Azernews.Az

By Fuad Guliyev

Crisis was a negative development for all oil and gas supplying countries, making them to change the economic scenario suddenly. Energy-rich Azerbaijan had to respond the global recession as well by making several important steps to develop its non-oil sector. The country makes even larger stress on the 2014-2018 State Program on Socio-Economic Developments of the Regions, which aims to reduce the reliance on oil and gas industry.

Anti-Crisis Measures

Azerbaijan made exports of goods and services in total worth of $11.4 billion and imports amounted to $9.2 billion, with positive trade balance being $2.2 billion for 2015. Oil and gas exports amounted to $9.6 billion, while non-oil sector exports were about $1.8 billion.

Crisis made the government to accelerate the planned measures to encourage the non-oil sector. The measures include boosting non-oil exports, replacing imported goods by domestically manufactured products to achieve self-sufficiency, attracting investments, making tax breaks and guaranteeing favorable conditions for entrepreneurs.

High rate of exports of mass consumption goods from Azerbaijan, coupled with devaluation of manat led to inflation and rise in the prices. Trying to keep the prices for bread under control by artificial increase of supply, there was a wheat import of $343.3 million worth, despite of record 2.9 million tons of wheat harvest in 2015. Additionally, added value tax and customs duty were lifted on wheat imports to cut the prices for bread.

In long term it is planned to create large scale farms covering an area of 150,000 hectares in total. Currently 29 large farms cultivate 40,000 hectares.

Tobacco doesn’t act as a social product in government policy, consequently its prices were not regulated causing increase in prices of tobacco products. $297 million worth of tobacco products were imported and 3,500 tons of tobacco was cultivated in 2015 declining from 17,300 tons in 2000.

Another important sector of industry is metallurgy with an imports rate of $1.2 billion. Recently an open joint stock company named Azerbaijan Steel Production Complex was created to orient the industry to exports.

Azerbaijan imported $85 million worth wide variety of chemical industry products for domestic use, despite the fact that Azerbaijan has a developed oil industry serving as a base and there is a chemical complex in Sumgayit to support the production of such products to meet the demand for household chemistry products within the country.

Pharmaceutical imports consisted of $270.6 million. But it is notable that Azerbaijan is trying to organize local production of medicaments in cooperation with foreign firms.

Consumer electronics is another sector with considerable import rate, $777.5 million. Consumer electronics accounts for a significant portion of the $1.6 billion worth equipment imports made in 2015. Azerbaijan has a technical base to produce refrigerators and air conditioners to replace the imported goods.

Ranking high along with efforts to boost domestic industry, one of the goals to be achieved is promotion of the “Made in Azerbaijan” brand to gain the customer recognition.