Social Watch at LLDC3
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Published on Fri, 2025-08-08 00:00
Dr. Kenan Aslanli participated in the Third United Nations Conference on Landlocked Developing Countries (LLDCs), that took place in Awaza, Turkmenistan, from 5 to 8, August, 2025. Dr. Kenan Aslanli’s spoke at plenary session 2: "Digital Economy, Innovation and Sustainable Development" at the Civil Society Forum. When we consider resource-rich and landlocked countries, we must underline a serious contradiction. These countries own huge natural wealth yet often encounter structural barriers to long-term inclusive social-economic development. But within this challenge lies a unique opportunity to shape innovation-driven, sustainable futures. Let me start with the opportunities. 1. Natural resource revenues can provide critical fiscal space sometimes accompanying with “3F” symptoms: fluctuation, fragility and finiteness. With sound and counter-cyclical resource revenue management mechanisms such as sovereign wealth funds and transparent institutions, these funds can be wisely invested in education, research, digital infrastructure, and transformative technologies - essential building blocks of an innovation ecosystem. In Azerbaijan, revenues from hydrocarbons have created a strong fiscal base through State Oil Fund or SOFAZ that accumulated more than 60 billion USD assets in 2025 to invest in infrastructure, education, digitalization. Also, key institutions such as ASAN Service and the Innovation Agency already demonstrate how technology and good governance can be combined. 2. The exigency to diversify economies away from volatile commodity markets creates strong incentives to invest in human capital, entrepreneurship, and knowledge-based sectors. Major elements of economic diversification are the following: capital (human capital, physical capital and natural resources), competitive markets allowing more efficient use of resources, nfrastructure, sustainable institutional and structural reforms, flexibility in foreign investment flows, trade and macroeconomic stability. Resource-rich landlocked countries must handle and cope with these challenges using accumulated resources and strong will. 3. Being landlocked countries can foster regional cooperation and integration. With no direct access to seaports, innovation in logistics, connectivity, and digital services becomes not only relevant but transformative. Relevant examples can be e-commerce, e-governance, or cross border green energy corridors. Despite being landlocked, Azerbaijan owns great potential based geostrategic location to become a regional hub for transport, digital trade, and clean energy cooperation, particularly with growing domestic and foreign investments in renewable energy (solar and wind) in the Karabakh and Nakhichevan regions. Now, let me emphasize on the important impediments for resource-rich and landlocked countries. 1. Many resource-rich and landlocked countries suffer from the “Resource Curse” and “Dutch disease” symptoms, where reliance on huge flows of the natural resource wealth undermines governance, suppress competition, lead to deindustrialization and discourages innovation. 2. Landlocked geographical position often means high trade and transportation costs, poor connectivity, and limited integration into global value chains that obstruct knowledge flows and technology transfer. 3. Another key impediment is policy inconsistency - frequent shifts in social and economic development priorities, fragile institutions, and underfunded education systems can prevent the emergence of a supportive innovation environment. 4. The “short-termism” or relatively short horizon in planning process associated with resource extraction and resource export often runs counter to the long-term vision required to fulfil the sustainable development goals. In conclusion, for resource-rich and landlocked countries, building an innovation ecosystem and prioritizing sustainability is vital task. The overreliance on oil-gas resources increases the need for diversification and innovation ecosystems, to avert the “resource curse”. Universities, businesses, civil society and government should work together with vision and will to build an effective innovation ecosystem and to align economic growth with the sustainable development goals. This session was moderated by H.E. Mr. Edil Baisalov, Deputy Chairman of the Cabinet of Ministers of the Kyrgyz Republic. Speakers:
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