Research Information System
37th International Scientific Conference on Economic and Social Development - Socio Economic Problems of Sustainable Development, Baku, Azerbaijan, 14 - 15 February 2019, pp.577-583
The paper investigates impact of foreign direct investment (FDI) in the oil sector in Azerbaijan on sustainable development, including components of the economic growth and well-being of the population. Assessment of employment level dependence on FDI shows that FDI in the oil sector does not have a significant impact on employment. There are several reasons for this. First, main part of FDI volume entering the country is mainly focused on the oil sector, this sector is capital-intensive, not labor-intensive, and investments are spent in the development of more core capital and application of new technologies in this sector. Although FDI has a certain impact on the level of employment in the oil and gas sector, such impacts are not felt in the economy as a whole. The effects of FDI on the poverty level are also an important issue. Studies show that the use of FDI is crucial in reducing poverty. As well as this paper shows that FDI plays an important role in reducing poverty in Azerbaijan. The impact of FDI on poverty takes place in different countries through different mechanisms. This is due to the diversity of areas where the FDIis directed. Since the main part of the FDI in Azerbaijan focuses on the oil and gas sector, the value added generated in this sector allows the country's revenues to be recovered from the Oil Fund and the redistribution through the state budget make it possible for the FDI to be used efficiently. Thus, the fact that FDI is included in the country does not mean that the economic and socio-economic effects of this funding are positive. The positive impact of economic effects of FDI and its rational use depend on the economic conjuncture of each country.