Azerbaijan reconstruction in Karabakh and East Zangezur

Azerbaijan has reported substantial economic growth in the Karabakh and East Zangezur regions since 2020. Total product output in Karabakh has reportedly increased fourfold to 6 billion manat, while the East Zangezur region has seen output grow approximately 30 times to over 4 billion manat.

Finance Minister Sahil Babayev stated that between 11 percent and 13 percent of the national budget is dedicated to Karabakh reconstruction, with 26 billion manat allocated to date for the recovery of liberated territories. Infrastructure progress includes the construction of over 3,700 kilometers of roads and the commissioning of three strategic international airports. Approximately 100,000 people are currently living, working, or studying in these areas.

Investment in these regions is increasingly concentrated in the trade and service sectors, which offer higher profit margins and lower risks than manufacturing. While the state provides tax, customs, and utility concessions, challenges persist regarding logistics, export capabilities, and labor requirements.