The future of Azerbaijan's economy

Regardless of the ongoing deep economic and financial crisis in the world, Azerbaijan is doing its best to protect its economy against the negative repercussions.

Azerbaijan is a tolerant state which successfully continues its dynamic development, including in the economic sphere. Despite the recent sharp fall in the oil prices, the country’s economy is maintaining its growth rate.

Over the past 10 years, Azerbaijan’s economy has grown by 300%. Poverty and unemployment have been sharply diminished, with measures of both now standing at 5%. In 2015, the non-oil industry grew by 8.4%.

To maintain economic development is a great achievement while the political, military and financial crisis is deepening in the world. Oil prices dropped threefold in 2015. For this reason, our revenues have fallen sharply, including naturally budget revenues and budget expenditures. We managed to largely save budget expenditures in 2015. Unfortunately, the ongoing challenges in the world don’t give grounds for optimism for 2016.

In the current circumstances, the government’s main objective is to ensure macroeconomic stability and the normal rate of inflation. At the end of 2015, inflation was less than 4 per cent. We need to try to keep it at the lowest level through 2016, too.

In recent years, we have attached great importance to local production, allocating funds to both public and private sectors. An important role will belong to the factors related to economic reforms, which will continue to improve the business environment in the country, eliminate unnecessary inspections and improve the licensing situation. We continue to ensure the transparency of the economic and financial sector in Azerbaijan. Indeed, the World Economic Forum has again ranked Azerbaijan at 40th in the world for competitiveness, and first in the CIS (Commonwealth of Independent States) region.

The non-oil sector, of course, is the driving sphere of our economic development. Azerbaijan’s economy is already diversified, with the non-oil sector accounting for about 70% of the gross domestic product. Our aim is to rapidly develop the non-oil sector in the coming years.

The rich oil and gas reserves of Azerbaijan and purposeful policy have created opportunities for doing huge amount of works in the energy sphere as well. The initiatives and projects put forward by Azerbaijan have gone beyond the borders of our region and now connect the countries and continents.

If we look through the energy security issue, it is clearly seen that Azerbaijan already plays an important role in the energy security of Europe. From this standpoint, the start of the implementation of the “Southern gas corridor” project has been a historic event.

“Southern gas corridor” consists of 4 projects. First is the exploitation of the “Shahdeniz-2” phase. The reserves in the Shahdeniz field exceed 1 trillion cubic meters of gas. In general, Azerbaijan's proven gas reserves together with the other gas reserves of the country amount to 2.6 trillion cubic meters. The second project is the expansion of the “South Caucasus gas pipeline” which connects Azerbaijan with Georgia. The third project is the “Trans-Anatolian gas pipeline” (TANAP). According to this project signed by Azerbaijan and Turkey in 2012, the gas pipeline will extend from Turkey-Georgia border till Turkey-Greece border. The fourth project is the “Trans-Adriatic pipeline” (TAP). The pipeline will extend from Greece to Albania and coming to Italy beneath the Adriatic Sea. All these 4 projects are the parts of the “Southern gas corridor”. Azerbaijan is an important shareholder in these 4 projects and the major shareholder in the TANAP project. As a result of the implementation of the “Southern gas corridor”, a number of countries will gain access to the Azerbaijani gas as an alternative gas reserve. Georgia, Turkey, Greece, Bulgaria, Albania and Italy are among the participants of the “Southern gas corridor” project. At the same time, memorandums of understanding have been signed with Montenegro, Bosnia and Herzegovina and Croatia that also want to join this project. So Azerbaijan becomes a very important and reliable partner for providing the energy security of Europe.

The development of transport infrastructure is also one of our priorities. Today we are restoring the historical Silk Way with the application of modern technologies and the participation of neighboring countries. At present, the Baku-Tbilisi-Kars railway – running from Azerbaijan through Georgia and into Turkey - is under construction and will for the first time connect Azerbaijan with Europe by train. This is of historical significance.

At the same time, several international airports have been built in Azerbaijan, while an international sea trade port is under construction that will be the biggest trade port in the Caspian basin.

Like in transport infrastructure, special importance is attached to the application of modern technologies in various spheres. Azerbaijan has joined the global aerospace family by launching its satellites - “Azerspace-1” and “Azersky” into orbit. We are building e-government tools to ensure modern management and increase of transparency.

Electronic services are provided by public authorities to the population, through “ASAN service” centres. Nine “ASAN Service” centres now function in our Republic. They provide 112 services in 30 fields by state entities and 140 functional auxiliary services. Two new centers are now under construction. 10 mobile buses serve citizens in different regions of the country. It has now been two years since we first launched this service, and during this time, 7 million people have used the services of ASAN and population’s satisfaction coefficient is nearly 100%. Some countries have started using our experience in this field.

Social infrastructure projects are also being implemented successfully in our country. A number of schools, kindergartens and medical facilities have been constructed or completely repaired in recent years.

We’re paying special attention to the development of tourism sector in Azerbaijan. Modern tourist and recreation facilities, hotel complexes have been built in the regions of our country, as well as in the capital Baku. The world’s most famous five star hotel brands have come to Azerbaijan during the last several years. All leading hotels of the world are now operating in Baku. The development of tourism once again approves the special weight of this field in non-oil sector.

It’s worth mentioning that Azerbaijan is known as one of the centers of multiculturalism in the world, and our nation is proud of this.