Page 141 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE

100%
90% 19.8 19.2 19.3
29.7 27.5 26.1 30
80% 35.2
53.2 54.4 51.3
70%
60%
50%
49.7 57.1 68.3 72.5 74.7 54.3
40% 64.6 46.7
30% 28.9 26.2 29.6
20%
10% 20.6 15.1 12 15.7 18.1 17.8 19.4 19.1
0% 8.3 6 9.2
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Construction of non‐oil objects Extraction of crude oil and natural gas Construction of service objects

Picture 5. Structure of investment to fixed capital (% of total)

As we can see from the picture above the share of investments into

the service sector accounted for more than 50% effective from 2008. This is
due to the public investments. For example, in 2010 69% of investments

made into the transportation sector were done by the public agencies.

Moreover, investments to the non-oil production sector were still at low
level. In our opinion, due to the fact that the major part of national savings is

under the public control, it is easier to manage the investments and direct
them to production realms as well (Table 2). From this point of view

connection of infrastructure and production sector is very important.

Therefore along with direct investment activity of the government, it is very
important to support the financial opportunities of private sector and

develop collaboration between government and private sector. Nowadays
role of the government in the development of the private sector is crucial.

The government participates and assists the creation and establishment of

large businesses with can assist the diversification of the economy.

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