ABSTRACT: 
Development of the non-oil export sector and economic diversification has become a critical issue for the government of Azerbaijan. This necessity is connected with fluctuating oil prices in the world energ markets and precipitous changes in international economics. President Mr Ilham Aliyev attended an interactive session on Strategic Outlook: Eurasia held as part of the Davos World Economic Forum in 2018 and stressed that “as a source of major income we should look at technology, innovation, industry, entrepreneurship, and agriculture”. Although these sectors have been prioritized and large-scale reforms are conducted in Azerbaijan, this paper detects that Azerbaijan is at the onset of economic diversification and its economy is still fueled by oil and gas revenues. The future progress will depend on how deeply and holistically the reforms will be realized.

Keywords: Economic diversification, non-oil sector, Azerbaijan, policies, growth.

JEL classification: F00, F01, F55, 038.