✍️ Emin Aslanov
He earned his bachelor's degree in International Law from Baku State University and a master's degree from Syracuse University School of Law in New York City.
He currently works as a legal expert.
A question posed during the forum by Paolo von Schirach, head of the Washington-based Global Policy Institute, “What are the development vectors for Azerbaijan and the region?”, was of crucial significance (Paolo von Schirach, 2025). The answer, however, was just a 12-second statement:
“The main priority is not natural resources, but the fields of information technology and artificial intelligence. We are collaborating with leading companies in artificial intelligence…” (Ilham Aliyev, 2025)
Rather than clarifying the issue, Aliyev’s response raised further questions: What does the Azerbaijani government, or more precisely, President Ilham Aliyev, actually envision for the country’s economic future? Which vector has he chosen, and how realistic and sustainable is it?
A two-sentence strategy
Formulating and implementing economic strategy is one of the primary responsibilities of any state. But it appears that Azerbaijan’s political leadership treats this area with negligence. If a country’s president answers questions about economic development with a 12-second response, and one that’s far from concrete, it reveals a lack of serious thought about the nation’s economic future.
The sectors highlighted by Aliyev, information technology and artificial intelligence, are not supported by Azerbaijan’s current realities. The necessary infrastructure, human capital, and technological environment are practically non-existent. The claim of cooperation in these areas seems more like a PR message aimed at the international audience.
The new savior: transit and green energy
The issue that Aliyev spoke more extensively about was the ambition to turn Azerbaijan into a regional transit hub. The new geopolitical conditions in the region, particularly the standoff between Russia and the West and the resulting transportation vacuum, have temporarily made Azerbaijan attractive from a logistical standpoint. But even here, several questions arise:
- Can a transit economy serve as a long-term, sustainable strategy?
- Can the income generated from this sector ensure the welfare of 11 million people?
- What happens to people’s wellbeing if geopolitical conditions shift and Azerbaijan loses its strategic importance as a transit country?
The “transit hub” concept is essentially a new version of rentier economics. Unlike living off oil, this time it’s the country’s “geographic location” being rented out. But this, too, is an unstable source of income, heavily dependent on the terms set by foreign actors (Jody LaPorte, 2024).
As for green energy, while there is talk of Azerbaijan’s serious potential in this area, infrastructure development and the technological foundation are still in their infancy period. Achieving real export income will require years of time and billions in investment (Yana Zabanova, 2024).
An economy subject to one man’s will
In Azerbaijan’s reality, economic decisions revolve around a single figure - President Ilham Aliyev. Economic vectors, development plans, and international partnerships are not determined at the level of government or parliament but are shaped by the president’s speeches and initiatives. As a result, the entire economy becomes subject to the tactical interests of a single person, even, at times, his mood, or his affection (or lack thereof) for another country’s leader.
From 12 seconds to 12 years
The natural decline in oil production, the inability of increased gas exports to compensate for this loss, and the irreversible global shift to green energy all fundamentally call Azerbaijan’s current economic model into question (Jody LaPorte, 2024). The current “rentier state” model, grounded in the short-term monetization of natural resources and geography, represents a deeply flawed economic vision.
Even if Azerbaijan's current geopolitical advantage, driven by Russia’s isolation and demand for alternative transport routes, offers temporary income, there is no guarantee that this situation will remain stable or permanent. When global political balances shift, Azerbaijan could easily lose this position. At that point, questions remain unanswered: What new foundations will the economy stand on? Which sectors will grow? How will public welfare be sustained?
Previously, the steady revenues from energy resources gave the government both “time and freedom” to plan for alternative economic strategies. But time is running out, and the options are narrowing. Now, the state must act quickly. The times demand the creation of sustainable income sectors, investment in human capital, and the building of a technological ecosystem. Yet Azerbaijan’s rigid authoritarian system makes the future emergence of such sectors nearly impossible, because these require systematic reforms in economics, courts, politics, and education all of which pose uncomfortable dilemmas for the current political leadership. This is precisely why none of these issues were even mentioned in the president’s speech.
Tying economic vectors to the worldview and daily rhetoric of a single leader leads to disorder and fragility. It also sends an unsettling signal to international investors. Because when economic policy can change at the whim of personal decisions, there can be no guarantee of a stable investment climate. “Gentleman’s promises” made at the presidential level may appeal to a handful of investors, but not to the broader international market.
Moreover, the mere mention of sectors like artificial intelligence and the digital economy, if not backed by real infrastructure, educational capacity, and human resources, turns these into empty labels used for image-building. Transitioning to these sectors depends not just on foreign cooperation, but on realizing domestic potential, which in turn requires systematic investment. Currently, neither higher education nor the innovation infrastructure is being prepared for this transition.
In conclusion
Azerbaijan faces a critical choice: either detach its economic vector from personal rhetoric and shift toward strategic, collective planning or confront new waves of economic and social crises as its transit ambitions and post-Soviet oil model reach exhaustion.
That is why the president’s answer about the country’s economic future should have shaped not just the next 12 seconds, but the next 12 years, and beyond.
However, it seems that the country’s supreme ruler has chosen to bury Azerbaijan’s economic future in just 12 seconds.
References
Paolo von Schirach, n.d. President of the Global Policy Institute: https://globalpi.org/person/paolo-von-schirach/
İlham Əliyev 2025, 19 Iyul 2025 AZTV: https://www.youtube.com/watch?v=ykZDQdukM64
Yana Zabanova. 2024. The EU and Azerbaijan as Energy Partners: Short-Term Benefits, Uncertain Future https://www.boell.de/en/2024/11/05/eu-and-azerbaijan-energy-partners-short-term-benefits-uncertain-future
Jody LaPorte, 2024. Baku’s Balancing Act: Azerbaijan Between Green Energy and Oil Rents https://carnegieendowment.org/research/2024/10/bakus-balancing-act-azerbaijan-between-green-energy-and-oil-rents?lang=en
