Karavaev: Capital preservation policy in Azerbaijan yields results

Against the background of the liberation of Azerbaijani territories from the Armenian occupation, we can expect an increase in investment in the country.

Alexander Karavaev, a researcher at the Institute of Economics of the Russian Academy of Sciences, told the Russian Bureau of Report.

The expert touched upon the topic of restoring the returned territories: "An essential element is a future, as yet unpublished program for the restoration of returned villages, settlements and agricultural land in parts of the districts around Karabakh. The program will consist of several stages. During the first years, the infrastructure will be restored: water pipelines, electric networks, gas supply systems. Significant volumes of work are envisaged for the restoration of road infrastructure. Plus housing and administrative and commercial construction. The importance of work is enormous, about 50 localities, even if we expect that only a part of the returned territories will be restored due to security issues.

We can predict that this will add at least 1.5% of GDP growth in 2021 and 2022, perhaps even more, given that the number of such settlements increases every day."

In terms of investment, Karavaev also expects growth: "In the first half of 2020, foreign direct investment in Azerbaijan increased by 23.5%, exceeding 2 billion US dollars. To a large extent, the reason is that Azerbaijani investors began to return home - the Central Bank of Azerbaijan recorded a two-fold reduction in Azerbaijani foreign investments. It shows that the policy of preserving capital in the country is producing results."