August 6, 2012

Azerbaijan’s New Oil Wealth: A Blessing or a Curse?

As has been the case with most countries, Azerbaijan’s newfound oil wealth has been a mixed blessing for that country. On the one hand, the oil has made Azerbaijan a far more important actor on the international scene than it might otherwise be and the earnings from the sale and transit of oil have brought unprecedented resources into the country. But on the other hand, it has increased outside intervention in Azerbaijan’s internal affairs, exacerbated social tensions by radically increasing income differentiation, and allowed the government to function without the constraints that having to raise money via taxation inevitably imposes.

As has been the case with most countries, Azerbaijan’s newfound oil wealth has been a mixed blessing for that country. On the one hand, the oil has made Azerbaijan a far more important actor on the international scene than it might otherwise be and the earnings from the sale and transit of oil have brought unprecedented resources into the country. But on the other hand, it has increased outside intervention in Azerbaijan’s internal affairs, exacerbated social tensions by radically increasing income differentiation, and allowed the government to function without the constraints that having to raise money via taxation inevitably imposes.


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