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Effective policy behind national economic growth amid global crisis

14 April 2022 13:00 (UTC+04:00)
Effective policy behind national economic growth amid global crisis

By Ayya Lmahamad

As a consequence of President Ilham Aliyev’s effective policy, the country has made steady economic growth against the backdrop of the recent global crisis.

Aliyev, who presided over a meeting on the first-quarter results of 2022 on April 12, noted that Azerbaijan’s GDP grew by 6.8 percent in the first quarter of the year, the positive balance of foreign trade turnover exceeded $5 billion and the foreign debt was reduced by more than $600 million. Such positive economic figures were mostly achieved by the effective policy of social and economic development pursued in the country.

Taking into account that the world just now is entering the post-pandemic period, Azerbaijan’s economic growth of 6.8 percent can be viewed as a tremendous achievement. Just for comparison, according to the analysis conducted by the World Trade Organization, the global gross domestic product in 2023 will grow only by 3.1-3.7 percent.

At the same time, Azerbaijan’s non-oil economy has grown by more than 10 percent, growth in industrial production is about 4 percent, and in non-oil industrial production, it is more than 18 percent. These figures show that the country achieves diversification of the economy and reduces dependence on the oil and gas sector.

Earlier, the Azerbaijani government has set a task of sustainable diversification of the economy. In this regard, it is planned to develop a concept that will contribute to the growth of non-oil exports. The volume of the non-oil goods is planned to double by 2025 and Azerbaijan is already on the path to it.

Speaking about the foreign trade turnover, it is worth noting that it has increased by more than 60 percent, and the exports have almost doubled. Even if taking into account the rising oil prices, the non-oil exports have also increased significantly by 45 percent.

As tendencies in the world show, the balance of foreign trade is negative in most countries, as countries import more than they export. Meanwhile, in Azerbaijan in just three months the foreign trade balance has been more than $5 billion, and the country’s exports exceeded imports.

The food prices are also one of the points that are worth touching upon. The process of food prices rising sharply in the world began several months ago. The Russian-Ukrainian war has accelerated this process, especially given that Russia and Ukraine are among the world’s leading grain exports.

In accordance with Ilham Aliyev’s instructions and relevant decisions of the government in this direction, measures are being taken to increase domestic security. The relevant measures are consisting of three directions. First of all, the government monitors daily warehouse balances on food, flour, powdered sugar, and a number of other products. The second direction is legislative regulation, in other words, the export of products that are not produced in Azerbaijan and are highly dependent on imports is carried out under a special control regime. And the third direction includes the work with business. In this regard, a total of AZN 115 million ($67.6m) will be allocated as soft incentive loans to businesses, as well as the mechanism of successful use of strategic food products during the pandemic.

Continuing the course of measures taken to prevent artificial price increases, Azerbaijan also strengthens anti-inflation measures. The country’s overall inflation rate is 12.2 percent for the first three months, while the food inflation is 18 percent. It is worth noting here that imported food accounts for more than 60 percent of inflation.

Taking into account the rising food prices and inflation, Azerbaijan is set to increase its production of food wheat. Currently, Azerbaijan’s total grain production accounts for 60 percent of the country’s demand. The goal is set to provide the country with at least 7-75 percent of food wheat. Although the geographical location and climate, as well as the quality and conditions of the soil in some places, do not allow the country to be 100 percent self-sufficient in wheat, Azerbaijan is totally capable of reaching the set goal as there are a potential and opportunities to achieve this, both in the liberated lands and elsewhere in the country.

Additionally, in recent years, there have been a lot of investments in Azerbaijan and a lot of enterprises were put into operation, which today diversify the economy. In the coming years, Azerbaijan’s economy is expected to grow and strengthen even more thanks to the effective policy pursued by the country’s president and the ongoing large-scale reconstruction work carried out in Azerbaijan’s liberated lands.

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Ayya Lmahamad is AzerNews’ staff journalist, follow her on Twitter: @AyyaLmahamad

Follow us on Twitter @AzerNewsAz

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