Azerbaijan pushes economic reforms to diminish oil dependence

By Nigar Orujova

“Dependence on oil must be removed completely” is the contemporary slogan of the energy-rich Azerbaijan, which is keen to diversify its oil-dependent economy.

The nation, with a 0.5 percent share on the global crude market, indeed lost enormously after the recent 4-fold slump in oil prices during a year. Significant fall in petro-dollars, comprising 60 percent of the country's overall revenues, necessitated the government to radical reforms to revitalize economy.

Azerbaijan, standing on the threshold of a new post-oil period, is planning to carry out serious reforms in all spheres to strengthen and promote stability of the country. The new economic model will start operating in the forthcoming years.

Developing non-oil sector is on focus and the state has mobilized all resources to push forward once popular fields of economy in the country along with the innovative sectors.

Before gaining independence over 20 years ago, Azerbaijan was engaged not only the oil industry, but also light industry and agriculture. However, after the collapse of the USSR, the country was lack of investments to continue this activity. For this reason, most of the industries were not used for over two decades.

Today, Azerbaijan plans to revive these spheres by broad privatization of the light industry facilities. For this purpose, it is also planned to attract foreign investments, which will be mutually profitable for both foreign companies and Azerbaijan.

While foreign entrepreneurs will have a broad opportunities in the country enjoying simplified custom procedures and favorable business environment, Azerbaijani population will have more workplace, and the country will see large money flow to the budget.

Moreover, the country is largely investing in the agriculture with the aim not only secure itself with food but also export its delicious food products to foreign markets. At present, Russia keeps more interest in Azerbaijani products. Furthermore, the EU has also expressed interest in importing food products from Azerbaijan, which means that the local production complies with the high standards.

The country, which goes through the construction boom, meets its demand for construction materials, but can export them around the region.

By developing all these spheres Azerbaijan will soon become a country famous not only for the export of hydrocarbons, but other products as well.

Rich by nature, Azerbaijan also enjoys geographic location suitable to turn the country into the transportation hub of the region.

With becoming the regional hub, Azerbaijan can also turn into the tourism destination, as it has full infrastructure including modern transport system and hotels. Nevertheless, there is much more standing over modern infrastructure – this is beautiful Azerbaijani nature and captivating history, colorful art and hospitable population.

Moreover, the country has a potential to turn into the center of medical tourism.

The country also possesses powerful intellectual potential in which it is investing by means of the education programs. Azerbaijan has also possibility to attract foreign students to study some specific areas like oil and gas both in English and Russian languages.

Famous as a country that first in the world started offshore oil production, Azerbaijan today accentuates on the high technology, to stay in step with the technology progress.

For this end, the country has already established high tech parks and industrial parks around its territory. These new enterprises provide several benefits for entrepreneurs, which already attracted foreign investors. One of them is Taiwan’s Acer Company that started production of their computers in Mingachevir last October.

these steps can relieve Azerbaijan from oil dependence, strengthening its economy based on own resources.