Head of the Center for Analysis of Economic Reforms and Communication, Doctor of Economics told that the Center continues its research in the sphere of development of Karabakh. In his opinion, with the reintegration of Karabakh, capital will increase in Azerbaijan’s economy. “Along with 2.2 billion manats allocated from the state budget for 2021, national wealth involved in circulation - land, forests, water, minerals, property, and cultural resources, increase the amount of capital, i.e. fixed assets”

Given that the labor force in Azerbaijan is kept stable, the increase of the capital–fixed assets, accelerates the capital-intensive economic growth. Since they are based on modern technologies, new fixed assets will increase the return on assets, that is, the volume of production per manat of capital. On the other hand, by Solou’s model, capital investment in Karabakh will create more value since the capital investment starts from scratch, and the distance to the steady-state level is long. It is the same with the cases of Germany and Japan that could build a competitive economy from ruins after the Second World War. There is no coincidence that recently Standard & Poor's (S&P) confirmed Azerbaijan's long-term sovereign credit rating in local and foreign currencies at “BB+/B”, upgrading its outlook from “negative” to “stable”. The decision of the agency is based on the reduction of security risks, as well as risks in the financial sector and balance of payments after the liberation of Karabakh and signing the agreement on a ceasefire,” said Vusal Gasimli.

Vusal Gasimli considers that there are another two factors to impact economic growth: the efficiency of the economy itself and human capital. “President Ilham Aliyev announced a new, more efficient model of governance in Karabakh. He instructed to create the institution of a special representation of the President, and the Karabakh Revival Fund was established. This measure laid the foundation of the Karabakh model of development. Once this model gains success, it will be implemented in other regions of Azerbaijan. Smart region approach is applied in Karabakh: modern urban planning, approach corresponding with the challenges of the 4th industrial revolution, foreign capital, and, most importantly, a new model of governance. Karabakh, which has become a burden and a shackle for Armenia, is a driver of development and a source of inspiration for Azerbaijan,” concluded V.Gasimli.