Baku is not afraid of lowering oil prices, the government assured the Azerbaijani nation amid concerns over decline in crude oil price in the global market, now hovering around $50 a barrel.
The government of the energy-rich Azerbaijan has long been speaking about the risk of the energy depending economy. It has been searching for alternatives to petrodollars received from the oil and gas export since long time ago.
The government is paying special attention to diversification, as a result of which Azerbaijan’s non-oil economic sectors have grown by 10 to 15 percent over the last two to three years. Relevant programs were adopted at the state level on the development of non-oil sector, which covers mainly agriculture, industry and IT sectors.
Speaking about the development of the non-oil sector, Expert Ogtay Hagverdiyev said it is possible to note some positive aspects, in particular, industrial parks created in Sumgait, shipyard construction, seaport, etc. Such large-scale projects bear fruits and can be an alternative.
“Today, however, there is a need to create high-tech projects that could be beneficial for the whole world,” he told local media.
He noted that the country enjoys huge potential which needs to be implemented as quickly as possible, especially since there are financial opportunities.
Despite the fact that the share of the non-oil sector in Azerbaijan’s GDP already exceeds 55 percent, most of the export potential is linked to oil and gas. Oil, oil products and gas occupy lion’s share in Azerbaijan’s exports, making up 92 percent of the total figure.
“Even in the 90s of the last century, when oil was produced in smaller quantities, the figures were almost the same. Yet we have exported and export metal, aluminum, plastic granules. However, this is not the finished product, but only a semi-finished products and raw materials. We manufacture these products, but do not develop them. For example, with the aluminum we can manufacture the final product and then export it. It is possible to produce aluminum sheets and sell them to someone else. Therefore, today we can begin to engage in knowledge-intensive manufacturing and selling abroad,” Hagverdiyev said.
2014 was declared the Year of Industry and a number of measures associated with the development of industry were taken. In 2015, the government expects to set up a large metallurgical complex. Thus, Azerbaijan will have new products to export, and this will give a further impetus to the economic diversification and development of the non-oil sector.
In the meantime, 2015 was declared the Year of Agriculture in the country, which is expected to give a new stimulus to the development and modernization of agriculture, ensuring a complex and systematic approach to settlement of problems in the agrarian field, involving the government`s administrative and financial resources in this sector, and promoting the country`s agrarian potential.
Azerbaijan plans to export products worth $26.8 billion in 2015, some $2.7 billion of which will be goods of non-oil sector.
“In early 2014, we set the goal of achieving growth in both the gross domestic product and the non-oil sector. These two main objectives have been met. Our economy has grown by about 3 per cent. This is an excellent indicator in today’s world. Some countries have not experienced any growth. In fact, they are registering a decline. In the countries registering growth it constitutes about 1 per cent,” President Ilham Aliyev said at the recent Cabinet meeting.
“Despite the fact that oil prices plummeted at the end of last year, the economy of Azerbaijan has increased by almost 3 percent. It is very delightful that our non-oil sector has increased by 7 per cent. This is a good example of the works carried out in the last few years and a manifestation of our policy. In the future, the non-oil sector will provide chances for even greater economic development of Azerbaijan. The development of the non-oil sector will enable us to achieve a diversified development of the economy and ensure its sustainable development,” he noted
Azerbaijan’s economy, which led the world as the top reformer in 2007/08, with improvements of seven out of 10 indicators of regulatory reform, has increased by about 27 percent and the non-oil sector by 55 percent since 2008 global financial crisis.
The revenues of Azerbaijan’s state budget for 2015 are forecasted at 19.438 billion manats (32.5 percent of GDP). This comes as estimations put the expenditures at 21.1 billion manats (35.3 percent of GDP).
The share of non-oil sector in Azerbaijan’s GDP in 2015 is predicted at 65.1 percent, which is 5.5 percent higher than the forecasts for 2014 and 8.5 percent higher than in 2013. The share of oil sector in GDP for 2015 is predicted at 34.9 percent versus 40.4 percent in 2014.
The real growth of the national economy is expected at the level of 4.4 percent in 2015, and the volume of GDP in market prices will amount to 59.8 billion manats ($76,364 billion).