Varazdin Development and Entrepreneurship Agency
Azerbaija n s;: ;""i,f,Til:#|.j"",n ics (u N EC)
Facurty or rvr,nlJlu,,i;:tTlJ:lity or warsaw Facurty of [aw, Economics ano sociaiici"n.", sare - Mohammed V University in Rabat
Economic and sociaf Devefopment 37th Internationaf scientific conference on Economic and 50ciar Deveropment "socio Economic probrems _ of sustainanr. o"uJopment,,
Book of proceedings
Editors: Musfim lbrahimov, Ana Aleksic, Darko Dukic
I I I IJI.XOH *,il$t!1t4d * Baku, 14-15 February 2019 Varazdin Development and Entrepreneurship Agency in cooperation with Azerbaijan State University of Economics (UNEC) University North Fa c u I tv of La w,,." :il:'JHl H:fffiil:: : :t :'JI"i:Hil:11, " U n i ve rs ity i n Ra b a t Editors: Muslim tbrahimov, Ana Aleksic, Darko Dukic Economic and Social Development 37th International Scientific Conference gn Economic and Social Development _ "socio Economic-probfems of sustainafr. o.".r"pment,, tl ' t-,l Book of proceedings - Baku, L4-LS February 2019 37rh rntemationar Scienrinc [ffi::::ffiJ.,ilfr|,i:':iffn[H]:g$fiil:li"**dings), conference on Economic and sociar Deveropment- Editors r Muslim lbrahimov, Ana Aleksic, Darko Dukic scientific committee / Programski odbor r MariiT.9ilry1q University ofZagreb, croatia Adalat fl:|r"ilffttgHkffi;:i"rflffi1',T'ffit,y*';1;ffi}i"*"f;rf;fftate univ;;ty;irli,"#i.,@resident); Mrradov,Azerbaijan state university rur.mq: *,,9-u!r,_Ari Arirzayev, Sandra Raquer Arves -universirv a A.i;;:#;#,ffi'ffi',ll$?,'#;i",H',f universitv' Australia; Gouri Saniar"ia""i"i]p""n""''dai1i19" ild;"i,.,irv.; r.i uniu.irirv'.i'eril;.,^Rdu.ifb-*?[#rrliniijj'r,u,r*,i ,i!:;",lHfiinr,l,Fi,:,r"?i, Technologv' Kharaenur'.I.n!i"; sri'"b"ihiti.l"lttiu.i.u eiir;l"L"i"J.iry""r'oveiro,.portugar; Banerji, rndian rnsritute of unrversity' Russia; Leonid Ari";;&;r., K' Bobrov, state university The Lomonosov Moscow srare slovenia; Zeki Atl Burur, ookuz rvrur uJi,iJri, Tr.1n"ie."""*iJ."il,iJrJr.r*r, Novosibirslg Russia; Rz aor*'i!tr, i.'r.i'r "ul,iversitv - ronry, n"'"'-*;;;;;;d;,"":.,university ir.*;il:1?"ilT['el]#t|'.::ffi}11|]rrffi y!!?,1dfffJ*:y:1ruru;t,il,'jfigic;r'"* orNi,, 3.iuLu; oguz Demir, c.outiu;coia*u-iiuri,,u"11.T1veio,rj;li#;,,"di."T['!i34;],::xi?ffix"rJ##i*:::iffi;T:{i#il"J#d,,"J,"J,".:lrstanbur commerce Albania; Kseniia Dumicit' puur*nu-6ue-*inrtuyi,-s;;;;,u; 9.li"ti"tv- "i'i"iiu]*i?outiu; curmu n';'H'*'d'Tffi;y'am:;rut*:'ufi:',;,"rim:ffit#nx.'ni*m'u#td1.t'd,td?i;x.fffirT;ersity, Russia; Fran Galetic,2aseb Yadulla Hasanli' Azubaijan state;;;;r"']',v ;i;;"*; util:;g:HJf*r *rffi;;Anica Hunjet, n"i"*rrtv N..*,, p,ryf;ii,e*'1*:li'"Y;#:i'Jflr?li;;;;llT cxeii-[.-o,r#; a,'iu;fi;ff ,n'*,"J '+;ru;'s'# Koprivnic4 croatia; Musrum u,u.,,ity or Economics (LrNEc), Eastemur+#:**:f{'rLr;gm#rxlni-i;','p Medite'*,* ul::.j:g,f:q:ffi;riy,l,r,*4iir_r;#"#,:;il1;r.tit$fil,,[11," e"'"il.ryf,ry*l**}#d**{* Khalimova" Institute of I fillti,##hj3:!ff,t"tr;';;"rr;;i or Siberian eranJ,or rca.m.iCaopiiiir".."lr,ij#Jr'.fl$.4!,}:ti1fl#qineering i.ussi; d;d..ilii.i.n.., Novosibirsk, o,'nun Russia; Manna ruiovi,, u"i"'.i'.v,"r2""i,.,'e;;i;d H".?:;f;.,||::k""r:'j'J:fl.,:i:3fl:r, c,oatia; coian roli"., i,"i".^t,, No.tr,, rop,lunrcii.outiu; H{;8l;In;'iil:H1,tr;;,?,"ln-'*,.',1ilH-1,,1*l$:rqj.:Uifi,Ji;'dff$,# *t'=tfflirfftr* Vaidotas Matutis, Vilniur y;r:id"#lrtr*rA*ft *lfr,y$'J,i'#$y,1Tl;Ii:Ttr:ffi1?J*fl,yrff:rxf,yfr?#iill$_:#:,,"rr*t;i{iffi!r",wl#$,f*#*q-1;$i{1 Croaria; Dinko prirnorac, Univerrity Noifij K;;;j;;i 111y'*tv oii.*"*i.''rLnvecr, L;;;; #i;:i:ft i;1ifr.:ii,ti.l1#"ii.y,,,*X_[*H:",X*yf.Xruitr.i*":,t*U rr,,r'. ei.ik;,;, uio,+,u,u.no ii!:Uff:i:rjxJil:rt};l,::r:"*1ix#;""ax;#*#$.$T#rT'i'-,r Ribeiro, univlrsi,v or Joanna srawsk4 universiry r-"i,, p"r""aleiiii,il,s,,,,;ii+;ril;tilf:ffr.iii:,il15"i1,, "r w*;ffiilifru?;,fn::n_:#fi:H:1, ilfl:!tlq:iliJ.",'#f*i,*'$',:l"t 3'h:T,u*'#,1 ',T;#Jft,"u:;=i,v "r iry rutore, Universityorwapres ffiilil"ili'#j'":r"Tlli':atm"1;x#a"':,,;..,"l#:,1.:l#*lYe4fildi,;?jf,:nitl.'':!lii:mm',wS:l waterloo' canada; drineirzzinoint.rr"*'iii,*.rrtr, of r..r,nJory;;;i;;,,;;;;." aZivkovic,universrty orN;lsft-#traio"#'"'1"ittltl'.)iur; Review Committee / Recen_zentski Odbor I Marina,Klacmer^Ca]oqa_(president.); Ana Aleksic; Sandra Raquel Alves; Ayuba Aminu; Mihovrl ff#flqiil"^,,1,1Htil16t;:6m;'l***,ry,#.iffi;tfuf;*,n:;1";;jlr*rirr^"ii,.v".*,..,,v,r,,uroban; Anita Goltnik umaut; romisrav Hercl;; fi;ffi;d'r"1,1'i,liiil;'r'j:li'l'::l:';:,'T1-F':,,:^,.'.TT cateric;Mirjana cruirjr'-i"rii,* cr;*,o*iJir,i,irv','J.',.';K"1ilfi;i.,X1?,;'j:lfsirfr$:,:'"''Tffil##tt:ffii;titrff'r**r,t##.ilffintnTatjana Kovac; Vladimir K< arta oLaoic; zgt5o cl;i;6;;; rgor. pilir; Nful. p"J.ie, riilil;; affii;t.o,eru* Noja; 2,,"1,.i", Roska; souhairasaid:ainandoivi.'s*.n.l,bi-; V;?'$i,"ffiIffft"J;c.ffa:e; ri.i"t, Studzieniecki; i5'i,ruus..rui;;;i;;kffi;ilX?JJli:illilffiliilx;*trbr.Tfin'f;'$#:J#g Lejla Tijanic Boris zimon; snezanazi;k"il;;.:ffiTt#ft1', rusek; n.uJ" ill"ii. iffi;; iil; vr"*r.l ii,.,n"r"#,il;;#." wirtine; rao zeng; Grzegorz organizing committee / organizacijski odbor I Ad{at fl}rad9v (president); Domagoj.cingura (co-president);. Sannur Aliyev; Shafa Alizaoe; Milil'x5'iffi:ffn;t;it,mtm'llxntlriiufl;l#i#"*ril,iil,u$:fiTlt?-?'fl:5"# ak;zahidMammad.v; Publishing Eclitor I Domagoj Cingula Agen cv,yarazdin,croatia/ ffidlE-3,:1T#rf,'lf;,"ilb'il"*:1:txllff*"'l*reneurship Azerbaiian state university of Economics Economics and soct S;;;n... Universitv porand sur. - luror,u,n,,^."0"v',i;ft:Jff:f i:;:l'flr;r:y#*ement "iw.'-'"", #arsaw, / Faculty orlaw, Prinring r 100 CD rssN 1849_6903 The Book_ is open access and double_blind peer reviewed. 3il1ffJ'".Tliff#l'ffl,#S.1{ffiil',X,?"1',x3f,.,-l'r",H"*iif^l,lylil::l*X*::j#abases and ava'abre ror downroad in apDF rormat state universirv orEconomics uconomics&ililfiT-q{irfi,$ii:'.',il3i,xL!it't'"-l"i ii:xi# Iirtr#r;ffiil,ij*^.!"'i"n (Lr.,rEC), Baku, and social Sciences Sale - u"r,ri"'.o-i ror"na; and technical uoiu..,iiy in nauailirro.oc;]i:::9,r".:r}j::1t ni.uitv-;ffi#, accuracy oftheir tonttitution.. auiil"i, ,k:?y'e responsible lrii,trrlr."pyrighs for further publishine. r"r rn6 r*gJrii. tl THE ASPECTS OF ECONOMIC SECURITY: BUDGET, TAX AND MONETARY 391 Farida Shamil Amirova THE EVALUATION OF SMALL AND MEDIUM ENTERPRISES ROLE IN ECONOMIC DEVELOPMENT OF AZERBAIJAN...... ,.,,...397 Fariz Ahmadov, Jabnayil Valiyev DUTCH DISEASE: HOW TO MITIGAT.E ITS EFFECTS ...... 409 Aliagha Gasimov, Salman Najafov THE IDENTIFICATION OF POLES OF COMPETITIVENESS OF THE ECONOMY THROUGH INTER-REGIONAL COOPERATIqN ...... 413 Gulanbar Azizova, Anna Kulik, Anna Kogteva, Aleksandr Stryabkov, Gulnara Mikayilzade TIIE ROLE OF' A FINANCIAL ACCOUNTING IN ENSURING ECONOMIC SECURITY OF AII ENTERPRISE...... 420 Hafis Hajiyev THE IMPACT OF GOVERNMENT EDUCATION EXPENDITURES ON ECONOMIC GROWTH: EVIDINCE FROM AZERBAIJAN...... 426 Shahriyar Mukhtarov, Ilkin Mammadov, Hamid Hamidov STRUCTURAL ANALYSIS OF NON.OIL SECTOR FIELDS IN THE REGIONS OF THE REPUBLIC OF AZERBAIJAN 435 : IlhanaMahamadnabi Mahmudova INNOVATIVE PROCESSES AS A FACTOR OF ECONOMIC DEVELOPMENT...444 fhbnlarzadeh . $arvinaz.M.rI NEW HUMAN.MACHINE RELATIONS REQUEST A NEW PARADIGM: UNDERSTANDING ARTIFICIAL INTELLIGENCE ...... 451 Jolan Velencei AUDIT AS A KEY TOOL FOR BUSINESS KNOWLEDGE MANAGEMENT SYSTEM R8S8ARCH...... i...... 459 ! Kashirskaya Lyudmila, Sitnov Alexey, Abbasova Sevinj FEATURES OF A$ITRACTING FOREIGN DIRECT INVESTMENT TO THE INDUSTRY OF AZERBAIJAN ...... 469 Lala Hamidova i ORGANIZATION OF THE EFF.ECTIVE MECHANISM OF INDIVIDUAL INCOME i rAxATroN ...... 47s Leyla Mehdiyeva ' SOME ASPECTS OF OUTSOURCING AS A FACTOR OF EFF'ECTIVE ', DEVELOPMENT OF THE ORGANIZATION...... 484 ,', Leyla Mamedova EVALUATION OF TANAP AND TAP PROJECTS EFFICIENCY...... 491 Zeynal Agazadeh, Kamran Jannatli Development 37th International Scientific Conference on Economic and Social - 14-15 February 2019 ,,50cio Economic Problems of Sustainable Development" - Baku, IN THE STRUCTT]RAL ANALYSIS OF NON.OIL SECTOR FIELDS REGIONSoFTI{EREPUBLICoFAZERBAIJAN Ilhama Mahamadnabi Mahmudova of Economy" of Azerbaijan State Associate Professor of the department of " Regulation Univ er s itY of E c onomi c s (UN EC) a-murqd97@mail'ru ABSTRACT of Azerbaijay to- the post-oil stage As a result of the transition of the economy of the Republic with the socio-economic in modern conditioti, its future developmeit is largely connected of the non-oil sector development development of the regions. In its' turn', the great pitentiot on the regions of the country' At and socio-economic frrebp*rnt of ou*ouitry are focused being a leading power in the present, the regions of Aze,rbaijan are on th'e thrishotd of The and diversification of development of the noiionoi economy of our country. .development generally create tle the country's the non-oil sector in the regions of ,l.zeibatian will lasf f9r increase the level of employment in economy in order to reduie dependence on oil ,evinurt, conception. The sl4/or analysis the country and its transition io the sustainable development of the regions based on con*ete i7 tt , suitainable, cimpetitive and diversified conditions basis of priorities of the non-oil materials have been revealed, evaluated oid orrrrred on the and diversification of the non- sector in the regions. over the past I5 years, the development -been programs oil sector in the regions has implemented on three regional development support was provided the adopted in the country. For this purporu, large financial for state budget, as well as other d.evelopment of the non-oil sector in th'e regions"frim the from subsidies' Sustainable Sources, extensive tax, customi, loan concessions and financial of economic and social indicators' development in the regions caused to the consistent growth the one hand, and improving level of balanceQ developmenl of the balancing growth rati, on the adoption of "strategic Road develolrnent on the oth;r hand. raniig"into consideration, provide the Map on Major Sictors of th1 Nitional Economy and economy" will of social well-being of the economy on competitiveness, inclusiveneis andfurther improvement sustainable economic development of the the basis of national economic ievelopment and the development of targeted regions. The directlins of improvingthi conceptualframeworkfor being developed on the basis of structural stqte programs in different spheresind directiint oi, a result of the caruied out research' analysis of non-oil fi.elds in the regions of Azerbaiian. As of the non- ,prii7, pioposals ind rrro**rniotions have been putforwardfor the development potential in the regions of oil sector, diversification and stimulation of inueasing export Azerbaiian s c at i on, o s e ct or, s us t ainabl e dev el opm ent, div er ifi Keyw or ds : s trutur al analY s i s, r e gi ons, non- il national ec onomY, tr ansition, regulation, exPort l.INTRODUCTION including the economic An effective and sustainable development of the economic structure' of the national economy' It structure of the regions, is essential ior the balanced development Western Erropean countries in should be taken into account that the grdbt progress made by of the country and the economic growth is linked to the ,rrr".rrfiil in the structure "huttg"t to the production ;;;ifu .irro*y, because these changes have givin the overall dynamism social division of process in the country and has led to some other positive changes. Generally, of the economy is formed' It is labor is a continuous'pro."rr, where the main branch structure by the affect of scientific- complex and dynamic, subject to quantitative and qualitative changes other factors' technical progiess, cyclicai development of the economy and 435 37th International Scientific Conference on Economic and Social Development - "Socio Economic Problems ofSustainable Development" - Baku, 14-15 February 2019 On such a basis it is worth mentioning that the regional structure of the economy is considered in two aspects: r Placment of economic fields in the territory of the country; o region system with its internal structures in the tenitory of the republic. It should be specially mentioned another issue that the formation of an efficient regional economic system depends primarily on the efficient use of all available natural and socioeconomic resources in the region. All-this happens on the same ground that national economies are constantly changing and exposed to transformation processes. The strongest effect on the processes is the scientific-technical progress. Scientific and technical progress changes the character of production, creates new economic fields and spheres, and affects the For this reason, the structure of the character of mutual relations in the national econony.-in national economy is constantly changing, which, turn, implies continuing structural monitoring and the need to compare the real economic structure with its future development perspectives. The structure ofthe specific national economy is shaped by the influence of many factors: geographical, cultural, social, economic. It should be noted that one of the most importanttasks forthe regions is to achieve mutual development of economic fields, production and social infrasfucture, complex solution of social and economic development issues. Territory of each region is the most important ground and a condition for productive forces deployment, as well as for the creation and functioning of production areas using mineral and raw materials, labor and natural resources. 2. THE REASONS FOR THE PROBLEM OF NON-OIL SECTOR DEVELOPMENT IN THE REPUBLIC OF AZERBAIJAN The Azerbaijani economy has been under the strong influence of the oil factor for almost two centuries. It is known that most of the national production of the country, including the products exported from the country, is made up of oil and oil products. This situation necessitates the increas€ in the overall weight of export products produced in the country at the same time the share ofcither industries in the total weight of export products. Therefore, the modern economic policy of the Republic. of Azerbaijan is primarily aimed at diversifying the economy, reducing dependence on the oil sector, and achieving dynamic development of the non-oil sector. According to the State Statistics Committee of Azerbaijan, 92.7% of the exported products are exportion of oil and oil products. At the same time, 75o/o of all industrial products produced in the country is on the account of state budget and 50Yo is on thb account of oil sector. [5]. According to UNCTAD estimates, Azerbaijan's economy is ilmong the countries with dependence on energy resources 191.93% of state budget funds come from the capital city and 7o/o come from regions l5]. That's why when analyzing the structure of the economy of Azerbaijanin the main"economic spheres, assessments are generally carried out on the basis of the division of the economy into two important sectors.I oil sector and II non-oil sector. The reason for such a situation was inherited from the Russian Empire and Soviet era. Azerba4ani economy has developed disproportionally on fields and regions [a]. The solution of elimination of issues of these problems, in parallel, brought about the simultaneous solution of these two problems. These are the issues of eliminating the inter-regional and inter-sectoral disproporsional development levels in the r.rational economy. The radical changes taking place in the socio-political and socio-economic life of the Republic of Azerbaijan during the years of independence also covered the economy of the regions of the republic. It was accompanied by quality changes in the economy of the country, including the regions during transition to the market economy. However, not all of these issues were resolved immediately. The most serious problem was that most of the country's industrial potential was mainly concentrated in Baku, and then partly in Sumgayit, Ganja and Mingachevir, 436 37th International Scientific Conference on Economic and Social Development - "Socio Economic Problems ofSustainable Development" - Baku, 14-15 February 2019 Such a situation creates a serious impediment to the development of the national economy as a whole and to regional aspects. As a result of Armenian aggression, the problems were aggravated by the destruction of the cities and villages of the republic, the occupation of those territories, the deportation of the Azerbaijanis and the damage to the national economy. Azerbaijani economy Oil sector (main fields) Non-oil sector (main fields) ti""'"" """'--"i --"1 uii ;"'li'-""^j $l : i"; I O ft:i ;$;-i lqi e E $ i ili $ { IT C! $ fi ; $$ ssu!1 i *-uiLA= { ii=iiio$ i E $$ H $ i i $$ E & I 1 .9 $; a $ ntE T E $$ F $ i t .5 $$ G { { .v :l i S i; E $Z E - *f i i: i ; " ir ; { **_*,._._.._i i .l I "---i i I __._.i Source: Made by author. '__* Under such conditions, there is a need to identify the current economic development opportunities of the Azerbaijani economy, weak and strong sides, challenges and threats to develop the country's economy, including the non-oil sector of the regional economy. 'able I: SWOT analysis of modern state of Azerbaiiani econom Stron!Bides Macroeconomic . Availability of mineral resources . Specializedworkforce; . High level edication . Political stability . GDP growth rate at high pace . Sectoral and Regional - Having a favorable natural climate and fertile geographical position in agriculture and livestock areas. - Having a natural, historical and cultural wealth that benefits the development of towism. - Fetile condition for the production ofagrarian and livestock products as a raw material for the food industry. Weak sides weak development of the processing industry in the non-oil sector; Low level of rural income; Market limitations; absence of direct access to EU, US, Japanese markets: Opportunities The possibility of using oil revenues in other areas; Production of competitive products with' the. application of modem technologies; The development of the economy by attractine investments Dangers Oil price decline; Economic crisis Financial crisis Decrease in competitiveness of Azerbaijani products decrease in the level of life of the country's population Source: Made by author 437 s 37th International scientific conference on Economic and social Development - Economic "socio Problems ofSustainable Development,,- Baku, 14-15 Februarv 2019 As seen' in the context of the crrrent state of the economy of the republic it is required to diversified development of the economy of Azerbaijan in certain directions: o Diversification of GDP should be based on non-oil sector; o Diversification of export should be based on the export of innovative products; o Diversification of institutional security should be based on natural, physicat, human and institutional capital; r The process of diversifying the regional economy should be further deepened, and the potential for disproportionation between oil and non-oil sectors should be sought in the regional economy. Accordingly, should it be noted that the main trends of the "Azerbaijut2020: Look Into the Future, Concept of Development" include the non-oll sector, in particuiar, has been specifically identified as one of the strategic aspects of the non-oil sector development of the regional economy. 3. THE REASON F'OR THE NECESSITY OF THE DEVELOPMENT OF THE NON- OIL SECTOR IN THE REGIONAL ECONOMY The tenitory of the Republic of Azerbaijan is currently divided into the following economic regions. Absheron economic region; Aran economic region; Highland Shirvan region; economic Guba-Khachmaz economic region; Lankarari .conornic region; Nakhchivan Autonomous Republic; Shaki-Zagatala economic region; Upper Karabakli economic region; Kalbaj ar-Lachin economic re gion. Figure 2: Categorization of the Re tgthe level of development Weakly developed Depressive regions Developed regions Developed regions regions Lankaran, Shaki- Nakhchivan Nogorna Karabakh, Zagatala, Absheron, Aran, Autonomous Kalbajar, [achin Mountainous Ganja-Gazakh Republic, Guba- economic regi6ns Shirvan economic economic Khachmaz regions economic regions Source: made by author. Based on the assessment of the current state of the regions of the Republic of Azerbaijan, they can be divided into the following categories: r Developed regions - Absheron, Aran,banj r a-Gazak 438 37th International Scientific Conference on Economic and Social Development - "Socio Economic Problems ofSustainable Development" - Baku, 14-15 February 2019 It should be noted once again that special attention was paid to the non-oil sector development in the Republic of Azerbaijan since the early 2000s. The goal here is to further develop the national economy in the context of eliminating economic issues and interregional disproportions in the republic. In order to achieve these goals, many programs have been developed and implemented, containing the strategic priorities of the state policy in the Republic of Azerbaijan. Accordingly, it would be expedient to make assessments on the non- oil sector development issues in the regions of the Republic of Azerbujan within the State Program. ' 4. SOLUTION DIRECTIONS OF NON-OIL SECTOR DEVELOPMENT ISSUES IN THE REGIONS OF THE REPUBLIC OF AZERBAIJAN WITHIN STATE PROGRAMS . Many State-funded State Programs have been developed and implemented to ensure macroeconomic balance and sustainable development in the early years of independenceThe following State Programs rnay be specially mentioned for the sample: [6]: o State Program for the Support of Small and Medium Entrepreneurship in the Republic of Azerbaqart" (1 9 9 7 - 2 0 0 0)" ; o State Program for Development of Small and Medium Entrepreneurship in the Republic of Azerb uj an (20 02 -20 0 5)" ; o "State Program for the Development of Machine Building industry in the Republic of Azerb aij an (20 02 -20 0 5)" ; . "State Program of Agrarion Sector in the Republic of Azerbaij an (2002-2006)"; o "Demographic development conception of AzerbaijanRepublic"; o " State Program on Tourism Development in the Republic of Azerbaij anin2002-2005"; o " State Program on Poverty Reduction and Economic Development in the Republic of Azerbaij an (20 03 -200 5)" ; .. ':, $tate programs of socio-economic development of the regions of the Republic of Azet\ujan (2004-2018)" (I State Program 2004-2008; II State Program 2009-2013; III State Progr am 20 | 4 -20 I 8). o On March 16,2016, according to the decree of the President of the Republic of Azerbaijan, 12 strategic roadmaps on the national economy and 11 sectors of the economy can be elaborated on the approval of the "Main Directions of the Strategic Road Map on Major Sectors of the National Economy and Economy" [1]. The above-mentioned State Programs generally reflect the regional development aspects of the non-oil sector of the national economy. The main objective of the regional development strategy, developed and successfully implemented in the Republic of Azerbaijan, is to restore the balance between regional and economic development levels effectively using oil and gas revenues and to achieve a number of socio-economic problems.' The problem of development of the non-oil sector, which has more prospects for development in the regions of the republic, has been raised. From this point of view, it should be noted that the main objective of thi State Program on Socio-Economic Deveiopment of the Republic of Azerbaijan (2004-2009), approved by the Decree of the President of the Republic of Azerbaijan dated on February I 1, 2004, is the sustainable development of the non-oil sector, provision of balanced development of the regions of the country, improvement of communal services and social infrastruciure in the regions, employment, living standards, etc. Within the framework of implementation of the program, the following results are considered in 2004-2008. In the first regional development program, the provisions of the Optimization of the Specialization in the Republic of Azerbaijan and the deployment of productive forces were reflected.714 state measures were implemented on this basis 668 events were dedicated to socio-economic development of nine resions of the 439 Development 37th lnternational Scientific Conference on Economic and Social - Development" - Baku' 14-15 February 2019 "Socio Economic Problems ofSustainable implementation of important Republic of Azerbaijan. Funds y-.te allocated for the of a number of relevant measures' the infrastructure projects. As a result of the implementation the country's territory and the package of projects for the balancing of tire development of formed' At this stage 2664t new development of the non-oil sector in the regions was - permanent jobs were created [2]' Then' enterprises were open ed, 547600jobs were created the Regions of the Republic of the State Program on Socio-Economic Developmettt of the president of the Republic of Azerbaijan for 2009-2013 was approved by the Decree of of the measures taken since 2004' As Azerbaijan No g0 of epril 14, z}bb for the lontinuation on Socio-Economic a result of the successful implementation of the "state Program in 2009 -2013", a high level of Development of the Regions of the Republic of Azerbaijan and successful results have been macroeconomic indicators has been achieved in the country populalion in socio-economic development' achieved in i-prorirrjthe living standards of the development of cities and More than 240 decreJs were siined on accelerating socioeconomic of both state economic districts incruded in an economic regions dwing implementation programs sector was programs inthe Republic of Azerblijan. Execution of these f9ltlt^19"-oil (2009-20t3) envisaged the 2.6 times higher in this sector [10]. The Second State Program social and market infrastructure developmerriof tn ugrarianr.rto, of *tt country, production, structures of the national in regions, and the eftination of unemploy*.niitr specific territorial of which 968 were covered economy. At this stage rooo large-scale projects were implemented, Baku and the surrounding districts by economic regioni. The remaining a0 piojects co.r.red program's implementation of 1066 measures throughout [g]. The State Action Plan .nuirug.r 40 in Baku and 968 in economic regions' the country, including 58 of the country's slgnincance, result of carried out measures, the which have been fuliy realized in the currlnt period. As a with continuous energy and drinking regions of the n f"uri" of Azerbaijan were provided roads and other infrastructure water. At the sarie time, construciion and rehabilitation of have been significantly facilities were carried out. Environmental conditions in the regions health and tourism' improved, and many social objects have been put into use in education, jobs within the program enterprises, 117,000 new jobs and 9j,000 new were created . enly 1,400 360,000 jobs in21l2.Totally 20,00b new enterprir., *.r. created in Azerbaijan in 2009 and by 6%'For the next four were created in the;egions. unemployment reduced by S'2Yo,poverty the Regions of the Republic of yeafs, the State frogr"am on Socio-Economic Development of Republic of Azerbaijan Ilham Azerbaijan for 2014-2018 was approved by President of the Prograrn was prepared by Aliyev,s Decree of February zl,zblq,The initial version of the State by the reievant the Ministry of Economic Development in line with the offers submitted basis of an official appeal submitted agencies to the Ministry of Economic Development on the program on socio- to local and central executive authorities in- Septemb er 2012; The state Accordingly, it would economic developrnent of the next regions will be adopted tn2019 [11]' sector in the regions of the Republic be expedient to revi,ew some of the pr6."rr", in the non-oil over the last 15 Years' 5.REGIONALASPECTSoFCHANGESANDPROCESSESINTHENoN-oIL SECTOR OF THE AZERBAIJANI ECONOMY country are the deveiopment The main priorities in the development of the non-oil sector in the particular, altemative energy of the agrariansector in ICT, tourism, transport and energy (in over the iast 15 production).44%of the population of tn. Republic operates in these areas. been invested in the non-oil sector vears. 600/o ofl00 billion investment in the country hai [7]' Table following on the next Page 440 37th International Scientific Conference on Economic and Social Development - "Socio Economic Problems of Sustainable Development" - Baku, 14-15 February 2019 'able 2: Investments in main capitalal on otil and non-otlil sectors Inc ludine Years Oil sec OI Non-oil sector Total Total Special Total Special weieht % weisht % 2003 3786366.7 2771092.1 t.0t5274.6 26.8 2004 4922755.9 3.70813 84 | ).J 1.214617 .5 24.7 2005 5.769876.3 37 56167 .6 65.2 2.0t3708.7 34.8 2006 6234483.7 3408s 12,5 54.7 2825971.2 45.3 A1 2007 7.471.189.9 3.529.865.3 ') 3.941324.6 52.8 2008 9.944.153.8 2922.414.7 29.4 7 .021739.1 70.6 2009 7.724944.8 2.058349.8 26.6 566595.0 73.4 20 0 9.905665.8 29584901.7 29-9 6.947.174.1 76.1 20 I 12799061,3 3070236,0 24.0 9728825,3 76,0 75n 20 2 15407274.4 3854.477.8 25.0 11.ss2796.6 20 J 17.850.815.7 5.094617.8 28.5 12756197,9 71 .5 20 4 17.618.601.1 5.959.403.1 33.8 11.659.198.0 66.2. 20 5 15.9s7028.2 7.t37.136.8 44.1 8.819.819.4 55.3 20 6 rs.772',725.0 8648028.6 54.8 71t24797.2 4\) 20 7 17.430.339.5 843.9s0.6 48.7 8946.388.9 Sour ce : https : //www. st at. gov. az. As seen from the table, In the last 15 years, more exactly, since 2ll3,investments in the main capital ofboth sectors of the Azerbaijani economy have grown almost every year. Stafiing from 2007, non-oil capital investrnent in capital investments has become more than the oil sector. Such a trend is still going on. This means that productivity in the non-oil sector can be solved by solving the problems of economic development. At the same time, it should be noted that, as a result of the state programs implemented in the last 15 years, the country's gross domestic .produg! increased by 0.1 percent to 70135.1 million manat in2017 . The most important point is that 6Z.gW of the GDP was produced in the non-oil sectors of the economy and37.2o/o in the oil and gas sector. During this period, the value added in the oil sector of the economy decreased by 5.0 percent, in the non-oil sector - by 2.7 percent, including transport and warehousing - by 8.5 percent, information and communications - by 6.6 percent, 59% in catering, 4.2% in agriculture, forestry and fishing, trade; 2.5 per cent in the field of.repair of vehicles, 1.5 per cent in social and other services. At the same time, production of non-oil products increased by 3.7 percent compared to the same period of the previous year, and added value added in this area rose by 3.8 percent. 40.1 percent industrial production of GDP, 10.4 percent in trade and transport, 9.5 percent in construction, 6.8 percent in transport and storage, 5.6 percent in agriculture, forestry and fishing,2.3 percent the share of tourists and public catering, 1.6 per cent for information and communication, and 16.4 per cent for other sectors, while net taxes on product and import accounted for 7.3 per cent of GDP [12]. Naturally, special attention was paid to the regional aspects of non-oil sector development in the republic. On such a basis, it should be taken into account that in the contemporary period, the regional structure of the economy of the Republic of Azerbaijan is assessed in the context of the analysis of key indicators of economic regions by sectors. The regional structure cjf the republic's economy has grown to some extent about a century of historical development. During these years, the main driving force of.the process was the solution of the problem of economic zoting of the country. From the 20s to the 90s of the XX century, the concept of regional govemance was first developed based on Soviet management requirements, then new established, young and independent economic management requirements and criteria of the Republic of Azerbaijan. The development of non-oil production sphere has become a priority for the creation of new jobs in this concept, in particular, in order to make the country more efficient use of regional 441. 37th International Scientific Conference on Economic and Social Development - "Socio Economic Problems ofSustainable Development,'- Baku, 14-15 Februarv 2019 resources. The intensive stage of the implementation of this approach is intensified even during the implementation of regional development concepts. The opinion is confirmed by the quantitative indicator of newly opened enterprises in the Republic of Azerbaijan, including in the regions in2003-2017 (see Table 3.) Table 3: Information about newly opened enterprises (on years) 0lk* tizr+ c*mi, n AgE1 5$1ft $33 5"14t tld0J s314 43$$ sl s4$ g'tts t[$tl$dsn tlr ) rslg sc$6 80'lt 11SS,1 :ilri::i:lilli:: ;isu{i w$ $tiiAi dFu{ $:[:$$ s$s$ ;lii:. i; sw iiii:iiii: leglg,ilfsr ilrrs aflmi, 2fl05 21$CI cs$tl rEs'l drril I is$t r68fl t 97f1 216$ $5$fi 4{.i{ ?$.s3 ?$?3 5094 : rilfi&dsn irri,rr;rr:ll 320 I iffif,i riffi tuft 3qi .r.*i, *$gl ,fff. ss0 $s$. gr5"l isflepQ*?.[n{; sT1 *$s ffi$ 4S{ FF7 t?fl gr{ s[$ 55? DJ' s$s 3{.S $Ifi i+4, 1ss lilst: t'tf: it*.$ .14$ i=*r s4s 'r 3os Il liil'Il;i rl:rii::: ;::.I'l "sr,$kNHn ;0n t04 lSS 465 f15 1?$ ??$ ?s8 cuu s$1 sa? s?$ f;$s ,* {* ;I :iil:.{lii$liiil m ::i::iii. ;i{ .1 tl* fs0 1f7 10$ .tsSS :NPtlt g$$' ear ,!s i:iill ..:rr.i:s }' 9S qrflfi -t4A $$t 4SS sxg g4& sl4 4ry $t? ss8 g€r 1lr? f44 91? ;ll ,*.1 -it.iie -:- 11 Il tii) :l fiR: {A6: ii$tt: ,t{$ 0r'\ r ,178 ts w$ ';rillaii: {JA: "'i, ;ri:;l::.: ti1$; 'S$tt' ll (alboew-l-up* sl 43 31 a3 s iJ 123 *I ;l*;iii:.;l!:!!: :F#.i: :::t: T*-in : gn t:: : i.j 15. li{ffi su: 144 $$s d+iA rl:! f,lilqlr/fift i{Db 3*S 36H ?10 F8 4$ s7 {* ?r {0 s{ {s sff r,i Source: Regional development: results of successful policy//Ministry of Economy of the Repub I i c of Az er b aij an//http s : //www. e c onomy. gov. az/ 37 479 new enterprises were launched in the regions of the Republic of Azerbatjan in the process of implementation of the State Program on the development of the regions, the old entirprises are modernized with the new equipment. 6. RESULT Non-oil sectors in the regions of the Republic of Azerbaijan: Production and processing of, agricultural products (non-oil, food, light industry, food industry , agrarianindustry), are carried out in the directions of especially non-oil; construction industry enterprises; construction of objects of socio-economic infrastructure (roads, housing, education, cultural-educational, healthcare etc.); in some areas. All thege measures, in parallel,' onpe again confirm the development of human capital in the republic and the social orientation of state policy. LITERATURE: 1. Strategical Road Map on national economy perpestive of the Republic of Azerbaijan ll https.llazertag. 2. State Statistical committee of Azerbaijan Republic lhttp:,llwwwstatgovlaz 442 37th lnternational Scientific Conference on Economic and Social Development - "Socio Economic Problems ofSustainable Development" - Baku, 14-15 February 2019 3, Regional development: results of successful policy/Avlinistry of Economy of the Republic of Azerbaij anllhttps://www.economy. g ov.Ml 4. Aliyev Sh.T. The importance of the use of new economic instruments in the economy of Azerbaijan// National interests: priorities and security .2009. Ng12. URL: htps://cyberleninka.nr/articlelnJvazhnost-primeneniya-novyh-ekonomicheskih- instrumentov-v-ekonomike-azerb ay dzhana (the date of appeals : 12.27'20I 8). 5. Gadjiyev, Muzaffarli (Imanov) N., Mamedov R., Nabiyeva S. Economic Transformation in Azerbaijan: Achievements and Problems'// Caucasus and Globalization. 2008. Ns4. URL: . https://cyberleninka.rularticleln/ekonomicheskaya-transformatsiya-v-azerbaydzhane- dostizheniya-i-problemy (the date of appeals : 1212912018). 6. GadjiyevaN.G. The role of program-target management methods in the implementation of the potential of the regions of Azerbaijan // Scienfific thought of the Caucasus, 2013 Ns3, p.72-77 7. Hnr.yrou Sh.R. Non-oil sector as a competitive factor for economic development of Azerbaijan. Russian Entrepreneurship, No. 13 (259) I luly 2014, p.93-101 8. Ilham Aliyev. "The state program of socio-economic development of the regions will be implemented" February 13, 2013, BAKU // INEWS.AZ. fElectronic resource]. URL: http :// 1 news.azlchronicle. 9. LiNCTAD WorldlnvestmentReport2}}T,P 87 1 0. https :i/www .stat.gov .azlsourcelregions/en/p3 .pdf 11. https: llfinans.azlxeberlgelen-ilin-ewelinde-novbeti-regions-social- intemational-interna tional-dovlet-pro gram 1 2. https: /iwww.stat .gov.az 443 I I HITON AII'il:AINf, I =- t -{. ^lrsvEUatLr!TE ',EY€R I I n J*t IJntu ies&{ b lr*kiis rh4{rl$r f,iirxprrw [d.l idlljs t ii$&€ {iltd i {{,.{ 9.cJ I c &{14 0J, [ccu{16 dcrlclencer iwicliauer Cc ues €l to€[o]€$-sol$