<p>The social and political processes, started in 1980s, resulted with the collapse of the USSR, and all union republics became independent. Azerbaijan was one of the first countries, which gained independence in those years. Azerbaijan declared independence on 18th of October 1991. Thus Azerbaijan became one of the countries, which balances economic and political relationships in the region. This characteristic comes from the geopolitical position of Azerbaijan. Located in the region of the Southern Caucasus, Azerbaijan has borders with the Caspian Sea to the east, Georgia and Russia to the north, Iran to the South, and Armenia to the southwest and west. A small part of Nakhchivan Autonomous Republic also has borders with Turkey to the northwest. The transition period in Azerbaijan was observed some problems. However the country could maintain independence. To do so, several economic, social and political problems were resolved. The main problem, which Azerbaijan confronted, was structural. Therefore, it was important to create economy, which can manage itself independently. Throughout the years, some important steps have been taken in order to liberalize the economy. Azerbaijan has huge natural resources, which triggered the development of economy. Oil and gas resources are the most important wealth of Azerbaijan. In 2015, 90% of the export belongs to the energy carriers. This figure also shows the importance of the energy sector in Azerbaijan economy. For this reason, energy resources should be used relevantly. It was not possible to have investment and then divert it to the relevant sectors, without the interference of the government in the transition period. Therefore regulator also should play role, with the invisible hand in order to stabilize free market economy. The political stability was obtained during Heydar Aliyev’s government. The strong political power triggered economic development. Ilham Aliyev, the successor of nationwide leader Heydar Aliyev continues to realize the political program of his father.</p>
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