Petroleum-fuelled public investment in Azerbaijan: Implications for competitiveness and employment
Introduction The level of annual public investment has expanded more rapidly in Azerbaijan than in any other CIS state, rising by over 100 per cent between 2005 and 2007 to reach 2 billion Azerbaijani manat (AZN) in 2007 (roughly US$2.3 billion). Publicsector investments, if well targeted, can increase and improve the stock of capital employed in the production of public goods and services. The capital expenses of the government in Azerbaijan can be used, for example, for construction or renovation of public assets, acquisition of equipment and machinery, preparation of feasibility studies and as wage expenditures for implementation of public investment projects. The proportion of GDP accounted for by public investments remained around 11 per cent in 2007 (SSC 2007c). This figure is three to four times larger than the EU equivalent (EC 2003).