By Nigar Abbasova
Azerbaijan, which experiences no shortage in foreign investments, intends to continue its reforms on the improvement of business-climate in the country.
The executive director of the Center for Analysis of Economic Reforms and Communication Vusal Gasimly, made the remark, while addressing the meeting dedicated to the development of the strategic road map of the national economy.
“The centre is currently estimating the necessary volume of investments, required for the economy of the country. Investment demand of the world currently amounts to $3.9 trillion, the annual volume of investments, however, stands at the level of $1.4 trillion. Therefore, world economy faces shortages worth some $2.5 trillion. Moreover, only 2-3 percent of investments fall to a share of countries with transitional economies, while the rest volume accounts for developed ones. Azerbaijan has managed to exclude shortage and reforms pursued in the country will not allow its appearance in the future.”
Gasimli said that investment vector is closely connected with the development of intellectual capital, adding that double increase in the number of universities, for instance, may lead to the four-fold growth of the GDP.
He mentioned that the country fixed difference between actual output of its economy and its potential GDP in 2015. The process, also known as output gap is usual for the countries with rapidly developing economies.
“The difference between actual and potential output (the maximum amount of goods and services an economy can turn out when it is most efficient) is conditioned by the economic growth of the country in the last 20 years. The difference opens additional opportunities for the switch to a new economic model,” he clarified.
Commenting on the strategic road map, which is currently under development, Gasimli said that old economic model, formed by means of oil revenues, paved way for the transition to a new economic model.
“The document covers three essential issues, including attraction of investments, entrance to the market, as well as formation of the intellectual capital. We possess necessary instruments of economic policy such as fiscal and monetary policy, to implement work on these directions.”
Gasimli said that sufficient level of strategic reserves, which amounts to some $40 billion, provides the country with comprehensive margins of maneuver.
“The volume of strategic currency reserves exceeds the GDP of the country. Our estimates show that the business has good opportunities for accumulation of funds. Moreover, we receive support of the State Oil Fund (SOFAZ). Therefore, the country is not expected to face any problems with its external debt,” he said.
Meanwhile, the strategic currency reserves of Azerbaijan have exceeded the external debt of the country by 4.4 times and amounted to more than $38.3 billion in the first half of 2016.
Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova
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