As in different areas of the socio-political life, the Azerbaijan Democratic Republic have been holding a number of events in the field of formation of an independent national economy and social sphere as well. Its economic platform was supposed to afford equal opportunities for development of proprietary pluralism - the state property, private, personal, stock ownership, municipal property and other forms of property.
The basis of the agrarian program of the Azerbaijan Democratic Republic were draft laws on agrarian reform submitted to the Parliament. One of the draft laws envisaged the allocation of lands without indemnity, but the other one – in return for a certain compensation.
Within 23 months of its existence, the Government of the Democratic Republic gained significant success in addressing a number of the current economic issues. The desperate plight of the petroleum industry was alleviated, the construction of the Baku-Julfa railway was continued, a bridge was built over the Kur River, the State Bank of Azerbaijan was established, the national currency was issued, and the Caspian Sea Shipping was developed.
Establishment of the international economic relations on the new bases was one of the important issues facing the Government. The Government intended to establish and expand the economic ties with foreign countries, especially with close neighbors.
One of the main goals that the Azerbaijani government was trying to realize in its foreign economic activity was to meet the needs of the population for essential goods and to find additional sources of income to increase the treasury's revenues. One of these additional sources was customs revenue.
In terms of formation of the Republic's foreign economic relations, the agreement with Georgia was of great importance. According to the agreement signed on December 26, 1918, which was valid for a one-year term, it was allowed to buy and sell the high demand products within the needs of these republics without customs duties, as well as petroleum, mazut, kerosene and oils were permitted to be exported to a certain extent for the needs of the Georgian population and the railway. Food products and supplies were sent to meet the needs of the Azerbaijani population living in difficult conditions through the diplomatic representation of Azerbaijan in Armenia.
A trade agreement was signed at the meeting of the Soviet Russia and Azerbaijan Joint Commission on March 30, 1920. However, Russia did not comply with the terms of the agreement.
The petroleum industry was a leading branch of economy during the Azerbaijan Democratic Republic as well. As oil was the most important driving force in the world at that time, the parliament and the government periodically analyzed the state of petroleum production and processing, learned the world’s oil market.
Social issues were at the center of attention in the activity of the Azerbaijan Democratic Republic. This was reflected in the approved laws and concrete actions taken by the Government.
The state’s social policy was based on two viewpoints. First, to create conditions for every citizen of Azerbaijan to show economic activity and earn an income and thus to reduce poverty to the minimum. Second, to ensure the members of society to earn an income that can enable them to meet their basic social needs. The issue of increasing the salaries of different categories of population in connection with inflation was an important aspect of the government’s social policy.
A special attention was paid to providing accommodation and meeting the financial needs of refugees, organization of health care and other related issues.
The state budget allocated enough funds for the opening of new hospitals, preparation of doctors and other medical staff, prevention of infectious diseases, and provision of population with medicines.
The activity of the Baku Trade Port Department was restored on October 30, 1918. Passenger and cargo transportation between Baku and Port-Petrovsk (Makhachkala), Salyan and Lankaran ports was carried out with commercial vessels. As a result of the government’s serious efforts, the Baku-Batumi oil pipeline was restored and put into operation in 1919.
After the British troops left Azerbaijan in August 1919, the Baku port and the commercial fleet passed to the Government of the Democratic Republic. The country’s commercial vessels began to float under the flag of the Azerbaijan Democratic Republic.
The collapse of the Azerbaijan Democratic Republic in April 1920 did not allow the full implementation of the socio-economic development program by the Government.