By Mirsaid Ibrahimzade
The Asian Development Bank (ADB) keeps on supporting Azerbaijan and allocating funds to help the country achieve a further diversified, independent and sustainable economy.
ADB plans to allocate loans totaling $280 million to Azerbaijan for the development of the private sector and to improve its efficiency, the Bank told local media.
“The Bank plans to provide these funds to Azerbaijan in 2020-2022. In addition, ADB plans to provide annual technical assistance in the amount of $1.8 million within this period,” the Bank stated.
The message reads that the government seeks to diversify the economy through the development of the non-oil private sector. ADB believes that within this program, small and medium enterprises (SMEs) and the non-oil sector should become more competitive by expanding innovation and technology adoption.
At the same time, according to ADB experts, efforts should be made to increase the productivity of agriculture, increase production and export of agricultural products, including by improving food safety systems.
In addition, there is a need to support microfinance organizations and introduce more financial sector instruments and risk mitigation schemes to improve financial inclusion.
“We expect that in the coming years, Azerbaijan’s indicator in the World Bank’s Doing Business ranking will reach at least 80 points (78.64 points in 2018), lending in national currency from non-bank credit organizations will increase by 10 percent of the base figure of 413.9 million manats ($242.76 million), and agricultural loans will reach 5 percent of the loan portfolio of banks and non-bank credit organizations, with a base figure of 3 percent,” ADB noted.
It is noteworthy that ADB has approved the five-year Country Partnership Strategy for Azerbaijan designed for 2019-2023. As part of the new five-year strategy, ADB plans to allocate $900 million to Azerbaijan.
The main directions of the strategy include developing the private sector, improving the efficiency of the public sector, improving the infrastructure and strengthening the human capital.
Azerbaijan joined ADB in 1999 and its share in the Bank is 0.5 percent. The Bank's local representative office opened in the country in 2004. Azerbaijan hosted the 48th Annual Meeting of the ADB Board of Governors in 2015.
ADB has provided a $5.1 billion loan, guarantee, grant and technical assistance for the country so far.
The Bank’s program for Azerbaijan during 2011–2017 consisted of 47 projects. Energy was the largest sector supported, accounting for 42 percent ($2.1 billion) of total financing, followed by transport at 27 percent ($1.4 billion).
Mirsaid Ibrahimzade is AzerNews’ staff journalist, follow him on Twitter: @MirsaidIbrahim1
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