By Leman Mammadova
The World Bank (WB) has an exceptional role on the projects implemented within agricultural reforms in Azerbaijan, which aim to increase productivity and competitiveness in this sector.
WB positively assesses the progress of implementing the Agricultural Competitiveness Improvement Project (ACIP) in Azerbaijan, the bank’s report says.
"Good progress continues to be made with implementation of the animal disease control program and upgrading the veterinary education. The project is initiating establishment of the Animal Identification and Registration System. Twelve value chain sub-projects approved and eight are under implementation," reads the report.
Project investments in research and variety development program, and seed production and processing have already resulted in improving the quality of seeds and overall seed production capacity, according to WB. Some 50 investment sub-loans in a wide range of agribusiness activities have been issued. Beneficiary agribusinesses report sizeable growth in outputs and the project objective remains achievable.
The project, which is expected to last until 2020, aims to facilitate the access of agricultural producers to markets by strengthening sanitary and phytosantiary services, enhancing selected value chains, and providing financial services to agribusiness enterprises.
The project contributes to further development of agribusiness and food industry through the provision of loans to improve technology, increase production, and modernize phytosanitary and veterinary services. The project also contributes to improving the regulatory and institutional framework in the field of food safety and quality.
The ACIP was approved in 2013. The Bank has so far allocated $19.54 million (57 percent from the WB share in financing the project) to Azerbaijan for the project. The total cost of the project is $53.25 million, and the WB share is $34.5 million.
Azerbaijan has been cooperating with the World Bank since September 1992. The Bank's local representative office in Azerbaijan was opened in 2016.
Most of the international organizations providing financial aid to Azerbaijan are part of the World Bank. After the gaining of independence, the WB was helping to overcome a number of challenges facing Azerbaijan. WB has supported Azerbaijan in implementing critical structural reforms to help stabilize the economy after a long-lasting contraction.
Cooperation between Azerbaijan and the World Bank is multidimensional, covering infrastructure, agriculture, transport and other areas. The projects implemented in the relevant fields with the financial and technical support of the WB play an important role in the development of these areas.
WB cooperates with Azerbaijan within the Country Partnership Strategy. The Bank’s Country Partnership Strategy for 2016-2020 for Azerbaijan aims to support the country on its path to sustainable, inclusive, and private sector-led growth. The program mainly focuses on the public sector management and service delivery, and economic competitiveness.
Over the past years, the Bank allocated loans for the implementation of over 50 projects in the country worth over $3 billion. Seven new projects worth about $1.5 billion are being implemented.
Besides the loans, WB allocated 45 grants to Azerbaijan totalling $41.57 million in 1995-2014.
The Bank mainly focuses on development of the non-oil sector of Azerbaijan's economy. Today, WB supports such areas as agriculture, healthcare, support for the development of rural areas, projects for the reconstruction of main roads, as well as the implementation of the e-court system in Azerbaijan.
WB also plans to take part in the program on the implementation of mandatory medical insurance system in Azerbaijan, as well as in the reconstruction of the Baku-Astara railway.
Agriculture is important for providing ecological balance, raising the level of socio-economic development in rural areas and protecting rural lifestyle, although its primary function is to produce foodstuffs and raw materials. WB has proposed five solutions for the development of agriculture in Azerbaijan. The solutions offered by the Bank envisage using the accurate agricultural technologies suitable for local risk management strategies and climate, facilitating the access of small farms to the markets, diversification of export markets, increasing food security and enhancing education in this area.
By 2017, WB’s total commitment to Azerbaijan was $3.4 billion, while the cost of nine projects completed in agricultural sector was $380.4 million.
WB expects that Azerbaijani economy will grow by 3.3 percent in 2019, 3.5 percent in 2020 and by 3.7 percent in 2021. Azerbaijan’s economy expanded at a moderate pace in 2018 aided by stable oil production and a modest pick-up in domestic demand, as higher oil earnings boosted fiscal spending and real wages rose, WB said. As a result, real GDP increased by 1.4 percent in 2018.
Leman Mammadova is AzerNews’ staff journalist, follow her on Twitter: @leman_888
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