Azernews.Az

By Sabina Idayatova

Baku hosted an international conference on the middle class in Azerbaijan organized jointly by a leading local think-tank and the World Bank last Wednesday.

Addressing the event, "Middle class in Azerbaijan: social, economic, political dynamics and prospects", Director of the Center for Strategic Studies under the President of Azerbaijan, Farhad Mammadov, said that a state program on social and economic development of the country's regions for 10 years, rather than five years, is expected to be adopted in February next year.

Mammadov said the emerging middle class will play a special role in achieving the goal of doubling Azerbaijan's GDP over the next decade.

"The oil strategy, which has been successfully implemented in the past 20 years, forms the basis of economic development in the country. However, the country's economy will be diversified in the future. From this point of view the role of the middle class is important," Mammadov added.

Economic Development Ministry official Zaur Gasimov said measures aimed at supporting small and medium enterprise in Azerbaijan will accelerate the formation of a middle class.

"Azerbaijan is taking comprehensive measures to develop entrepreneurship," Gasimov, head of the ministry's Department for Entrepreneurship Development Policy, said. "Around 284 enterprises have been built in the country over nine months, and around 444 more are being built. While supporting small and medium entrepreneurship, we will speed up the formation of a middle class, which is a very large consumer, investor and taxpayer group."

Chairman of the parliamentary committee on economic policy, Ziyad Samadzade, stressed the need to consider amending the legislation and the Tax Code in order to accelerate the formation of a middle class in Azerbaijan.

"A new economic system has been rapidly formed in Azerbaijan," he said. "The fact that a middle class has not formed in the country is not the fault of the system. The share of the private sector in Azerbaijan has reached 80 percent, which has not happened anywhere in the world for 20 years. Formation and strengthening of the middle class is a process that takes time."

Vusal Gasimli, a department head at the Centre for Strategic Studies, said that Azerbaijan may become the fastest developing country by 2030.

"The population's income volume is progressing in Azerbaijan, and the poor strata are transformed into the middle class. Now it is necessary to maintain the pace of income growth to expand the middle class," Gasimli underscored.

"Studies show that the phase of accelerated economic development starts in a country with per capita income between $5,000 and $10,000. Given the current trends, by 2030 Azerbaijan may lead the list of fastest developing countries," Gasimli said.

The World Bank's senior economist for Azerbaijan, Rashmi Shankar, welcomed the reduction of poverty in Azerbaijan, saying the amount of per capita income will reach $20,000 in the country in the near future. Shankar said Azerbaijan has all the conditions necessary to reach this goal.

"Much attention is paid to the private sector in Azerbaijan, particularly small and medium-sized entrepreneurs and creating new jobs mainly in the non-oil sector of the economy," Shankar said.

She also noted that Azerbaijan should continue to focus on economic diversification for growth of the population's income.

"Azerbaijan should expand its middle class, because the shaped-up middle class will contribute to the development of the country in the future," she added.

Shankar stressed that the middle class is a driving force which serves development in the social sphere, as well as economic and political stability. According to her, the middle class should be closely involved in the economy.