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Azerbaijan Investment Summit eyes perspectives for developing non-oil sector (UPDATE)

17 March 2015 17:13 (UTC+04:00)
Azerbaijan Investment Summit eyes perspectives for developing non-oil sector  (UPDATE)

By Sara Rajabova

Reducing reliance on oil became one of the major goals of countries around the world, especially for those economies which are heavily dependent on oil revenues.

The developments that took place in the world recently, mainly the dramatic fall in global oil prices led countries to devise new ways of developing non-oil sector.

Oil-rich Azerbaijan, which also significantly relied on oil incomes, has recently taken important steps to reduce its country’s dependence on oil and develop its non-oil sector. To this regard, the government has developed new programs to improve the structure of its economy, support for scientific capacity and innovative activities, development of the information and communication technologies and the transition to an information society, as well as formation of the modern education system and etc.

The measures taken by the Azerbaijani government in reducing its reliance on oil, as well as the country’s sustainable growth strategies have been discussed during the Azerbaijan Investment Summit entitled “Non-oil sector - the leading sector of the real economy” in Baku on March 17.

High-level officials, as well as more than 150 international business leaders and investors took part in the event in view of creating a diversified economy, beyond the reliance on oil revenues, for the country.

Ali Abbasov, Azerbaijan’s Communications and High Technologies Minister said the fall in oil prices has caused some panic among investors.

“Currently, many countries are trying to weaken the economy's dependence on oil and gas sector and Azerbaijan is no exception,” Abbasov said, adding that however, Azerbaijan has proved that decline in oil prices will have no effect on the implementation of its economic policy.

“In this regard, the sphere of ICT can help reduce the economy's dependence on the oil sector. Azerbaijan is between the developing and developed countries in terms of development of information technologies,” Abbasov said, adding $2 billion invested for five years in the sphere of information technologies.

Abbasov also noted the importance of the development of the export potential of ICT. In 2012, Azerbaijan exported goods from this area worth $41 million. An increase in exports of such products is needed to be provided, according to the minister.

He further noted that in general, ICT development in the country takes place in three areas: knowledge, development conditions and capital.

Having noted the importance of training of highly specialized staff in this field, he added that several state programs are already being implemented in this direction.

He also added that one of the barriers for ICT development in the country is that the Azerbaijani market is very small. From this perspective, he stressed the importance of developing Azerbaijan's export potential, as well as digital trade with neighboring countries.

“We are working on the development of the digital market and in this respect we are open to neighboring countries. This, in turn, is a model of free trade. If we can take effective steps in this direction, it will certainly contribute to the development of both the domestic market and markets of neighboring countries,” Abbasov said.

Abbasov also identified the need to develop high-tech industries in Azerbaijan.

“For the development of market, the government supports local companies, as well as the implementation of regional projects that contribute to the expansion of the domestic market. The presence of IT-service is definitely a very good result, and a lot of projects are being implemented in this direction. The matter rests in establishing regional DATA-centers, backhaul etc.,” the minister said.

Mikayil Jabbarov, Azerbaijan’s education minister briefed the event participants about the work which was done in the education field in recent years.

He said the main task of the ministry is to construct a system of education that will meet the requirements of the labor market.

Jabbarov informed the audience that the ministry plans to invite foreign specialists under the new state program on education of Azerbaijani youth abroad that is currently being prepared by the ministry.

Furthermore, the minister noted that under the state program, around 900 Azerbaijani students have already completed their education in foreign universities, adding that over 1,000 Azerbaijani young people had been sent abroad to complete their education in the last two years, as part of the program.

Sevinj Hasanova, Azerbaijan’s deputy minister of economy and industry spoke about the preventive measures which have been put in place to protect the country's economy.

“The increase in the incidence of crises in the world, the expansion of the scope of geopolitical risks and rising economic pressures have posed difficulties for Azerbaijan, as in many other countries,” Hasanova said.

She noted that the drop in crude oil prices in the world market, the rise of the dollar in the background of this fall, as well as the depreciation of currencies of major trading partners increased pressure on Azerbaijan’s national currency, the manat and necessitates remedial measures to protect the country's economy for the medium and long-term period.

Hasanova added that during the last 10 years Azerbaijan’s economy has tripled and its budget has grown 13 times, noting that the volume of investments to the country stood at $177 billion, while $123 billion of it was directed to the non-oil sector.

The summit was continued with panel discussions and presentations.

During the event, Ilgar Veliyev, the country managing partner of EY Azerbaijan made a presentation at a panel discussion dedicated to economic diversification and increasing the share of non-oil sectors.

Veliyev also shared his views on what significant changes need to happen to improve Azerbaijan’s business environment.

“Boosting the middle class, developing entrepreneurship and creating an overall infrastructure and business environment are important for people to succeed and develop without any obstacles. The government continues to sponsor and support business projects, which is strategically important for Azerbaijan and which has led to huge improvement in electronic services such as banking and tax payment. These developments are encouraging individual entrepreneurial projects. At the same time, we need to educate entrepreneurs so that they know their rights,” he said.

The summit assembled over 150 international policymakers, industry CEOs, influential government and academic leaders, investors and NGO representatives to discuss the key opportunities and challenges that characterize a nation in transition.

The Azerbaijan Investment Summit 2015 provided an excellent opportunity for the regional and international communities to share experience on economic diversity and discuss the positive outlook on investment environment in the region.

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