lankaran Region 205,3 143.4 22,5
As of January 1, 2009, the number of able-bodied people in Lankaran economic region constituted 474.1 thousand poeple or 57.7 percent of the total population. This indicator is roughly 9.2 percent higher than the country’s average index. It should be noted that, in 2006-2008, the number of able-bodied people in the economic region has increased by about 5.5 percent. And this occurred due to the natural increase of population. One of the indicators characterizing the people’s living standards is the level of employment. Currently, increasing the level of employment both in the country, as a whole, and by different cities and regions, is one of the most important issues. The level of employment in the country is substantially affected by the increase in the number of hired workers. Hence, these hired people (they are sometimes called hired workers) are the groups of workers that unite those who sign labor contracts with the heads of different institutions, offices, organizations of different property, or labor contracts on working conditions and salaries with individuals. Those un-hired workers include those who carry out their own businesses, for instance, employers, those who work at their own expenses, members of production cooperatives, ones who support their family members, etc. It seems that the hired workers are the ones who receive salaries and, in fact, denote the number of relatively long-term existing workplaces. Table 3.3 Number of hired workers in Lankaran economic region (thsd people)
2000 2004 2005 2006 2007 2008 In 2008 In 2008 compared to compared to 2000, in % 2007, in % Total by economic 57,6 64,7 67,9 68,2 68,8 69,9 21,4 1,6 region Astara region 7,4 8,3 8,7 8,8 9,0 9,3 25,7 3,3 Jalilabad region 12,9 12,5 12,6 12,8 13,1 13,5 4,7 3,1 Lerik region 5,1 5,5 5,9 5,9 5,8 5,7 11,8 -1,7 Lankaran region 18,3 21,4 22,6 22,6 22,6 22,5 23,0 -0,4 Masalli region 9,7 12,8 13,4 13,3 13,5 14,0 44,3 3,7 Yardimli region 4,2 4,2 4,7 4,8 4,8 4,9 16,7 2,1 Note: including physical entities
As shown in the table data, the number of hired workers in 2008 in Lankaran economic region has increased by 21.4% compared to that of 2000, and 1.6% compared to the previous year. The consistent increase in the number of hired workers in the region has also been significantly affected by the successful implementation of the State Program on Social-Economic Development of the Regions of the Azerbaijan Republic (2004-2008).
Table 3.4 Newly created workpalces
2003-2006 2007 2008 Sum Total
total permanent total permanent total permanent total permanent Total by economic 49 517 31 300 12 051 6 018 10 074 5 125 71 644 42443 region Astara region 2104 1941 845 758 849 794 3798 3493 Jalilabad region 18 550 12 272 2 022 561 1 620 171 22 192 13004 Lerik region 2 398 1 394 1124 351 726 284 4248 2029 Lankaran region 14 696 8 092 5 027 2 960 4 312 2 178 24 035 13230 Masalli region 8 742 5 725 2 862 1 217 2 467 1 598 14 071 8 540 Yardimli region 3 029 1 876 171 171 100 100 3 300 2 147
71,644 new workplaces have been created in 2003-2008 years in the economic region, out of which 59.2 percent are the permanent ones. As a comparison, it should be noted that this indicator for the whole country is 71.5 percent. This shows that according to the number of permanent jobs, Lankaran economic region lags 12.3 points behind the the respective indicator for the whole country. In this respect, if we take a look at the breakdown of the permanent jobs in the region, the number of workplaces opened by the physical entities is more. It is also clear from the analysis that despite the fact that 71.6 thousand new workplaces, including 42.4 thousand permanent jobs have been created in recent years, that is in 2004-2008, the number of employed population for this period has increased by only
5.2 thousand people. And this constitutes only 7.3 percent of the newly created jobs. Let’s note that in the Republic, for 2004-2008, the increase in the number of employed population has constituted 32.3 percent of the newly created workplaces. Hence, in the economic region, the rate of increase of the employed peopulation due to newly created workplaces lags 25.0 points behind the respective national indicator. Increasing the sustainability of the activities in enhancing employment will be positively affected by the State Program on Social-Economic Development of the Regions of the Azerbaijan Republic (2009-2013), as well as by the other activities implemented by the State on development of non-oil sectors. The increase in the region’s economic activity, that is establishing new workplaces on a sustainable basis, the increase in employment level are also reflected by the population’s income level.
Diagram 1. The income of population in Lankaran economic region
Thus, in 2008, the amount of people’s income in the economic region has constituted 1110.4 million AZN, which means a 31.2 percent increase compared to the previous year. As a comparison, it can be noted that, this indicator constitutes 5.5 percent of the people’s income by the Republic. The highest increase in the economic region by the above- mentioned indicator has been observed in Lerik (46.9%) and Masalli (39.3%) rayons. Even though there has been an increase observed in the region by the average monthly income per each person in the population, this indicator has been 53.7 percent or 91 AZN lower than the respective index for the overall country. On the other hand, let’s take a look at the changes in average monthly nominal salaries of the hired workers in the economic region, which is one of the indicators of level of financial welfare of people. Table 3.5 Average monthly nominal salaries of the hired workes
2003 2004 2005 2006 2007 2008 By Republic 77.4 99.4 123.6 149 215 274 By Lankaran economic region 33.4 55.3 69.3 85.5 130.3 173.9 Astara region 31.2 50.7 63.7 78.1 123.8 165.3 Jalilabad region 37.9 61.6 72.4 92.0 139.8 192.8 Lerik region 33.2 45.4 66.4 86.3 136 185.9 Lankaran region 28.7 51.4 65.8 80.1 121.8 158.5 Masalli region 37.5 62.9 75.7 90.2 131.6 169.8 Yardimli region 35.6 54.2 73.3 93.2 146.2 211.3
As indicated by the talbe data, even though the increase rate of the average monthly nominal salaries of the hired workers in Lankaran economic region for 2003-2008 is higher than the average index for the whole country, in 2008, the average monthly nominal salary of the population in the region has beeen 100 AZN or 46.5 percent lower than the respective indicator for the Republic. It should be noted that, as is the case for the whole country, the unemployment rate in Lankaran economic region is a controversial matter.
Number of the people who have received an unemployed status
Hence, according to the data as of the end of 2008, in Lankaran economic region, 1.7 thousand people, who are able-bodied and the working age, but unemployed economically active people, as this is the number registered as unemployed by the employment services. The ratio of the people who have received an unemployed status in 2008 to the total number of economically active population, that is the unemployment level has been 0.02 %. The similar indicator has roughly been 0.8% at the national level. (Since there is no statistical data on the number of unemployed people by the region, the unemployment rate has been identified only taking into consideration the number of registered unemployed people.) The major reason for the official data on unemployment level to differ from the factual status has to do with registration. Thus, the low amount of benefits given for unemployment in the country causes the unemployed people not to be interested in registering themselves as unemployed ones. And this affects the low level of official registered unemployment both in the region, and, in general, in the country. One of the indicators reflecting the people’s financial welfare level by the economic region is general product output.
Product output by Lankaran economic region
blue – total by Lankaran economic region, mln AZN red – special weight in total product output by the republic, in percent
As seen from the Graph, although there is a dynamic increase observed in the size of product output in the Region, there has been a reverse process in terms of its special weight by the country. The more rapid increase of the natural increase of population in the Lankaran-Astara economic region compared to the overall country, also higher level of poverty rate in the region, the level of unemployment make it important to effectively use the labor resources in the region and to solve the employment problems for increasing the people’s living standards.
Migration It is known that migration from Azerbaijan to foreign countries has increased more in recent years. The process covers all the regions. As an end result, migration leads to violation of the population’s age and gender balance, the decrease in the marriage level, and accordingly, the decrease in number of population. It is also known that it is quite difficult to register the real migration at the moment. Thus, the majority of emigrants, who leave the country, are not registered off. Due to this reason, the accuracy of the information provided by some regions on their emigrants casts some doubts. The real migration is more than what is included in the registration and certainly the reason for this is unemployment and the difficult social status of the population. As we noted above, migration directly affects the level of marriages. Thus, as the young guys constitute the majority among the migrants, the violation of gender balance decreases the level of marriages. Also, financial constraints are among the factors that decrease the cases of marriage. It is known that the marriage rate throughout the whole country has sharply decreased. Such a situation is also observed in Lankaran region.
3.3. Analysis of the current status of a social and economic development of the Lankaran economic region
Agriculture
Since a significant part of the Lankaran economic region population (75.2 percent as of January 1, 2009) live in rural areas, the agricultural sector takes up an important place in the people’s social-economic life. As a whole, Lankaran economic region is mainly considered an agrarian zone. Hence, the share of agriculture in total output of the region has been as follows: 61.3 percent in 2003, 62.0 percent in 2004, 55.1 percent in 2005, 48.9 percent in 2006, 61.8 percent in 2007, and 50.1 percent in 2008. In any region, the development prospects for agriculture depend on the size of existing land fund, structure, and quality. While there is a 0.99 ha land area per person on average in Azerbaijan, this indicator equal to 0.74 ha land area in Lankaran economic region. In terms of quantity, the land area per person in the economic region is little. It should be noted that the main part of the land areas in Lankaran economic region allows for development of agriculture here. Hence, 43.4 percent of the region’s total area is suitable for agriculture, which is roughly 9 points below the national average. There are favorable conditions for growing grains, grapes, fruits and breeding cattle in Lankaran economic region. Table 3.6 Existing land area in Lankaran economic region and its distribution (hectares)
01.01.20 01.01.20 01.01.20 01.01.20 01.01.20 01.01.20 01.01.20 01.01.20 01.01.20
01 02 03 04 05 06 07 08 09 Total land area 636341 636341 635741 635741 635741 635741 606671 606671 606671 – area Including Land area suitable for 280530 280418 279817 279299 279278 279561 263626 263537 263477 agriculture Out of which: -arable land 131245 131835 131814 131908 131887 131687 131400 131311 131298 -perennial plants 9895 9450 9470 9528 9528 9988 10208 10208 10161 -non-cultivated 4695 4646 4646 4546 4546 4049 4049 4049 4051 areas -hayfield 15232 15167 15167 15186 15186 15798 15802 15802 15802 -pastures 119463 119320 118720 118131 118131 118039 102167 102167 102165 Forests 146784 146766 146766 147282 147282 147282 147282 147282 147282
As the table data present, in 2009, 53.7 percent of the arable land for agriculture in the region constituted sowing areas and perennial plants land. 102,165 ha or 44,8 percent of the arable land for agriculture consist of hayfields and pasttures. This shows the limitations of the land areas, which can be involved for develpment of agriculture in the region. The land areas for sowing areas and perennial plants create favorable conditions for development of farming, pasture and hayfield areas. There is also a significant difference betweeen the land funds of different administrative rayons in the region. Thus, the distribution of the rayon areas in the region is as follows: Lankaran – 25.5 percent, Jalilabad – 23.8 percent, Lerik – 17.8 percent, Masalli – 11.9 percent, Yardimli – 11 percent, and Astara – 10.2 percent. Moreover, the level of using arable land for agriculture as the sowing areas is higher in Masalli and Jalilabad rayons. Hence, this indicator equals to 76.7 percent in Masalli rayon and 67.3 percent in Jalilabad rayon. One of the major aspects defining the development direction of agriculture in the region has to do with the changes taking place in the structure of sowing areas in agriculture. Namely, the changes in structure of sowing areas reflect the specialization of the region in terms of which agricultural products it gradually cultivates. For the sowing areas of economically ineffective types of plants or those, which are comparatively less effective than other products, are replaced by the sowing fields of more productive types of plants, and the efficiency of using them is enhanced. And this is significantly affected mainly by the natural and climate conditions of the region, productivity of the sowing fields of different plant types, competitiveness of developed products and the thrifty traditions of the population, which have historically developed.
Table 3.7 Distribution of the lands of Lankaran economic region by rayons (As of January 1, 2005) Including arable land for agriculture Incl. .
Out of which
gardeners gardeners Names of rayons and cities
tations tations
Number Number
Total area area Total
near yards yards near
Forest plots plots Forest
Sowing Sowing
Pastures Pastures
Hayfields Hayfields
agriculture agriculture
Gardens Gardens
seedlings seedlings land of area Total
for agriculture for agriculture
Vineyards Vineyards
Arable land for for land Arable
Collective Collective
Young trees, trees, Young
Tea plan
Arable land not used used not land Arable
Total area of arable land arable of area Total
Land for perennial plants plants perennial Land for
Other perennial plants plants perennial Other
Astara total 61643 6020 2176 190 2 1450 534 156 638 5034 14024 4002 3539 37188 1 Including irrigated area 4566 3083 1436 1250 186 47 4566 Yardimli total 66720 12924 21 21 2589 5115 18934 39583 2502 2310 17260 2 Including irrigated area Lerik total 108127 13654 382 242 140 3463 38406 55905 1970 1702 35895 3 Including irrigated area 406 406 406 Lankaran total 153941 8144 5254 358 49 3 4537 307 555 1686 8391 24030 3703 3225 29050 4 Including irrigated area 9533 5729 3504 30 3400 74 300 9533 Masalli total 72097 25000 1433 45 22 45 1321 80 2167 3895 32575 3742 3318 16881 5 Including irrigated area 9272 8019 1253 1253 9272 Jalilabad total 144143 65556 895 10 824 61 671 2733 27505 97360 11786 11275 11008 6 Including irrigated area 9165 8440 72 432 8944 221 221 Lankaran region, total 606671 131298 10161 866 895 111 7448 841 4051 15802 102165 263477 27705 25369 147282 7 Including irrigated area 32942 25677 6193 30 5903 260 347 72 432 32721 221 221 Azerbaijan, total 8641506 1659672 161549 74135 59006 14080 7553 6775 41761 109689 2551289 4523960 258454 227987 4792 1038814 8 Including irrigated area 1432525 1107371 116484 50445 45185 10370 5960 4524 13434 6302 43377 1286968 139157 139157 3377 3023 In recent years, the area of annual sowing fields has extended. Thus, the increase in 2008 has been roughly 1.2 times more than in 1998. In 1998-2008, there has also been a change in the structure of annual sowing areas. This decrease has taken place mainly due to the fall in fields of wheat, paddy, tobacco and tea. Hence, for the above-mentioned period, the sowing area of barley has increased by 2.3, the sowing area of maize for grain by 4.3 times, sowing areas of sunflower for grain by 2.3 times, sowing areas of potato by 2.2 times, the sowing area of vegetables by 2.5 times, sowing area of watermelon and melons 2 times. However, the sowing areas of wheat, paddy, and tea have decreased by 1.1, 6.3, and 6.8 times, respectively.
Table 3.8 Distribution of the sowing areas by agricultural plants in Lankaran economic region (hectare)
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Sowing areas of 95042 102666 101062 99978 99574 102538 102430 102395 94931 111206 agricultural plants Grain and grain- 81469 85509 71467 79381 78989 78040 76904 75187 67615 82173 leguminous crops Including Wheat 74746 76124 62873 70269 69720 69384 67169 64514 58005 70802 Barley 1745 2461 1702 2150 2512 2548 3775 4473 3529 3958 Maize for grain 287 363 472 514 599 664 658 789 865 1225 Paddy 1695 2791 2466 2182 1855 1067 788 540 305 268 Technical plants Cotton 148 55 20 Tobacco 345 198 156 16 23 13 16 1 Sugar beet 15,1 7 189 100 126 Sunflower for grain 515 866 1012 1030 1113 1096 1161 1164 1177 1163 Tea 6475 5309 3782 3582 3598 3597 2860 1737 1664 952 Potato, vegetable and watermelons/melons Potato 4921 5973 6146 6770 6779 9234 9449 9682 9492 11064 Vegetable 5416 8558 10254 10999 10422 11481 12180 12771 13339 13385 Watermelon and melon 991 1409 1619 1725 1803 1827 1856 1944 1986 1970
It should be noted that there is also an increase in the size of perennial plant areas. Thus, in 1998-2008, the total areas of vineyards and orchards have increased by 1.6 and 1.3, respectively. However, if we take into account that the total area of vineyards constituted 34,696 ha in 1985, there has been 28.2 times decrease in these fields. It should also be taken into account that the restoration of vineyards requires relatively longer time and large investments. Hence, the estimates show that in order to create a hectare of vineyard requires a lot of resources. In order for it to yield fruits, relatively longer time (3 years for initial product yield, and 5 years for full productivity) is required. Table 3.9 Perennial plant lands in Lankaran economic region (hectare)
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Orchards 3573 3865 3875 4022 4144 4334 4377 4708 4783 4584 Vineyards 786 387 58 58 263 273 837 820 1228 1230
Shortage of the sowing area per capita for the rural people, which constitutes a large part of the region’s population, has mainly led the villagers to meet their own demands, and not been sufficient to organize the extension re-production. The shortfall of land shares for the population in economic region limits their ability to efficiently use these lands. Hence, large-scale farms have an advantage over the small-size ones in intensifying the production, involving debt resources, etc. As a whole, the following activities need to be taken in order to develop farming, which plays a significant role in ensuring the employment of people in the economic region and making sure that their employment skills are used effectively: first of all, focus needs to made on increasing both the size, and efficiency of the use of arable land for agriculture, necessary agro technical rules need to be followed in order to enhance the productivity of land. In Lankaran economic region, the rate of using potential sowing areas has increased in recent years. Thus, this increase has been 1.1 in 1999-2008. Moreover, the existing opportunities in this field remain high. In 2008, 84.7 percent of the region’s potential arable land has been used. This indicator has equaled to 112.3 percent in Astara, 108 percent in Lankaran, and 113.1 percent in Jalilabad. This has occurred due to the reason that pastures and hayfields have been used as sowing land. The rate of using potential sowing lands in Yardimli, Lerik, and Masalli has been low.
Table 3.10 The ratio of factual sowing land to potential area in Lankaran economic region (in percent)
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 93,3 104,8 105,5 99,8 104,6 107,6 109,0 108,9 111,8 112,3 Yardimli 83,8 86,2 69,5 63,7 59,8 56,4 45,6 27,6 20,4 28,9 Lerik 84,6 91,3 81,3 66,4 69,8 73,7 74,8 78,0 48,3 29,6 Lankaran 83,4 103,1 112,8 113,8 106,3 106,7 107,0 107,6 107,7 108,0 Masalli 69,0 67,5 64,7 67,2 63,3 64,7 66,3 68,1 56,2 54,9 Jalilabad 71,8 72,5 74,4 76,5 77,8 81,3 82,5 84,9 85,5 113,1 Lankaran 75,5 78,2 76,7 75,8 75,5 77,7 77,8 77,9 72,3 84,7 economic region
As the table data show, the high increase in sowing areas of the region has mainly taken place in Jalilabad and Lankaran. Thus, in 1998-2008, while the increase in sowing areas of the economic region has been 1.1, the respective increase by these rayons has constituted 1.6 and 1.3, respectively. Table 3.11 The factual sowing are in Lankaran economic region
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 5943 6473 6448 6098 6391 6574 6661 6652 6729 6761
Yardimli 10795 11017 8931 8176 7681 7240 5862 3548 2619 3732 Lerik 11693 12204 11109 9071 9537 10070 10210 10647 6599 4046 Lankaran 6875 8431 9228 9305 8695 8728 8755 8787 8795 8796 Masalli 17096 16887 16195 16798 15837 16189 16594 17032 14067 13736 Jalilabad 42640 47654 49151 50530 51433 53737 54348 55729 56122 74135 Lankaran economic 95042 102666 101062 99978 99574 102538 102430 102395 94931 111206 region By country 920429 1041542 1162335 1222908 1219523 1293752 1327922 1326289 1323862 1499881
The agricultural products have constituted 375,146 thousand manats in 2008. This is roughly a 19.7 percent compared to the previous year, and has occurred mainly at the expense of plant-growing field. Hence, for the above-mentioned period, while there has been a 17.8 percent increase in animal-produce development, the development of plant- growing products has risen by 20.8 percent. While the special weight of Lankaran economic region in terms of the arable land for agriculture of the country, as a whole, was 5.8 percent in 2008, its share in agricultural products constituted 11.3 percent.
Table 3.12 Size of agricultural production in Lankaran economic region (thousand AZN )
Including Total agricultural products Plant-growing Cattle-breeding
2003 2005 2006 2007 2008 2003 2005 2006 2007 2008 2003 2005 2006 2007 2008
Total by country 1366521 1732077 1908681 2764973 3308355 806972 988217 1063322 1726401 2084948 559548 743860 845359 1038572 1223407 Lankaran 156177 196108 216601 338274 375146 94733 115085 125360 231779 252941 61444 81022 91241 106495 122205 economic region Astara rayon 17588 26199 27598 48357 53811 12534 18536 20181 38153 41571 5054 7663 7417 10204 12240 Jalilabad rayon 54721 71904 83551 108350 122758 34182 45395 53574 75166 84877 20540 26509 29977 33184 37881 Lerik rayon 14706 15692 17521 21970 24718 6776 6489 5407 8750 9572 7929 9203 12114 13220 15146 Masalli rayon 31465 37554 39600 65439 77459 16542 18433 17951 39544 48654 14922 19121 21649 25895 28805 Yardimli rayon 7930 9250 9572 12766 15736 3387 2796 2628 4255 5811 4543 6454 6944 8511 9925 Lankaran rayon 29766 35509 38759 81392 80664 21311 23436 25619 65911 62456 8455 12073 13140 15481 18208
The shares of rayons in agricultural products of the economic region have been as follows in 2008: Jalilabad – 32.7 percent, Lankaran – 21.5 percent, Masalli – 20.6 percent, Astara – 14.3 percent, Lerik – 6.6 percent, Yardimli – 4.2 percent. As it seems, the major agricultural rayons of the region are Jalilabad, Lankaran, and Masalli. Plant raising constitutes a substantial superiority in the rayons of Astara, Jalilabad, Masalli, and Lankaran in terms of agricultural products in Lankaran economic region. In the rayons of Lerik and Yardimli, cattle-breeding makes up the foundation of economy, which has to do with the natural conditions. As a whole, Lankaran economic region enjoys favorable conditions for development of both plant-raising and cattle-breeding. For the territory of the region is divided into mountainous, foothill and plain zones, according to which, agriculture can be developed.
Table 3.13 Structure of agriculture in the rayons included in Lankaran economic region in 2008 (in percent)
Plant-growing Cattle-breeding Lankaran economic region 67 33 Astara rayon 77 23 Jalilabad rayon 69 31 Lerik rayon 39 61 Masalli rayon 63 37 Yardimli rayon 37 63 Lankaran rayon 77 23
In recent years, rigorous changes have taken place in the structure of total products of agriculture. Hence, the production of the following plants have increased in 1998-2008: grain and grain/leguminous crops – 1.3 times, wheat production – 1.3 times, barley production – 3.1 times, maize production for grain – 6.7 times, sunflower production for grain – 4.6 times, tea production – 1.1 times, potato production – 2.5 times, vegetable production – 2.6 times, watermelon/melon production – 3.2 times, and fruit production – 1.3 times. The production of paddy and grape have decreased by 6.1and 4.7 times, respectively.
Table 3.14 Total harvesting and productivity of agricultural plants in Lankaran economic region (in all categories of farms)
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Total collection, by ton Grain and grain/leguminous 148320 194385 171589 187795 191074 187419 186171 184777 167985 191768 plants Wheat 129865 162549 144740 160994 163096 163462 162138 160484 147624 167990 Barley 2447 5129 2660 3503 4150 4339 6540 7667 6046 7571 Maize for grain 439 1122 1222 1641 1968 2268 2303 2677 2815 2961 Paddy 10645 19372 16514 14382 13209 7865 5751 3962 2257 1751
Cotton 419 60 33 Tobacco 282 93 260 4 41 23 33 2 Sugar beet 447 4 1915 1845 1858 Sunflower for 300 804 1097 1133 1304 1276 1355 1328 1335 1367 grain Tea 817 1076 1408 1399 884 989 686 612 438 884 Potato 77045 111981 112680 118485 122114 161776 164318 167513 165446 190392 Vegetable 109928 198848 218144 232429 226690 253358 272222 279556 287600 283635 Watermelon/melon 8468 15946 17353 19248 21149 22396 24773 26001 26827 26755 Fruit 30734 42701 39158 39123 41618 41908 44862 44656 46629 39326 Grape 13721 1266 1090 1693 1877 657 1333 1553 2269 2903 Productivity, quintal from hectare Grain and grain/leguminous 18,2 22,7 24,0 23,7 24,2 24,0 24,2 24,6 24,8 23,3 plants Wheat 17,4 21,4 23,0 22,9 23,4 23,6 24,1 24,9 25,5 23,7 Barley 14,0 20,8 15,6 16,3 16,5 17,0 17,3 17,1 17,1 19,1 Maize for grain 15,3 30,9 25,9 31,9 32,9 34,2 35,0 33,9 32,5 24,2 Paddy 62,8 69,4 67,0 65,9 71,2 73,7 73,0 73,4 74,0 65,3 Cotton 28,3 12,6 16,5 Tobacco 8,0 4,7 16,7 2,6 17,8 17,7 20,6 24,0 Sugar beet 296 6 101 185 147 Sunflower for 5,8 9,3 10,8 11,0 11,7 11,6 11,7 11,4 11,3 11,8 grain Tea 1,3 2,0 3,7 3,9 2,5 2,7 2,4 3,5 2,6 3,2 Potato 157 187 183 175 180 175 174 173 174 172 Vegetable 203 232 213 211 218 221 223 219 216 212 Watermelon/melon 85 113 107 112 117 123 133 134 135 136
The production of tobacco in the region has been ceased since 2007. It should be noted that the grape production in the region constituted 2,903 tons in 2008, which is 94.2 times less than the indicator in 1985. The differences mentioned above in terms of the differences of production rates of various agricultural products have caused changes in the structure of agricultural production. The decrease in the amount of noted products mainly has to do with the problems in sale and the operations of processing units. Under the conditions of new economic management, realization of entrepreneurship interests has stimulated an increase in the productivity of development of agricultural products. However, there has been a decrease in productivity of vegetable output. The share of Lankaran economic region in the country’s grain and grain beans sowing fields constituted 9.2 percent in 2008. The major rayons for the region’s grain and grain bean sowing fields are Jalilabad and Masalli. In 2008, the share of these rayons in the region’s grain and grain bean sowing fields constituted 89.7 percent.
Table 3.15 Grain and grain bean sowing fields, in ha
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 4948 4500 4161 2902 2958 2341 2063 1753 1378 1498
Jalilabad 38258 42649 43950 45168 45994 46678 47269 48284 48726 65956 Lerik 9351 10919 9380 7616 7777 8051 8106 8132 4932 2378 Masalli 14292 14047 2526 12910 12048 11827 12003 12025 8804 7781 Yardimli 10341 10442 8378 7580 7233 6599 5111 2749 1815 2813 Lankaran 4279 2952 3072 3205 2979 2544 2352 2244 1960 1747 Lankaran economic 81469 85509 71467 79381 78989 78040 76904 75187 67615 82173 region
In Lankaran economic region, the production of grain and grain beans has increased by 1.3 times in 2008 compared to 1998, reaching 191.8 thousand tons, which constitutes 7.7 percent of the production size of grain and grain beans throughout the country. Te share of Jalilabad and Masalli in terms of region’s grain and grain bean production constituted 89.3 percent.
Table 3.16 Production of grain and grain beans, in tons
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 16727 21830 16408 11892 13496 12089 10345 8648 6528 6829 Jalilabad 70357 102305 110718 116410 119306 121567 123561 126183 127273 152786 Lerik 11900 14870 15287 12690 13093 13646 13699 13742 7878 4293 Masalli 27977 30093 5868 24720 24020 24016 25941 27405 20141 18485 Yardimli 15554 18546 15049 13715 12173 10909 7676 4213 2670 5936 Lankaran 5805 6741 8259 8368 8986 5192 4949 4586 3495 3439 Lankaran 148320 194385 171589 187795 191074 187419 186171 184777 167985 191768 economic region
The highest productivity in the economic region in terms of producing grain and grain beans has been in Astara. It should be noted that the relative low result of productivity in Lerik has to do with the natural factors. Table 3.17 Productivity of grain and grain beans, in quintal/ha
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 33,8 48,5 39,4 52,4 45,6 51,6 50,1 49,3 47,4 45,7 Jalilabad 18,4 24 25,2 25,8 25,9 26 26,1 26,1 26,1 23,2 Lerik 12,7 13,6 16,3 16,7 16,8 16,9 16,9 16,9 16 18,1 Masalli 19,6 21,4 23,2 19,1 19,9 20,3 21,6 22,8 22,9 23,8 Yardimli 15,1 17,8 18 18,1 16,8 16,5 15 15,4 15,2 21,1 Lankaran 13,6 22,8 26,9 26,1 30,2 20,4 21 20,4 17,8 19,7 Lankaran economic 18,2 22,7 24,0 23,7 24,2 24,0 24,2 24,6 24,8 23,3 region
The large part of sowing fields in the economic region includes wheat fields. Hence, the region’s sowing fields included 63.7 percent of wheat in 2008. Nevertheless, in 1998-2008, the wheat sowing fields has decreased by 1.1 times in the region. Table 3.18 Wheat sowing field, in ha
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 3514 2230 2247 1098 1279 697 650 274 138 185 Jalilabad 35481 38966 40046 40946 41536 42326 42745 43562 44012 60148 Lerik 8763 10689 9258 7518 7360 7889 7194 7139 4703 2157 Masalli 13147 12039 1223 11425 10786 10506 10338 10069 7056 5497 Yardimli 10152 10136 8000 7085 6818 6132 4573 1950 1126 2139 Lankaran 3689 2064 2099 2197 1941 1834 1669 1520 970 676 Lankaran 74746 76124 62873 70269 69720 69384 67169 64514 58005 70802 economic region
Even though there has been a decrease in the sowing fields till 2007, there has been 1.2 times increase recorded in 2008 compared to the previous year. And this has to do with the supplementary subsidies to agricultural producers for growing wheat fields. The rayons of Jalilabad and Masalli distinguish in the region for their wheat sowing fields. In 2008, the shares of these rayons in the region’s wheat sowing fields have constituted 85 percent and 7.8 percent, respectively. Wheat dominates the production of grain and grain beans. Thus, wheat constituted 87.6 percent of the grain and grain beans production in 2008. Like in the sowing fields, the rayons of Jalilabad and Masalli also constitute the majority of production here.
Table 3.19 Wheat production, in ton
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 7439 6235 4908 1360 2415 1375 1285 523 268 352 Jalilabad 66347 95584 104530 109547 111693 114072 115949 118329 119715 144155 Lerik 11230 14492 15036 12517 12609 13412 12374 12156 7619 3944 Masalli 25111 24515 1567 20105 20112 20970 22202 23203 16492 13320 Yardimli 15333 18108 14555 12983 11597 10246 6933 3063 1711 4634 Lankaran 4405 3615 4144 4482 4670 3387 3395 3210 1819 1585 Lankaran 129865 162549 144740 160994 163096 163462 162138 160484 147624 167990 economic region
The productivity of wheat in Lankaran economic region is lower than the average rate for country. However, the rates of productivity vary among the region’s rayons. Thus, while the productivity rate of wheat in Masalli equals to 24.2 quintals per hectare, the same indicator constitutes 18.3 quintals n Lerik.
Table 3.20 Productivity of wheat, quintal/ha
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 21,2 28 21,8 18,6 18,9 19,7 19,8 19,1 19,4 19 Jalilabad 18,7 24,5 26,1 26,8 26,9 27 27,1 27,2 27,2 24 Lerik 12,8 13,6 16,2 16,6 17,1 17 17,2 17 16,2 18,3 Masalli 19,1 20,4 12,8 17,6 18,6 20 21,5 23 23,4 24,2
Yardimli 15,2 17,9 18,2 18,3 17 16,7 15,2 15,7 15,5 21,7 Lankaran 11,9 17,5 19,7 20,4 24,1 18,5 20,3 21,1 18,8 23,4 Lankaran 17,4 21,4 23,0 22,9 23,4 23,6 24,1 24,9 25,5 23,7 economic region
Unlike the wheat sowing fields, the barley fields have increased in the Lankaran economic region. Thus, in 1998-2008, this increase has been 2.3 times. The majority of the sowing fields is shared by the rayons of Jalilabad and Masalli.
Table 3.21 Barley sowing field, ha
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 34 9 10 28 27 Jalilabad 915 1419 1504 1634 1740 1750 1914 2186 2215 2217 Lerik 390 50 27 1 304 25 803 879 174 53 Masalli 396 883 125 331 346 645 948 1260 1037 1533 Yardimli 31 75 37 174 113 128 108 138 70 125 Lankaran 13 9 2 10 5 3 Lankaran 1745 2461 1702 2150 2512 2548 3775 4473 3529 3958 economic region
Along with the increase in barley sowing fields in Lankaran economic region, the production has also risen by 1.3 times in 1998-2008. The highest rates of barley production in the region have taken place in the rayons of Yardimli and Masalli (8.6 and 5.3 times, respectively). The increase of barley production has been affected by the rise in productivity. Hence, in 1998-2008, the productivity of barley has increased by 5.1 points, reaching 19.1 quintals/ha. The highest rate of productivity in the region has been 21.1 quintals/ha in Masalli. Table 3.22 Productivity of barley, quintals/ha
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 28,4 18 10 18,9 21,4 Jalilabad 14,7 22,3 15,8 16,2 16,8 16,6 17 16,3 17 17 Lerik 10,7 12,3 14,1 10 11 10,3 14,8 16,3 11,1 13,6 Masalli 15,8 18,9 14 16,3 20,2 18,8 20,3 19,9 18,9 21,7 Yardimli 15 18 13,6 17,8 15,8 15,8 15,4 12,4 17 22 Lankaran 20,7 19,8 15 18 10 20,4 Lankaran 14,0 20,8 15,6 16,3 16,5 17,0 17,3 17,1 17,1 19,1 economic region
In recent years, the sowing fields for grain maze have substantially increased. In 1998- 2008, which were the years analyzed, the sowing fields for grain maze have increased by 4.3 times. The highest rate of increase has constituted 12.2 times in rayon of Lankaran. Table 3.23 Sowing fields for grain maze, in ha
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 94 104 144 217 226 266 273 361 374 390 Jalilabad 71 112 123 131 138 139 141 152 114 115
Lerik 49 44 39 32 15 32 8 4 9 27 Masalli 24 22 62 53 69 68 69 72 75 95 Lankaran 49 81 104 81 151 159 167 200 293 598 Lankaran 287 363 472 514 599 664 658 789 865 1225 economic region
In 1998-2008, the production of grain maze has substantially increased in Lankaran economic region. The increase has constituted 6.7 times. In these years, more increase has taken place in the rayons of Lankaran and Astara (14.7 and 14.4 times, respectively).
Table 3.24 Production of grain maze, in tons
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 106 365 203 718 823 1043 1066 1413 1447 1525 Jalilabad 139 420 481 515 539 553 557 558 394 364 Lerik 74 151 148 108 51 93 25 12 29 42 Masalli 62 37 108 88 132 129 131 133 136 177 Lankaran 58 149 282 212 423 450 524 561 809 853 Lankaran 439 1122 1222 1641 1968 2268 2303 2677 2815 2961 economic region
The increase in production of grain maze has been substantially affected by the rise in productivity, in addition to the growth of sowing fields. Thus, while the productivity of grain maze constituted 15.3 quintals/ha in 1998, this number equals 24.2 quintals/ha in 2008.
Table 3.25 Productivity of grain maze, in quintals/ha
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 11,2 35,1 14,1 42,7 36,4 39,2 39 39,1 38,7 39,1 Jalilabad 19,5 37,5 39,1 39,3 39,1 39,8 39,5 36,7 34,6 31,7 Lerik 15,1 34,4 37,9 33,8 34 29,1 31,3 29,5 31,9 15,6 Masalli 25,6 16,6 17,4 16,6 19,2 18,9 19 18,4 18,1 18,6 Lankaran 11,7 18,4 27,1 26,2 28 28,3 31,4 28,1 27,6 28,6 Lankaran 15,3 30,9 25,9 31,9 32,9 34,2 35,0 33,9 32,5 24,2 economic region
The natural and climate features of the region create favorable conditions for development of paddy growing. However, the sowing paddy fields in the region has been gradually decreasing since 2000. Thus, in 1998-2000, the sowing fields have increased by 1.6 times, but decreased by 10.4 times in 2000-2008. This has taken place due to the lack of sowing fields in rayons of Masalli and Lankaran, and the decrease in other rayons.
Table 3.26 Sowing paddy fields, in ha 1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 1279 2001 1584 1313 1146 951 712 535 304 267 Masalli 117 372 412 383 285 37 40 3 Lankaran 299 418 470 486 424 79 36 2 1 1 Lankaran 1695 2791 2466 2182 1855 1067 788 540 305 268 economic
region In addition to the decrease in the sowing paddy fields, the size of production has also seen a fall. The decrease constituted 11.1 times in 2000-2008. In particular, the decrease has been from 2,315 tons in 2000 to 2 tons in 2008 in rayon of Lankaran.
Table 3.27 Production of paddy, in tons
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 9111 14909 11065 9014 8320 7000 5214 3931 2250 1749 Masalli 545 2148 2392 2215 1663 217 231 17 Lankaran 989 2315 3057 3153 3226 648 306 14 7 2 Lankaran 10645 19372 16514 14382 13209 7865 5751 3962 2257 1751 economic region
The same situation is observed in productivity of paddy. Thus, the productivity has decreased from 69.4 quintals/ha in 2000 to 65.3 quintals/ha in 2008. The productivity of paddy in rayon of Lankaran has been the lowest in 2008 (24 quintals/ha). Table 3.28 Productivity of paddy, in quintals/ha
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 71,2 74,5 69,9 78,8 72,6 73,6 73,2 73,5 74 65,5 Masalli 46,6 57,7 58,1 57,8 58,4 58,7 57,7 58 Lankaran 34,6 55,4 65 64,9 76,1 82 85 70 68 24 Lankaran 62,8 69,4 67,0 65,9 71,2 73,7 73,0 73,4 74,0 65,3 economic region
Even though the cotton sowing fields is not characteristic for the region, some cotton is grown in rayon of Jalilabad (20 ha in 2008). Table 3.29 Cotton sowing fields, in ha
2006 2007 2008 Jalilabad 148 55 20 Lankaran economic region 148 55 20
Due to the shortage of sowing fields, the cotton production is also of negligible quantity. That is, in 2008, a total of 33 tons of cotton were produced. Table 3.30 Cotton production, in tons
2006 2007 2008 Jalilabad 419 60 33 Lankaran economic region 419 60 33
With regards to productivity, 16.5 quintals of product per hectare have been obtained. Let’s note that this indicator throughout the country has constituted 11.5 quintals/ha. Table 3.31
Productivity of cotton, in quintals/ha
2006 2007 2008 Jalilabad 28,3 12,6 16,5 Lankaran economic region 28,3 12,6 16,5
Tobacco is not planned in the economic region since 2007. Therefore, there is no production. However, since 2004, sugar beets are grown in the region. 95.2 percent of the sugar beets is grown in Jalilabad. Table 3.32 Sugar beets sowing fields, in ha
2004 2005 2006 2007 2008 Jalilabad 130 100 120 Masalli 15 7 6 Yardimli 7 52 Lankaran 0,1 Lankaran economic region 15,1 7 189 100 126
This is shown in production results, as well. Thus, in 2008, out of the totally produced 1,858 tons of sugar beets, the rayon of Jalilabad has a share of 1,800 tons. Table 3.33 Production of sugar beets, in tons
2004 2005 2006 2007 2008 Jalilabad 1775 1845 1800 Masalli 446 60 58 Yardimli 4 80 Lankaran 1 Lankaran economic region 447 4 1915 1845 1858
The productivity indicator has been higher (150 quintals/ha) in rayon of Jalilabad.
Table 3.34 Productivity in sugar beets, in quintals/ha
2004 2005 2006 2007 2008 Jalilabad 141 185 150 Masalli 299 100 100 Yardimli 10 20 Lankaran 90 Lankaran economic region 296 6 101 185 147
In 1998-2008, the sunflower sowing fields have increased 2.3 times and 76.2 percent of these sowing fields were based in Jalilabad in 2008. Table 3.35 Sowing fields for sunflower grain, in ha
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 12 Jalilabad 412 770 796 814 833 834 895 897 900 886 Masalli 52 46 201 211 272 250 253 253 254 253 Lankaran 51 38 15 5 8 12 13 14 23 24 Lankaran 515 866 1012 1030 1113 1096 1161 1164 1177 1163 economic region
Jalilabad leads other rayons in production of sunflower grain, as was the case with sowing fields. In 2008, this rayon produced 64.3 percent of the sunflowers produced in the region. Table 3.36 Production of sunflower grain, in tons
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 1 Jalilabad 108 720 780 822 847 866 886 865 872 879 Masalli 155 60 309 308 451 400 461 454 449 474 Lankaran 37 23 8 3 6 10 8 9 14 14 Lankaran 300 804 1097 1133 1304 1276 1355 1328 1335 1367 economic region
The high productivity in Masalli affected the relatively less share of Jalilabad in production, compared to sowing areas. Thus, in 2008, while the productivity in Jalilabad constituted 9.9 quintals/ha, this indicator equaled 18.8 quintals/ha in Masalli. In general, the productivity of sunflower grain increased more than 2 times in 1998-2008.
Table 3.37 Productivity of sunflower grain, in quintals/ha
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 7 Jalilabad 2,6 9,4 9,8 10,1 10,2 10,4 10 9,9 9,7 9,9 Masalli 29,8 13 15,4 14,6 16,6 16,5 18,4 18,2 18,3 18,8 Lankaran 7,3 5,9 5,5 6 7,5 8 6,1 6,4 6,1 6,1 Lankaran 5,8 9,3 10,8 11,0 11,7 11,6 11,7 11,4 11,3 11,8 economic region
Tea-growing is one of the major areas where the region is specialized in. However, there has been a sharp decrease in these areas in recent years Hence, in 2008, there were 415 has tea gardens in the economic region in 2008, which is 6.8 times less than compared to 1998. During this period, the sowing fields in Astara and Lankaran, which are the major tea-growing rayons, have substantially decreased. In 2008, there were no sowing fields in Masalli. Let’s note that cultivating tea gardens require a lot of time, and at the same, substantial resources. Demolition of these fields has affected the region’s economy quite negatively. Table 3.38 Area of tea plantations, in ha
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 1481 1440 1354 1354 1354 1354 757 759 625 415
Jalilabad Lerik 124 124 124 124 140 140 140 Masalli 789 400 400 200 200 200 60 60 60 Yardimli Lankaran 4081 3345 1904 1904 1904 1903 1903 978 979 537 Lankaran 6475 5309 3782 3582 3598 3597 2860 1737 1664 952 economic region
In 1998-2008, along with the sowing areas, production of tea has also decreased. The decrease rate has been 2.9 times. The decrease has take place more in Lankaran (decreased 4 times). Table 3.39 Production of green tea leaves, in tons
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 502 469 503 476 372 437 330 275 280 372 Lerik 4 13 10 9 10 5 6 9 Masalli 21 52 57 55 25 25 18 20 2 25 Lankaran 294 551 835 858 478 517 333 311 156 478 Lankaran 817 1076 1408 1399 884 989 686 612 438 884 economic region
The productivity in green tea leaves has relatively increased. This has resulted in more decrease of production compared with the sowing areas. Table 3.40 Productivity of green tea leaves, in quintals/ha
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 3,4 3,3 3,7 3,5 2,7 3,2 4,4 3,6 4,5 4,9 Lerik 0,3 1,1 0,8 0,6 0,7 0,4 Masalli 0,3 1,3 1,4 2,7 1,3 1,2 3,1 0,3 Lankaran 0,7 1,6 4,4 4,5 2,5 2,7 1,8 3,2 1,6 1,4
In recent years, the potato sowing fields have substantially increased. In 1998-2008, which were the years reviewed, the potato sowing areas have increased 2.2 times, reaching 11,094 ha. Jalilabad had a 45 percent share of the overall potato cultivation in Lankaran economic region. Table 3.41 Potato sowing fields, ha
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 556 857 806 1119 1131 1586 1649 1688 1349 1300 Jalilabad 2243 2305 2408 2459 2480 4051 4055 4114 4155 4975 Lerik 1136 1017 1196 1197 1201 1249 1273 1321 1091 1164 Masalli 436 751 556 694 787 1014 1041 1119 1370 1877 Yardimli 342 460 434 503 391 533 624 628 653 767 Lankaran 208 583 746 798 789 801 807 812 874 981 Lankaran economic 4921 5973 6146 6770 6779 9234 9449 9682 9492 11064 region
The potato production has increased 2.5 times in 1998-2008 in Lankaran economic region. The major part of potato production in the region is shared by rayon of Jalilabad. Hence, in 2008, the rayon had a 58.9 percent of the potato production in total bulk of the region. Moreover, in 1998-2008, the years analyzed by the team, the highest increase in the region took place in Masalli (8.2 times). Table 3.42 Potato production, in tons
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 7529 11235 7773 9019 9654 14500 15314 15790 12709 12332 Jalilabad 53110 73069 75106 76445 77419 106585 106752 107865 108765 112225 Lerik 7825 11292 13425 13641 13929 14602 15022 15587 12684 15340 Masalli 4210 6820 5318 7181 9951 13025 13814 14855 17556 34666 Yardimli 3249 4798 4641 5330 4118 5854 6105 6020 6201 7352 Lankaran 1122 4767 6417 6869 7043 7210 7311 7396 7531 8477 Lankaran economic 77045 111981 112680 118485 122114 161776 164318 167513 165446 190392 region
With regards to productivity rate, in 2008, the highest productivity rates were in Masalli (185 quintals/ha) and Jalilabad (178 quintals/ha). Let’s note that the average productivity rate in Lankaran economic region constituted 172 quintals/ha in 2008, which is 19 points higher than the national average.
Table 3.43 Productivity in potatoes, in quintals/ha
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 135 131 96 100 85 91 93 94 94 95 Jalilabad 237 185 185 186 186 186 186 186 186 178 Lerik 75 111 112 114 116 117 118 118 116 132 Masalli 93 89 89 101 126 128 133 133 116 185 Yardimli 95 104 107 106 105 110 98 96 95 96 Lankaran 54 82 86 86 89 90 91 91 86 86 Lankaran economic 157 187 183 175 180 175 174 173 174 172 region
The area of economic region is quite favorable for planting vegetables and it distinguishes among other economic regions in country for its sowing fields. Thus, in 2008, 13,385 ha of vegetables were planted in Lankaran economic region, which constitutes 16.1 percent of the overall vegetables in country. Among the agricultural products, one of the highest recorded sowing areas is vegetable sowing fields. In 1998-2008 alone, the increase of these sowing areas in the region has roughly been 2.5 times. The highest increase in the region took place in rayons of Astara and Lankaran. The shares of the rayons in the economic region in vegetable planting fields have been as follows: Lankaran - 41.7 percent, Astara – 21.7 percent, Masalli – 19.6 percent, Jalilabad – 13.9 percent, and Lerik and Yardimli – 3.1 percent each. Table 3.44
Vegetable planting areas, in ha
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 260 706 1023 1569 1764 2057 2355 2612 3063 2900 Jalilabad 1351 1660 1709 1792 1816 1816 1817 1830 1857 1857 Lerik 166 185 242 247 246 295 312 326 248 265 Masalli 1444 1395 2170 2275 1877 2096 2258 2482 2404 2624 Yardimli 100 115 119 93 57 108 118 119 151 152 Lankaran 2095 4497 4991 5023 4662 5109 5320 5402 5616 5587 Lankaran economic 5416 8558 10254 10999 10422 11481 12180 12771 13339 13385 region
The increase in vegetable planting areas has also affected its production. In 1998-2008, the years under review, vegetable production has increased 2.6 times and constituted 23.1 percent in vegetable production throughout the country. The highest increase rates in the region took place in rayons of Astara (8.9 times) and Lankaran (3.6 times). Table 3.45 Vegetable production, in tons
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 6117 17147 20257 21241 28402 36443 43241 48146 53892 54598 Jalilabad 10808 15190 15774 16576 16897 16909 16964 17054 17087 17090 Lerik 2228 2017 2827 3786 3903 4720 4995 5216 3512 3687 Masalli 51654 47102 57397 66220 50328 57073 66444 67127 67338 68619 Yardimli 1293 1673 1747 1311 799 1560 1686 1685 2158 2181 Lankaran 37828 115719 120142 123295 126361 136653 138892 140328 143613 137460 Lankaran economic 109928 198848 218144 232429 226690 253358 272222 279556 287600 283635 region
The region is quite ahead of the national average indicators by the productivity in vegetables. Hence, in 2008, while the average vegetable productivity in country constituted 142 quintals/ha, this indicator in Lankaran economic region made up 212 quintals/ha, that is 1.5 times more. We can remark that the highest productivity rates were seen in Masalli (255 quintals/ha) and Lankaran (246 quintals/ha). Table3.46 Productivity of vegetables, in quintals/ha
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 235 243 198 185 161 177 184 184 176 188 Jalilabad 80 92 92 93 93 93 93 93 92 92 Lerik 134 109 117 159 159 160 160 160 142 139 Masalli 280 229 247 282 263 267 294 263 269 255 Yardimli 131 146 147 141 140 144 143 142 143 144 Lankaran 181 257 241 246 271 268 261 260 256 246 Lankaran economic 203 232 213 211 218 221 223 219 216 212 region
The sowing fields of watermelons and melons in Lankaran economic region doubled in 1998-2008. This increase mainly took place at the expense of Astara. Hence, the sowing fields of watermelons and melons in the rayon increased 4 times. In terms of the size of sowing fields, Masalli (36.6 percent) and Astara (33.9 percent) lead other rayons. Table 3.47 Sowing fields of watermelons and melons, in ha
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 165 408 458 505 523 578 594 599 631 668 Jalilabad 232 270 288 297 310 310 312 316 319 321 Masalli 414 434 565 669 719 681 688 764 771 721 Lankaran 180 297 308 254 251 258 262 265 265 260 Lankaran economic 991 1409 1619 1725 1803 1827 1856 1944 1986 1970 region
The great majority of watermelon and melon production in the economic region takes place in Masalli and Astara. Hence, in 2008, 86.7 percent of the watermelons and melons produced in the region were shared by these rayons. Table 3.48 Production of watermelons and melons, in tons
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 2421 8844 7577 7970 8699 9881 10190 10366 11152 11808 Jalilabad 696 1130 1217 1256 1314 1316 1327 1343 1361 1365 Masalli 4438 4132 6631 7952 9045 9064 11073 12088 12099 11393 Lankaran 913 1840 1928 2070 2091 2135 2183 2204 2215 2189 Lankaran economic 8468 15946 17353 19248 21149 22396 24773 26001 26827 26755 region
Masalli and Astara take the lead in production of watermelons and melons. In addition to this, the productivity rate has also been high in these rayons. In 2008, the productivity rate in these rayons constituted 158 quintals/ha and 177 quintals/ha, respectively. Table 3.49 Productivity of watermelons and melons, in quintals/ha
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 147 217 165 171 166 171 172 173 177 177 Jalilabad 30 42 42 42 42 42 43 43 43 43 Masalli 107 95 117 117 126 126 161 158 157 158 Lankaran 51 62 63 82 83 83 83 83 84 84 Lankaran economic 85 113 107 112 117 123 133 134 135 136 region
Lankaran economic region also has favorable conditions for growing different types of fruits. This is reflected in the increase of orchards in 1998-2008. During this period, even though the size of orchard sowing fields has increased 1.3 times in the region, there has been a 4.2 percent decrease recorded in 2008, compared to the previous year. 65.6 percent of the orchards is shared by Astara and Lankaran. It is mainly the citrus fruits that dominate in the region. Table 3.50 Sowing fields for orchards, in ha
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 1208 1205 1211 1215 1220 1383 1399 1377 1532 1515 Jalilabad 175 181 183 183 183 183 184 426 427 427 Lerik 301 305 306 359 463 468 468 470 466 466 Masalli 238 253 254 316 307 308 310 401 314 418 Yardimli 251 252 251 256 257 257 261 261 262 264 Lankaran 1400 1669 1670 1693 1714 1735 1755 1773 1782 1494 Lankaran 3573 3865 3875 4022 4144 4334 4377 4708 4783 4584 economic region
The fruit production has increased in 1998-2008, as was the case for sowing fields; however, there has been a decrease in fruit production in 2008 compared to the previous year. The decrease mainly had to with the natural conditions. Table 3.51 Fruit production, in tons
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 10480 22581 18058 19796 20714 22338 22419 22539 22542 22542 Jalilabad 941 1269 1316 1324 1332 1334 1341 1344 1357 1372 Lerik 4612 3591 2729 1950 3011 1812 3192 1805 2176 1489 Masalli 3650 4025 3976 2532 2492 2498 2505 2632 2652 2683 Yardimli 1097 924 954 894 839 931 755 901 903 Lankaran 9954 10311 12125 12627 13230 13926 14474 15581 17001 10337 Lankaran economic 30734 42701 39158 39123 41618 41908 44862 44656 46629 39326 region
The above-noted tendency is also observed in productivity. According to productivity, Astara has the highest indicator in the region – 195.6 quintals/ha.
Table 3.52 Productivity of fruits, in quintals/ha
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 108,6 211,6 166,3 178,3 182 177,3 176,7 228,6 167,3 195,6 Jalilabad 59,2 70,1 71,9 72,3 72,8 72,9 73,1 35,2 35,4 35,8 Lerik 160,2 124,2 94,9 64,5 99,2 59,4 103,4 38,9 69,2 47,9 Masalli 185,3 187,2 183,2 80,6 102,5 99,9 96,7 82,5 101,2 81,5 Yardimli 59,3 40 38 35,6 33,3 36,4 38,7 34,7 34,5 Lankaran 73,8 62,8 76,5 78,3 80,8 83,6 84,3 112,8 99,7 80,4 Lankaran economic 86 110 101 97 100 97 102 95 97 86 region
Taking into account the favorable natural conditions and the abundance of labor forces in the region, it would be prudent to develop growing tea and grapes, which are more labor- intensive areas. However, the crisis that surrounded the country in 1990s has led to complete demolition of these farming areas in the region, marked decrease of agricultural production, and the ceasing of processing and storing units. It should be noted that the size of vine- growing in the region constituted 34,696 ha in 1985. Nevertheless, the total area of vine- growing has decreased 28.2 times, making up 1,230 ha in 2008, due to the following reasons: failure of the local infrastructure, i.e. vine storing and processing units to re-organize their operations in line with the modern requirements, emerging problems with regards to making vine, etc. Table 3.53 Vineyard sowing fields, in ha
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 2 2 2 2 2 2 2 2 4 Jalilabad 399 40 50 614 614 1005 1005 Masalli 21 21 21 21 21 21 21 3 21 21 Lankaran 364 364 35 35 200 200 200 203 200 200 Lankaran 786 387 58 58 263 273 837 820 1228 1230 economic region
There has been an increase, a relative one, in recent years. Thus, in 1998-2008, the area of vine sowing has increased 1.6 times. However, this increase is quite insignificant compared to the above-mentioned decrease. The noted decrease has significantly affected the decrease in size of production. Thus, while the size of grape production constituted 273,493 tons in 1985, this indicator made up 2,903 tons in 2008, which means a 94.2 times decrease. In 1998-2008, the years analyzed by the team, there has been a 4.7 times decrease. The decrease in size of production in background of the increased sowing areas has to do with the recent creation of these fields during the last years. Table 3.54 Grape production, in tons
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 2 23 9 9 20 17 17 18 19 19 Jalilabad 13503 1065 427 153 162 266 449 652 1195 1792 Masalli 189 162 602 1329 1410 147 545 651 654 693 Lankaran 27 16 52 202 285 227 322 232 401 399 Lankaran 13721 1266 1090 1693 1877 657 1333 1553 2269 2903 economic region
This can been seen in productivity, as well. Thus, when we take a look at the productivity rate of grapes, it is clear that the grapes don’t have a consistent nature. Table 3.55 Grape productivity, in quintals/ha
1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 11 115 42,5 45,5 100,5 84 86,5 93,5 94,5 Jalilabad 75,1 16,3 51,5 5,4 60 40,4 Masalli 63,8 47 47,4 32 33,1 19,3 21,7 78,4 9,4 8,1 Lankaran 13,9 40 55,4 40,1 41,7 8 37,8 28,6
Hence, the major aspects having effect on the crisis, which took place in the region’s vine-growing sector were the following: a sharp decrease in the size of production as a result
of the termination of economic relations of vine-processing units, and therefore, the emergence of market problems of vine producers, failure of the vine-processing institutions to develop their operations based on modern needs, and ceasing their operations fully, lack of resources for creating new vine-processing units, and the lack of interest on behalf of the investors for this sector. The limited amount of arable land area for sowing in the region requires the following for enhancing development of agricultural products: first of all, mechanization of farming, and intensifying farming and cattle-breeding based on following the agro technical rules. The implementation of these activities directly depends on beefing up the material and technical framework of production. Up to now, the technical equipment which were used by then- existing collective farms and state farm in early 90s, has been privatized. Even back then, more than half of that equipment were in need of repair. Currently, most of the privatized old technical agricultural resources have been fully fallen apart. We should take into account that the loading coefficient of these equipments is high, this leads to the increase in their maintenance expenses and, in many cases, to their crumbling. In recent years, the rural people in the region have been granted harvesters, plowing tractors on lease. However, this does not meet the needs of agricultural equipment. The low availability of agricultural equipment of farms in the region negatively affects the development of agricultural products. This, in particular, has to do with the shortage of the agricultural equipment, specific for the region. Hence, purchasing new specific equipment is needed in order to realize the agricultural potential of the economic region. And the solution of this problem requires a large sum of financial resources. On the one hand, the local business people can’t afford to purchase them, and on the other hand, there are limited opportunities for using debt instruments in this respect. The following two aspects needs to be focused on while assessing the possibilities of developing the production of agricultural products: first, the competitiveness level of these products in the market; second, development views of the processing units, which stimulate the development of local agricultural products. In accordance with the first aspect, in order to enhance the competitiveness of agricultural products both in local and international markets, it is necessary to improve their quality and decrease their cost prices. Sometimes, local products are not able to compete with the products, imported from abroad, in local markets. Therefore, taking into account the people’s financial means and the needs of the market, the state needs to regulate the import of agricultural products. It would be prudent to coordinate the activities to be implemented in this respect with the activities that envisage the regulation of prices in the market, and stimulation of improving the quality of the local producers’’ products, and enhancing productivity. The second aspect has to do with the need to establish new processing units, which stimulate local production. This would enable the full and effective implementation of the “production-procurement-initial processing-processing-sale” stages. It would also eliminate sparseness and uncertainty in realizing agricultural products. The favorable natural and climate conditions in Lankaran economic region have created broad opportunities for development of cattle-breeding, in addition to plant- growing. Since Lankaran economic region consists of sloping plains, foothills, mid- mountainous, and high mountainous zones, there are favorable conditions for development of cattle-breeding, along with growing plants. In recent years, the sustainable development of cattle-breeding has been ensured in the region. Hence, the number of livestock in the economic region increased 1.3 times in 2008,
compared to 1998. The number of cows and buffaloes increased 1.4 times, sheep and goats 1.3 times. Table 3.56 Main indicators of cattle-breeding in Lankaran economic region
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Number of livestock with 240879 245039 248170 257558 267228 277485 293783 299407 307286 312784 321070 big horns Out of which: number of cows 115426 116860 118199 122946 126930 133846 142470 145303 150383 153392 157393 and buffaloes Number of sheep 344123 350361 360637 381401 395821 406907 418694 424348 433284 442924 450280 and goats Number of pigs 137 179 135 194 527 283 146 376
The major cattle-breeding rayons of the region are Jalilabad and Masalli. Hence, Jalilabad and Masalli have constituted 51.7 percent of the total number of livestock in the region in 2008. Table 3.57 Number of the livestock in Lankaran economic region
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 22384 22512 23898 26766 30529 32256 38055 39748 41820 43134 44431 Jalilabad 91916 93105 94007 95123 96594 97127 97534 97884 98113 98373 98785 Lerik 33061 33293 33226 34106 34977 35331 35594 35958 36357 36688 37084 Lankaran 27316 28821 29514 30780 32975 37420 40695 41055 42411 42698 47285 Masalli 47439 47531 46896 49341 50097 52149 57841 60051 63478 66053 67131 Yardimli 18763 19777 20629 21442 22056 23202 24064 24711 25107 25838 26354 Lankaran 240879 245039 248170 257558 267228 277485 293783 299407 307286 312784 321070 economic region
The rayons of Jalilabad and Masalli constituted roughly 53.2 percent of the cows and buffaloes in the region in 2008. In 1998-2008, the highest increase has taken place in the rayons of Astara and Lankaran. During that period, the increase in these rayons has been 2.1 and 1.7 times, respectively. Table 3.58 Number of cows and buffaloes in Lankaran economic region
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 10636 10540 10824 12021 12780 14861 18396 19236 21329 21882 22521 Jalilabad 45527 45746 46435 46954 47918 48292 48746 49063 49247 49442 49581 Lerik 15054 15126 15255 15552 15977 16065 16186 16254 16391 16667 16696 Lankaran 12295 13045 13617 14230 14964 16827 18149 18191 18945 19060 21291 Masalli 22923 22990 22263 23722 24570 26593 29229 30607 32140 33490 34170 Yardimli 8991 9413 9805 10467 10721 11208 11764 11952 12331 12851 13134
Lankaran 115426 116860 118199 122946 126930 133846 142470 145303 150383 153392 157393 economic region
The number of sheep and goats in the region is relatively higher in rayons of Lerik and Jalilabad. In 2008, 56.5 percent of the sheep and goats were in these rayons. This has to do with the favorable conditions in these rayons.
Table 3.59 Number of sheep and goats in Lankaran economic region
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 9437 9709 11333 13732 17623 19096 23320 24384 26822 27754 28291 Jalilabad 112685 113516 115284 117099 119104 119474 120117 121163 121394 121617 122383 Lerik 116300 116116 116441 123219 124810 126278 127172 128516 129905 130533 131874 Lankaran 14599 14599 16765 18061 20187 22942 22354 19973 20194 19228 20607 Masalli 46262 47341 46571 51481 53300 56631 60127 64552 67481 71206 73840 Yardimli 44840 49080 54243 57809 60797 62486 65604 65760 67488 72586 73285 Lankaran 344123 350361 360637 381401 395821 406907 418694 424348 433284 442924 450280 economic region
In recent years, development of cattle-breeding has also led to the substantial increase in development of products in this sphere. Hence, the total size of slaughtered meat in 2008 increased 1.7 times compared to 1998. The other increases have been as follows: milk production – 1.4 times, egg production – 1.3 times, and wool production – 1.2 times. Table 3.60 Development of major cattle-breeding products in Lankaran economic region (in all categories of economy)
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Meat (slaughtered, 9231 9665 10304 11100 11745 12483 14070 14155 14806 15283 15468 total, in tons) Milk, in tons 113682 125251 130900 135892 136563 147940 149392 156945 159219 161676 163766 Eggs, in thsd 69352 71707 73848 76112 69192 68396 86037 87487 87958 88382 88847 Wool (physical 634 666 677 707 705 722 730 732 744 764 772 weight), in tons
Jalilabad leads the region in meat production. Hence, the share of this rayon in total meat production of the rayon was 33.2 percent in 2008. It is followed by the following rayons: Masalli – 17 percent, Lerik – 16.6 percent, and Lankaran – 15.2 percent. Table 3.61 Meat production in Lankaran economic region (in tons)
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 1012 1060 1064 990 1043 1214 1257 1296 1330 1384 1448 Jalilabad 2936 3074 3244 3601 4248 4383 5194 5099 5104 5122 5128 Lerik 1708 1788 1778 2020 1749 1837 1996 2046 2550 2571 2574 Lankaran 1338 1401 1532 1577 1381 1557 1931 2002 2090 2280 2356 Masalli 1964 2056 2144 2054 2263 2431 2444 2492 2501 2610 2636
Yardimli 273 286 542 858 1061 1061 1248 1220 1231 1316 1326 Lankaran 9231 9665 10304 11100 11745 12483 14070 14155 14806 15283 15468 economic region
The shares of Jalilabad and Masalli are higher in milk production in the region, as was the case with the number of cows and buffaloes. Hence, 56.9 percent of the produced milk in the region is acquired in these rayons. Table 3.62 Milk production in Lankaran economic region (in tons)
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 9802 11088 12739 11984 13324 14131 15215 16382 17182 17918 18620 Jalilabad 43198 50584 51604 53218 52683 53038 48974 48997 49031 49040 49061 Lerik 13481 12049 12638 12594 12351 13583 13691 13745 13748 13760 13768 Lankaran 13706 15880 16754 18118 16461 18307 21262 22298 23298 24235 25297 Masalli 24499 26208 27446 31804 32723 36894 38257 43524 43839 43942 44155 Yardimli 8996 9442 9719 8174 9021 11987 11993 11999 12121 12781 12865 Lankaran 113682 125251 130900 135892 136563 147940 149392 156945 159219 161676 163766 economic region
In 1998-2008, there has been a 1.3 times increase in the egg production in the region. This increase has mainly taken place due to the rayons of Yardimli, Jalilabad, and Masalli. As a whole, 69 percent of the egg production in the region took place in rayons of Masalli and Jalilabad in 2008. Table 3.63 Egg production in Lankaran economic region (in thsd)
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 7149 7392 5618 5712 5544 5245 5298 5351 5358 5363 5371 Jalilabad 12686 13117 15893 19389 17383 16435 18440 18457 18475 18493 18504 Lerik 3130 3236 4099 4509 4521 4078 4294 4345 4217 4385 4398 Lankaran 13149 13595 12915 10652 9080 10293 11905 12334 12858 12891 12994 Masalli 31504 32574 33151 33222 30533 30665 42000 42500 42550 42600 42780 Yardimli 1734 1793 2172 2628 2131 1680 4100 4500 4500 4650 4800 Lankaran 69352 71707 73848 76112 69192 68396 86037 87487 87958 88382 88847 economic region
In 1998-2008, while the number of sheep and goats increased 1.3 times, the wool production rose 1.2 times. Jalilabad and Lerik lead the region in wool production with their high results. This also has to do with the relatively more numbers of sheep and goats in those rayons. Table 3.64 Wool production in Lankaran economic region (in tons)
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Astara 14 15 15 18 21 26 27 23 15 17 18
Jalilabad 198 226 228 234 224 230 255 260 276 283 288 Lerik 230 226 225 230 229 232 219 219 220 221 222 Lankaran 22 26 26 31 32 34 36 36 36 37 37 Masalli 90 93 95 94 98 93 85 85 86 86 87 Yardimli 80 80 88 100 101 107 108 109 111 120 120 Lankaran 634 666 677 707 705 722 730 732 744 764 772 economic region
In general, the development rate of agricultural production in the economic region has been sufficiently high in recent years. However, the research shows that there exist further possibilities to enhance the size of developing agricultural products in the region. These possibilities are identified by both intensive and extensive factors. The analysis shows that the area of sowing fields can be increased through involving supplementary lands in the region. However, it should be taken into account that these areas are limited. On the other hand, it is possible to improve the productivity level of developing agriculture through following the agro technical rules in a timely manner, elimination of problems, such as the expensive costs of fertilizers and medical drugs (due to this reason, farmers can’t afford to purchase fertilizers and medical drugs). The analysis shows that it is also possible to enhance the size of production through improvement of the territorial units of agricultural production by rayons in the region, and having each rayon to specialize in development of agricultural products that ensure higher productivity rates.
Industry Industry plays an important role in social and economic development of any region. For development of industry and the improvement of its area units contributes to solving employment problems. Furthermore, establishment of the units, which contribute to processing agricultural raw materials, lead to development of this field. Also, the people’s need for agricultural products is satisfied, the inter-regional and intra-regional economic relations, as well as international economic relations are improved. Ultimately, the improvement of people’s living standards is achieved. In early 1990s, the disintegration of existing targeted relations between the Republics as a result of the breakdown of USSR, Armenia’s undeclared war against our country, problems emerging as a consequence of transition to market economy, have negatively affected the country’s economy, including the development of industry in Lankaran economic region.
The structure of social and economic indicators of in Lankaran economic region by territory (in percent)
Rayons by color: Astara, Jalilabad, Lerik, Masalli, Yardimli, and Lankaran Area, Population, Total Product Output
In 2008, the share of Lankaran economic region in the country’s industry products, equaled 0.14 percent. The economic region’s industry mainly consists of electric power, gas and water production and distribution, processing fields. There are units of developing mineral products in Lankaran and Lerik. The region is not that rich in mineral products. The region has the following non-ore materials: construction sand, clay, river stone, gypsum, and marble. The region’s light industry depends on processing local raw materials. The food industry, which relies on the processing of agricultural products, mainly meets the demands of local population and includes development of meat and dairy products, canned products, tea, alcoholic and non-alcoholic, and wood products.
Table 3.65 General indicators of industry in Lankaran economic region
Indicators 2000 2004 2005 2006 2007 2008 Size of products (in existing valid prices), thsd 6284 14299 18170 23513 34763 40348 AZN
Share in country indicators, in percent 0,17 0,24 0,2 0,15 0,15 0,14 Specific weight of non-public sector in size of - 80,1 70,2 50,4 54,8 49,7 industrial products, in percent Number of units 62 82 78 80 82 79 Average list number of industrial workers 2950 2628 3069 3098 3134 3500 Average monthly salary of workers, in AZN 26,1 45,9 63,3 83,3 142,3 175,8 Major production funds (balance value as of the 100,5 92,0 83,5 128,0 142,6 142,0 end of year), in mln AZN
As the table shows, the size of industrial products in the region has increased in recent years. This has been due to the economic reforms implemented in the coutnry under the conditions of political and financial stability in the country and the society’s adjustment to new market relations. Howeer, despite the increase tendencies in the industry of the economic region, there is still a critical situation in this field. The major reason of falling behind in Lankaran economic region’s industrial sector is due to the reason that the institutions established during the Soviet period have lost their posts as in the early years of our independence as a result of the crisis, and the disintegration of production and cooperation relations. Currently, the shortage of financial resources and the weak environment are the major reasons for not being able to normalize these institutions, establishing the mutual relations between these units under the modern period’s requirements, and further developing them. Despite the implementation of privatization in the region, the restoration of major production funds, which are both physically and morally outdated, of the privatized institutions has not been possible due to the reasons mentioned above. Let’s remark that, 6 small-size institutions have been privatized in 2000-2008. The analysis shows that although the development of products in majority of industrial institutions operating in 1990 has ceased, the industrial products in the region increaed roughly 6.4 times in 2000-2008. This has mainly been possible at the expense of light, food, electric power, gas and water production and distribution, as well as some processing industries. There has been a 19-percent increase in the number of employees working in industry in the region in 2000-2008. The number of industrial institutions has increased in the recent years. For instance, while 62 industrial institutions operated in Lankaran economic region in 2000, this indicator has increased by 27 percent, reaching 79 in 2008. The relatively more increase of product manufacturing compared to the number of institutions has also enhanced the average product manufacturing per institution. Nevertheless, the institutions oeprating in the region are oriented toward the internal market. This is mainly related to the following: the low level of development rate of local entrepreneurship for entering foreign markets and limitations in financial resources, low technical and economic tier of production, and limited opportunities for development of competitive products. In 2008, the average salary in industry constituted 175.8 AZN, which is roughly 6.7 times more than 2000. Let’s remark that this is 1.6 times lower than the national indicator. As the table data present, currently the food industry, production of non-metal mineral materials, some processing institutions and electric power, production and distribution of gas and water dominate in the economic region. In 2008, these fields have constituted 97.7 percent of the industrial products manufactured in the region. As the table data indicate, the structure of industrial development has not been consistent under the types of economic activity in 2000- 2008. This has to do with the small size of the industrial products. Hence, the relatively small changes in development of various products significantly affects the changes in industrial structure. Table 3.66 Territorial structure of industrial production in Lankaran economic region (in percent by total results)
2000 2004 2005 2006 2007 2008 Industry, total 100 100 100 100 100 100 Including Production of mineral matters (excluding energy 0 0,34 0,67 0,79 0,84 1,07 materials) Development of food products, including drinks 55,4 30,45 24,61 15,23 8,99 13,12 and tobacco Weaving and sewing industries 0,04 2,37 3,71 2,1 1,54 1,06 Leather, leather materials and shoe production 0 0 0,01 0 0 0 Wood processing and development of wood 0,2 0 0,54 0,28 0,3 0,22 materials Cellulose-paper production, publishing 0,34 0,13 0,23 0,26 0,16 0,17 Chemical industry 0 0 0 0 3,68 0 Production of rubber and plastic bulk materials 0 0 0,16 0,25 1,21 0,16 Production of other non-metal mineral materials 0,7 2,96 3,38 3,2 4,15 3,24 Production of matallurgic industry and ready 0 0 0,47 0,18 0,19 0,13 metal materials Producton of electricity, optic and electronic 0,1 0 0,01 0,03 0,02 0,02 equipment Other areas of processing industry 0,3 42,47 36,65 26,24 32,13 29,06 Production and distribution of electric power,gas 43 21,11 29,56 51,37 46,77 51,74 and water
Table 3.67 Number of institutions operating in Lankaran economic region by industrial areas
2000 2004 2005 2006 2007 2008 Astara 9 10 11 11 8 8 Jalilabad 3 8 8 8 7 8 Lerik 5 2 3 3 2 3 Lankaran 31 40 38 41 48 42 Masalli 13 21 17 16 16 16 Yardimli 1 1 1 1 1 2 Region (total) 62 82 78 80 82 79
As the table shows, the majority of industrial insitutions operating in Lankaran economic region, that is, 53 percent of them are based in rayon of Lankaran.