The occupation of Azerbaijan’s Nagorno-Karabakh region and seven surrounding districts by Armenia remains a key problem affecting the economic and political stability of the South Caucasus region. By occupying Nagorno-Karabakh and seven adjacent districts, Armenia has caused significant economic and social damage to Azerbaijan. In doing so, Armenia has also gained a chance illegally to exploit the vast natural resources of the occupied territories and to use them for the provision of economic and social stability in both Armenia and the occupied territories. Special focus has been given to the mining and agricultural sectors, as these are more advantageous for the implementation of the economic development goals of Armenia and the separatist regime created in the occupied territories of Azerbaijan. Using different economic indicators, this article examines how the natural resources in the mining and agricultural sectors in the occupied territories have become the main source for Armenia to maintain its economic and political influence over the occupied territories and to continue the occupation. By actively supporting illegal activities in the occupied territories, the Armenian government has freed itself from the financial burden that it would have to bear if the occupied territories did not have significant natural resources. Moreover, Armenia has not only freed itself from the financial burden of continuing occupation, it has also benefited economically from the exploitation of the resources in the occupied territories by importing more than 90 percent of the agricultural and mineral products from the separatist regime.

Keywords: Azerbaijan, Armenia, occupation, illegal economic activities, Nagorno-Karabakh region