Baku Energy Forum - Azerbaijan and economic diversification: the country turned into a regional power in just a decade

Azerbaijan and economic diversification: the country turned into a regional power in just a decade



An amazing article about Azerbaijan was published at the French website Afrique –

It is of interest first of all, because it was written by the Frenchman who visited Azerbaijan for the first time. It is also encouraging that this journalist describes what he saw objectively, without distortion. Below is a shortened version of the article.

The Caucasus region seems to be a distant place for the French. However, it is with this country that France maintains relations which go back a long way. It is no coincidence that in 2017, President of Azerbaijan Ilham Aliyev was invited to the Elysee Palace by former French President Francois Hollande. And two years earlier in 2014 the French President took part in the inauguration of the French Lyceum upon his arrival in Azerbaijan. There he made a statement, which, later, was immortalized at the entrance of the Lyceum building: "Relations between the two countries are ancient."

Azerbaijan is a steadily developing economic leader of the region, which was not that some thirty years ago. Azerbaijan also owes its development to a special geographical location. Boasting rich oil and gas resources, the country borders on Iran, Georgia, Turkey, Russia and Armenia. Azerbaijan is at war with the latter. In 1994, Armenia occupied the Nagorno-Karabakh region, as well as the surrounding regions of Azerbaijan. In order not only to survive, but also to thrive in the environment of these countries, Azerbaijan could rely only on its natural wealth. Unlike other oil-rich countries, Azerbaijan has made a choice in the direction of economic diversification. And thanks to this risky and unordinary move, today Azerbaijan is developing steadily, despite the economic world crisis.

Despite the billions spent on the war between the two countries, one million Azerbaijani refugees and 6,000 killed soldiers, the tormented Baku has not locked itself up in this war, and does not live alone with it, although Karabakh remains an open wound. Had this conflict occur now and had it not been for the Russian interference in the course of the war, the alignment of forces and the whole picture would be different.

Despite its dizzying development, the representatives of the Azerbaijani authorities understood the whole ephemerality of the present moment before the trials of time. Unlike the countries of the Persian Gulf, except the UAE and Qatar, Azerbaijan understood that it is necessary to strive for sustainable development. Azerbaijan joined the United Nations, the OSCE, the Council of Europe, became a partner of NATO, the Organization of Islamic Cooperation and the World Bank not only for political reasons, but also from an economic point of view, since the country has seen an increase of 21% over the period from 2003 to 2007.

Azerbaijan in the geopolitical context

The country has invested heavily in a major pipeline construction project, which, ultimately, will connect Baku-Tbilisi-Ceyhan with Europe and will become a worthy alternative to Russian oil. Unfortunately, the work has recently stopped 12 km from the Italian borders for environmental reasons. Over time, the oil sector has been the main driving force for the country's development. Despite the fact that the country keeps pace with the leading oil groups of the Caspian Sea, today the situation has changed: Azerbaijan, which has an ambitious vision, strives to diversify its economy, attract foreign investors, encourage and help export local products. While in 2007 the share of the oil sector fell to 40-60% of country's economy, in 2016 the oil sector constituted only 34-66%.

Azpromo is a state entity that plays an important role in supporting the diversification of the country's economy. Established in 2003, Azpromo provides direct support to the development of foreign investment and exports. This organization is responsible for identifying public and private projects that deserve support, studying markets, facilitating business registration and licensing. It supports the agricultural sector, which involves 40% of the working population of the country. Thanks to Azpromo's efforts for the period 2016-2017, Azerbaijan participates in major international economic forums in Russia, the USA, Germany, Australia or Ukraine.
Agriculture in Azerbaijan is developing very dynamically. The country is known for its products, such as hazelnuts, tomatoes, pomegranates, which are exported all over the world from the USA to New Zealand. Wine also gains reputation far beyond the Caucasus. But this is not all: the country relies on its heavy industry, logistics and trade, financial services, high technology.

The conquest of international markets is carried out thanks to Azpromo, and work with each continent is different. The European Union is an economic partner for Azerbaijan's choice, even in spite of still existing barriers, such as the 2006 energy partnership, and negotiations on an association agreement. Russia is the largest importer of non-oil Azerbaijani goods. The US market is much more complicated, because it is very competitive, but Baku does not give up.

Azerbaijan is increasingly becoming the original tourist destination in the world. Baku organically absorbs European modernity and the culture of the country's ancestors. On the one hand, the so-called Old City preserves the Ottoman heritage with the presence of religious monuments, from the synagogue to the Armenian church. On the other hand, the greatest international architects decorated Baku with unique futuristic structures. An example is the Heydar Aliyev Center, named after the father of the independent nation and created by Zaha Hadid, or the Flame Towers, and the Fairmont Hotel. In 2016, the world famous Trip Advisor website declared Baku one of 10 destinations of the year.

At present, tourists from Russia, Georgia and Iran are the most numerous visitors to Azerbaijan. Over the past year, Azerbaijan hosted 6,697,000 tourists from Russia, 4,405,000 from Georgia and 232,700 from Iran. In the future, Azerbaijan will strive to expand its tourism. Due to its situation between Europe with Asia, an increasing number of Chinese, Japanese and Indians are eager to visit Azerbaijan.

Azerbaijan is also a multilingual center of various civilizations. Thanks to its historical past almost everyone in this country understands and speaks Russian. During the years of independence, English and French languages ​ added to the Russian language. Despite the irrefutable presence of the English language, the interest in the French language is growing The process has gone so far that the trips of French teachers are organized to the country and the number of those studying French is growing rapidly.