After Azerbaijan Republic restored its state independence in 1991, started to realize its sovereign rights and conduct independent policy in economic field. Major directions of this policy were transition to economic system, created in base of different forms of property, market economy and integration to world economy. Economic development existed in country since period of independence till now can be divided in two main stages. First period was economic chaos or regress covering 1991-1995. Second is period of macroeconomic stability and dynamic economic development lasting since 1996. Within short historical period after restoration of state independence, despite hard initial conditions very big achievements were made in field of social-economic development of country and its integration to world economic system due to foresight policy and hard activity of nationwide leader of Azerbaijani people Heydar Aliyev. The biggest achievement was creation of model of Azerbaijan - a new model of economic reforms and development in process of independent state building implemented in the country during this period. In the second stage of economic development a number of big-scale policy documents (conceptions, strategies and programs) were adopted as legal base of realization of mentioned model in Azerbaijan Republic ('Program on State Assistance to Small and Middle Entrepreneurship in Azerbaijan (1997-2000)', 'State Program of Development of Small and Middle Entrepreneurship in Azerbaijan (2002-2005)', 'State Program of Development of Agrarian Sector in Azerbaijan (2002-2006)', 'Demographic Development Concept of Azerbaijan Republic', 'State Program on Development of Tourism in Azerbaijan Republic in 2002-2005', 'State Program on Poverty Reduction and Economic Development in Azerbaijan Republic (2003-2005)', 'State Program on Social-Economic Development of Regions of Azerbaijan Republic (2004-2008)' and etc) and a number of documents are under preparation ('Employment Strategy of Azerbaijan Republic', 'Integrated Strategy of Trade and Investment on Non-Oil Sector' and etc). One of priorities of economic policy of Azerbaijan Republic was preparation of oil strategy of independent state. Implementation of this strategy, author of which is nationwide leader of Azeri people Heydar Aliyev, started in September of 1994 by signing the 30-year contract between Azerbaijan Republic State Oil Company and 13 most popular oil companies (Amoco, BP, McDermott, Unocal, SOCAR, LUKoil, Statoil, Exxon, Turkiye Petrolleri, Pennzoil, Itochu, Ramco, Delta) of a number of countries of the world (USA, Great Britain, Russia, Turkey, Norway, Japan and Saudi Arabia) on joint exploitation of 'Azeri', 'Chirag' wells and deep part of 'Guneshli' well in Azerbaijan sector of Caspian Sea and share division of oil production. 20 September 1994, which was written with golden letters in new history of independent Azerbaijan Republic, will always be remembered by present and future generations. Singing and realization of this contact that is known all over the world under name 'Contract of century' is bright reflection of implementation of new oil strategy, which is the economic development concept of independent Azerbaijan and was prepared by Heydar Aliyev. On December 29 of 1999 nationwide leader Heydar Aliyev signed Decree 'On Establishment of State Oil Fund of Azerbaijan Republic'.Great Britain, Russia, Turkey, Norway, Japan and Saudi Arabia) on joint exploitation of 'Azeri', 'Chirag' wells and deep part of 'Guneshli' well in Azerbaijan sector of Caspian Sea and share division of oil production.
20 September 1994, which was written with golden letters in new history of independent Azerbaijan Republic, will always be remembered by present and future generations. Singing and realization of this contact that is known all over the world under name 'Contract of century' is bright reflection of implementation of new oil strategy, which is the economic development concept of independent Azerbaijan and was prepared by Heydar Aliyev.
On December 29 of 1999 nationwide leader Heydar Aliyev signed Decree 'On Establishment of State Oil Fund of Azerbaijan Republic'.
Major goal of creation of Oil Fund was to ensure fair division of oil wealth gifted to Azerbaijani people by God among generations. One of main targets of Fund is to collect and increase oil revenues for future generations and to use these revenues for present generations by taking into consideration current social needs of country, economic progress and development requirements.
On the wise decision of our great leader Heydar Aliyev, the first funds from Oil Fund were allocated to funding the measures concerning improvement of social-domestic circumstance of refugees and IDPs that are most sensitive section of Azerbaijani people and live under hardest conditions.
Due to large-scale and basic reforms carried out in economy of country significant results were gained in industry in 1995-2004. Contracts signed on September 20 of 1994 with big companies representing developed countries of the world on joint activity in oil and gas production industry stimulated rapid development of oil and gas industry. Production of industrial output lifted. Volume of production increased due to visible progress almost in all the fields of industry as well in oil and gas, chemistry and oil chemistry, machinery and metal processing, building materials industry. Processing industry develops also along with production industry. Over the last six years production increased 1,5 times in processing industry fields, as well 43% in food industry, 2 times in wood production, 30% in paper production, 2,5 times in chemical production, 5 times in building materials production, 3 times in metallurgy industry.
More than 3,000 new industrial enterprises were opened in 1993-2003 and number of them reached 5536 for January 1, 2004. As a result of 'open door' policy that was founded by nationwide leader and is implemented at the present day, number of foreign and joint ventures increased 3 times during these years. At the moment 192 foreign-invested enterprises representing 63 states function in industry field, thousands of workplaces have been opened. 74% of investments made in our national economy in 2003 was directed just to the industrial fields. Visible growth of newly formed economical structures, enlargement and dynamic development of small entrepreneurship, engagement of physical persons with entrepreneurship is accompanied with growth of role of private sector.
Important works are implemented in direction of meeting the requirements of economy and population to energy resources. As a bright example of special attention of President Ilham Aliyev to this field, 'State Program on development of fuel-energy complex of Azerbaijan Republic (2005-2015)' was prepared by Industry and Energy Ministry and confirmed by Decree 635 of President of Azerbaijan Republic dated February 14, 2004 in order to ensure energy security in country and meeting of the growing demands to energy resources in more effective manner.
Being one of major fields of Azerbaijani economy in all times, agriculture played important role in development of country and assurance with necessary consumption products. Adoption of laws on 'Bases of agrarian reforms', 'Reforms of sovkhozes and kolkhozes', 'Land reform' and other important legal documents contributed to implementation of fundamental changes in agrarian-industrial complex. Law 'On land reform' considered for the first time in CIS the criteria such as giving the land to private property, affirmed it as an object of purchase-sale.
Due to the serious structural reforms implemented in agriculture all the agricultural enterprises, as well sovkhozes and kolkhozes were abolished, except a number of pedigree and other such kind of farms, and their properties were divided among members of farms. Acceleration of formation of new property - villager-farmers in the village firmly contributed to better organization of works in agriculture and development of agrarian sector.
For their rapid and radicalism, agrarian reforms deeply differed from reforms carried out in other sectors of Azerbaijani economy and even reforms implemented in CIS countries and played important role in formation of private property and development of business in republic.
Reforms realized in bank system played great role in removing the distrust in banks existed in the first years of independence. Modern bank building works started in country, works implemented in direction of formation of two-stepped bank system, strengthening of banks, growth of their authorized capital. Weak banks, unable to work under conditions of free market economy and stand the competition, were eliminated. Number of banks functioning in country was decreased for four times, capital base of bank system increased 5 times.
One of major criteria ensuring economic development is dynamics of capital investment. Funds directed to capital investment serve growth of production, as well construction and commissioning of new enterprises, educational, medical, dwelling and other social establishments, creation of new workplaces. This is why yearly growth of investments, as well volume of foreign investments in economic policy of Azerbaijan Republic is considered one of priorities.
After Azerbaijan Republic gained state independence, one of important directions of its foreign economic policy was relations with international financial-credit and economic structures. Much has been done in this field over the passed time. Azerbaijan became member of almost all the prestigious international structures, as well in 1992 International Monetary Fund, World Bank, European Bank for Reconstruction and Development, Islam Development Bank, in 1999 Asian Development Bank and carries out regular consultations with these organizations on issues concerning transition to market economy, use their financial resources.
So, numerous positive results caused within a short time by reforms implemented in all fields of economy prove once again correctness of economic policy firmly carried out by direction of Azerbaijan Republic.