Strategic Pathways for the Economic Revitalization of Karabakh and East Zangazur Regions

Abstract

This article examines contemporary approaches to the development and revitalization of the Karabakh and East Zangazur economic regions. It presents conceptual strategies for the efficient utilization of resource potential in the liberated territories and summarizes key development objectives. The study emphasizes the importance of innovative strategic approaches for accelerating the growth of post-conflict regions. The abundant resource potential and developmental drivers of these newly established economic zones are analyzed, highlighting the significance of their efficient exploitation.

Alternative strategies for attracting investment and financial resources to the regions are evaluated. The study includes recent data on fixed-capital investments and industrial output in both regions. The prioritization of agricultural sector development in Karabakh and East Zangazur is substantiated, alongside the benefits of integrating advanced technologies, including smart technologies. Methodologically, the research relies on economic analysis, synthesis, and generalization, supported by scientific literature and empirical studies on regional development challenges. The article underscores the need to define effective development priorities and to establish mechanisms for the socio-economic revitalization of Karabakh and East Zangazur under contemporary conditions. Opportunities within the regions are reviewed, including the sectoral composition of the local economies. The study outlines state policies aimed at restoring social and production infrastructure damaged during the occupation, noting that reconstruction and construction activities are predominantly funded by the state budget. In addition to exploring alternative financial sources and fostering traditional economic sectors, the study assesses prospects for emerging high-tech industries. The advantages of smart-technology-based development are analyzed, and potential outcomes are forecasted. Challenges related to creating an attractive investment environment in the regions are examined, accompanied by scientific recommendations for necessary interventions. The promotion of entrepreneurship and development of production infrastructure in the liberated territories are emphasized. The multifunctional role of newly established economic mechanisms—such as industrial parks, free economic zones, and agricultural parks—is assessed. The study highlights agriculture as a high-potential economic sector, evaluating fertile conditions suitable for wheat production and exploring opportunities in viticulture, animal husbandry, and cotton cultivation. Tourism development prospects, particularly in Shusha and Kalbajar, are investigated, alongside the formation of a cultural economy and service sector development in Shusha—the first potential sectoral structure of its kind in Azerbaijan. Finally, the strategic implications of major infrastructure projects, including international airports, roads, and railways, are considered. The article emphasizes the creation of new regional development mechanisms and initiatives in Azerbaijan through improved management of Karabakh and East Zangazur. Development priorities are identified from short- and long-term perspectives, taking into account contemporary challenges, emerging global trends, post-pandemic assumptions, and objectives for revitalizing the liberated regions. Based on these analyses, the article provides policy recommendations and strategic suggestions.