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Economy of Azerbaijan

Azerbaijan has an economy that has completed its post-Soviet transition into a major oil based economy (with the completion of the Baku-Tbilisi-Ceyhan Pipeline), from one where the state played the major role. Azerbaijan's GDP grew 41.7% in the first quarter of 2007, possibly the highest of any nation worldwide. Such rates cannot be sustained, but despite reaching 26.4% in 2005 (second highest GDP growth in the world in 2005 only to Equatorial Guinea), and 2006 over 34.6% (world highest), in 2008 dropped to 10.8%, and dropped further to 9.3% in 2009. The real GDP growth rate for 2011 was expected at 3.7% but had dropped to 0.1%. Large oil reserves are a major contributor to the economy. The national currency, the Azerbaijani manat, was stable in 2000, depreciating 3.8% against the dollar. The budget deficit equaled 1.3% of GDP in 2000.

Progress on economic reform has generally lagged behind macroeconomic stabilization. The government has undertaken regulatory reforms in some areas, including substantial opening of trade policy, but inefficient public administration in which commercial and regulatory interests are co-mingled limit the impact of these reforms. The government has largely completed privatization of agricultural lands and small and medium-sized enterprises. In August 2000, the government launched a second-stage privatization program, in which many large state enterprises will be privatized. Since 2001, the economic activity in the country is regulated by the Ministry of Economic Development of Azerbaijan Republic.

Sectors

Agriculture

Azerbaijan has the largest agricultural basin in the region. About 54,9 percent of Azerbaijan is agricultural lands. At the beginning of 2007 there were 4,755,100 hectares of utilized agricultural area.Azerbaijan's agricultural scientific research institutes are focused on meadows and pastures, horticulture and subtropical crops, leaf vegetables, viticulture and wine-making, cotton growing and medicinal plants. In some lands it is profitable to grow grain, potatoes, sugar beets, cotton and tobacco. Livestock, dairy products, and wine and spirits are also important farm products. The Caspian fishing industry is concentrated on the dwindling stocks of sturgeon and beluga.

Manufacturing

In 2007, mining and hydrocarbon industries accounted for well over 95 per cent of the Azerbaijani economy. Diversification of the economy into manufacturing industries remain a long-term issue. Long with other contracts, Azerbaijani defence industries and Turkish companies, Azerbaijan will produce 40mm revolver grenade launchers, 107mm and 122mm MLRS systems, Cobra 44 vehicles and joint modernization of BTR vehicles in Baku.

Services

Financial and business services

The GDP growth rates observed in Azerbaijan during last years made the country one of the fastest growing economies in the world. But the banking sector of Azerbaijan has yet to tap the vast growth potential that should be achievable due to the continuation of the high economic growth. For this reason the banking sector remains small in relation to the size of the Azerbaijani economy.

As of 1 April 2010, bank credits to customers is 8.5 bn AZN, which makes 70.5% of bank assets. Special weight of private sector in structure of credit investments is higher than 82% (7 bn AZN)

Telecommunications

In the 21st century, a new oil and gas boom helped to improve the situation in the Azerbaijan's science and technology sectors, and the government launched a campaign aimed at modernization and innovation. The government estimates that profits from the information technology and communication industry will grow and become comparable with those from oil production.

Azerbaijan has a large and steadily growing Internet sector, mostly uninfluenced by the global financial crisis; rapid growth is forecast for at least five more years.

Tourism

Tourism is an important part of the economy of Azerbaijan.

The government of Azerbaijan has set the development of Azerbaijan as an elite tourist destination a top priority. It is a national strategy to make tourism a major, if not the single largest, contributor to the Azerbaijani economy.



This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Economy Of Azerbaijan"

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