Aze.US
The South Caucasus may be entering a rare period of strategic economic opportunity following recent high-level U.S. engagement in the region, Azerbaijani economist Natig Jafarli said in a televised discussion, while warning that internal reforms – not foreign funding – will ultimately determine the outcome.
Jafarli described the diplomatic momentum as comparable in scale, though not certainty, to past reconstruction or modernization moments such as the Marshall Plan or East Asia’s post-war development. He stressed, however, that the current situation represents only a chance, not a guaranteed transformation.
According to the economist, announced U.S.-linked financial commitments in the region should be understood as investment structures rather than aid, with returns, control shares, and project implementation expected to involve American companies directly.
He argued that the region’s future economic model will likely shift away from traditional hydrocarbons toward data infrastructure, artificial intelligence, and large-scale energy supply, identifying electricity availability and cooling capacity near the Caspian Sea as potential competitive advantages for Azerbaijan.
Jafarli also characterized the Armenia-Azerbaijan peace trajectory as increasingly irreversible, suggesting that reduced geopolitical confrontation could unlock broader regional investment flows and diminish external power influence.
Despite these opportunities, he warned that Azerbaijan’s decisive challenge remains domestic.
Key constraints include:
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high borrowing costs for businesses
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limited contribution of small and medium-sized enterprises to the economy
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regulatory instability
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weaknesses in judicial and investment protection frameworks
Without structural reform in these areas, Jafarli said, expectations of an “economic miracle” would remain unrealistic regardless of foreign capital inflows.
The discussion reflects a broader regional debate over whether geopolitical shifts can translate into sustainable economic transformation across the South Caucasus.