Azerbaijan at the crossroads of interregional economic paths: The great success of a Caucasian country
The COVID-19 pandemic and the global transformation of the financial and economic system have forced many countries to reconsider their economic policies.
To that end, ensuring economic diversification, liberalization and economic transparency is of paramount importance. Azerbaijan has already managed to pass a long way in this direction, having achieved significant results on many issues for the development of local business, as well as the attraction of foreign investors to the country.
Thus, in order to simplify all necessary procedures and ensure transparency of the entire process, in 2012, the ASAN Service – State Agency for Public Services and Social Innovations under the President of the Republic of Azerbaijan was established upon a presidential order. ASAN Service provides services of state entities and private organizations in a uniformed and coordinated manner. To avoid the need to apply to each state body separately, citizens can apply to the ASAN Service for the services of various state bodies and organizations.
In 2017, the Small and Medium Business Development Agency of the Republic of Azerbaijan (KOBIA) was established with the aim of supporting and developing small and medium-sized businesses in the country, providing them with the necessary legal assistance, attracting local and foreign investment to the country. So, in 2020 alone, the number of entrepreneurs in Azerbaijan increased by more than 16%.
The data about the volume of GDP and trade turnover for 2021 indicate that Azerbaijan retains the leading position in the South Caucasus in terms of all economic parameters.
According to the latest indicators, in 2021, the total GDP of the region amounted to $82.3 billion, $53 billion of which falls on Azerbaijan’s share, and $16 and $13.3 billion - Georgia and Armenia, respectively. As for the indicators of foreign trade turnover on a regional scale, Azerbaijan also ranks first with $33 billion, followed by Georgia and Armenia with $14 and $7.4 billion, respectively.
These figures are a vivid manifestation of the great work done by Azerbaijan to strengthen and diversify its economy. Azerbaijan is no longer satisfied with the fact that the main items of its foreign trade are still oil and gas. However, in January-September 2021, foreign direct investment in the Azerbaijani economy amounted to over $3.6 billion, with a 20.7-percent growth in the country’s non-oil industry and a $2.2 billion increase in foreign exchange reserves.
The country is turning from a supplier of hydrocarbons into one of the most significant actors in the international transport and trade system. The strategically important location of Azerbaijan, the creation of a favorable business climate, the opening of techno and industrial parks have for many years ensured the country's participation in the largest transnational projects and the flow of foreign investment.
In addition, Azerbaijan is becoming increasingly important for the economies of the member countries of the Organization of Turkic States. That is why the issue of creating a trans-Caspian gas corridor (a gas pipeline between Azerbaijan and Turkmenistan), as well as increasing the volume of cargo transportation between Turkey and the countries of Central Asia through the territory of Azerbaijan, has again become relevant.
Furthermore, Azerbaijan is becoming increasingly important for the economies of the member countries of the Organization of Turkic States. That is why the issue of creating a Trans-Caspian gas corridor (a gas pipeline between Azerbaijan and Turkmenistan), as well as increasing the volume of cargo transportation between Turkiye and the countries of Central Asia through the territory of Azerbaijan, has again become relevant.
To strengthen economic stability, Azerbaijan also actively cooperates with many other international organizations and institutions, including the International Monetary Fund, the Islamic Development Bank, the Asian Development Bank, as well as the European Union (in particular, EU4Azerbaijan), the United Nations Development Program, the US Agency for International Development.
It is also worth emphasizing that the Second Karabakh War and the liberation of Azerbaijani lands from the 30-year-long occupation opened up new opportunities not only for Azerbaijan but for the entire region. For the restoration of the liberated Azerbaijani territories, almost razed to the ground, there is a need for great work, local and foreign investments.
Thanks to the great potential of the Karabakh region, Azerbaijan managed to attract multi-million dollar investments this time as well. The involvement of international investors in the restoration of Karabakh makes it clear that Azerbaijan is a stable country in every sense, whose words do not differ from deeds.
Analytic group of News.Az
The article focuses on the topic of the promotion of a liberal economy.
The article was published with the support of the Media Development Agency of the Republic of Azerbaijan (MEDIA).