“How do you see your country’s economy shaping in the next 20 years?”

By Kamran Azizli

Azerbaijan enjoyed the boost of huge oil revenues for a full decade after the 1,760-kilometer-long (about 1,100 miles) Baku–Tbilisi–Ceyhan (BTC) pipeline began operating in 2005. However the low price of oil has hurt the Azerbaijani economy particularly badly. Throughout 2016, almost all of Azerbaijan’s economic indicators have been on a downward curve. Oil export rates have fallen. But now, Azerbaijan is entering a new historical phase. The oil boom which boosted the economy has ended. The end of Azerbaijan’s energy boom requires economic reforms. Statistics and forecasters give optimistic prediction about the future of economy in the country. Future development plans are mainly focused on the development of non-oil sector considering the natural resources of the country. The future perspectives of economy are tourism, agriculture, and IT field for development beside oil and gas industry in the next 20 years.

Tourism

Tourism industry is crucial for diversification of the country and development of regions in the case of Azerbaijan. Competitive opportunities of Azerbaijan are very high in tourism. Our natural resources, colourful climate, rich historical and cultural heritage are an important platform for creating attractive tourism products. At the same time, the Azerbaijani government has stated that the development of the tourism sector as a priority for the non-oil sector of the economy in the next 20 years.

Azerbaijan is paying special attention to the development of tourism sector in the economy. Modern tourist and recreation facilities, hotel complexes are being built in the regions of our country, as well as in the capital Baku. The world’s most famous five star hotel brands have come to Azerbaijan during the last several years. All leading hotels of the world are now operating in Baku. The development of tourism once again approves the special weight of this field in non-oil sector.

IT

Expanding opportunities for ICT and establishing a reliable security system for ICT development are key factors in the development of the economy in recent years. The development of this sector creates a flow of investment into the country and becomes a key area in the formation of the state budget. In recent years, Azerbaijan has joined the global aerospace family by launching its satellites – “Azerspace-1” and “Azersky” into orbit. Azercosmos Company has revealed the revenue volume from the country’s first telecommunications satellite Azerspace-1. The company’s income exceeded $50 million since the launch of Azerspace-1 into orbit. Considering high income and opportunities, investors are tended to allocate money in this spare. It is worthless to say that ITC will get great proportion of GDP in next decades for its current trends in the market.

Formation of national standards as a result of ICT development, application of full digital broadcasting across the country and stopping analogue broadcasting as well as 100% of e-government services will be at the centre of attention as one of the main priorities of modern management in Azerbaijan. State authorities are building e-government tools to ensure modern management and increase of transparency. It means that ITC both ensure to acquire monetary contracts and help to regulate total market.

Agriculture

The development of agriculture is one of the priority directions for Azerbaijan to boost the non-oil sector and non-oil exports. The government supports agricultural sector at the state level and implements various agricultural projects aimed at increasing volume of domestic production and decrease dependence on the imported goods.

The agricultural sector is important in Azerbaijan not only to increase export potential, but also to restore and protect the country’s food security.

Experts claim that the population of Azerbaijan is expected to grow to 12.1 million people by 2050, thus increasing the country’s demand for food supplies in the future. Today the country is experiencing some concerns in food safety. Enjoying advantageous geographic location Azerbaijan has all possibilities to increase food security and production in the country. Involving new technologies and modern equipment is of crucial importance for the development of the agricultural sector and food production. However, the application of new technologies and purchase of modern agricultural techniques that require significant resources, to make changes in this area would be possible with the support of the government spending in next 20 years.

Oil and gas industry

The factor of export of hydrocarbons has been the main driving force of economic growth over the past decade. Although country tries to develop its non-oil sector, but oil and gas resources maintain its importance for economy. On September 14 the country signed a landmark agreement with BP and its partners in the Azeri, Chirag fields and the Deep Water Portion of the Gunashli Field (ACG), embodying celebration of a “Contract of the 21st Century”. The agreement on development of Azeri, Chirag and Gunashli oil fields will be extended until 2050.

The current amended and restated agreements on the joint development and production sharing will be effective until the end of 2049 and here is the potential for more than $40 billion capital to be invested in the ACG oil field. There are still billions of barrels to recover and billions of dollars to invest. The country aspires continue to work together to unlock the long-term development potential of ACG through new investments, new technologies and new joint efforts to maximise recovery. So, the country still keeps its fossil resources for long-term investment for its economy.

More about Kamran:

Kamran Azizli is a fourth year student at Azerbaijan state university of economics, in Baku. He plans to build his career in the accounting field, but he is also an amateur writer and photographer. Participating in several social events and volunteering programs, he has had great experience about social, cultural and educational topics. One of his favourites is to research actual issues in community and in the world and share it with his friends and followers on social media. You can get more information about him on Facebook and LinkedIn: @KamranAzizly.

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