Page 140 - Azerbaijan State University of Economics

THE PUBLIC INVESTMENTS IN AZERBAIJAN: THEORETICAL AND PRACTICAL ASPECTS

25% in 2007, 10.8% in 2008, 9.3% in 2009 and 5% in 2010. One more

reason for decrease in investment return was increase in total investment
made by the public agencies. As it was mentioned above, effective from

2007 the public investments accounted for more than the half of total
investments in the country. At the same time, total investment during

2000-2010, i.e. recent 11 years, accounted for only 5% of GDP. This

index was below the average level for the countries participating in
Organization for Economic Co-operation and Development (OECD). For

example, during the recent 20 years (1990-2009) average share of
government investments in GDP was approximately equal to 12% [OECD

Regions at a Glance, 2011: 58]. In our opinion, increase in investment

return is one of the necessary factors determining the economic
development of the country.

From supply point of view, public investment indirectly affect the
economic development. At the same time it is not possible to reach

economic development only by upgrading and improvement of the
infrastructure. The development of human capital plays crucial role here.

In its turn this process depends on the level of operational expenses

considered for education and healthcare. At the same time economic
growth is affected by the investments into the production realm of the

economy. In other words, newly established infrastructure should be
used by the production sector and contribute to the economic growth.

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