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Azerbaijan’s 20 years of economic independence:
Is it really independence?
November 29, 2011
Ingilab Ahmadov
SC GDP per capita, dynamics over 20 years (PPP)
2Dr.Ingilab Ahmadov
Source: http://www.economywatch.com/economic-statistics/country/
South Caucasus GDP in 2010
3Dr.Ingilab Ahmadov
South Caucasus international reserves in 2011
4Dr.Ingilab Ahmadov
Oil in Azeri economy (2010)
Robust economic growth in recent years, supported by high oil production and export and higher oil prices
Oil sector’s share in GDP (58%)
Oil sector’s share in Budget revenues (64%)
Oil sector’s share in Export (92,5 %)
5Dr.Ingilab Ahmadov
What gave us 20 years of economic independence?
Positive
• Green light on Western capital coming into economy
• Substantial reconstruction of the infrastructure
• Baku become one of the most beautiful and richest cities of
FSU
• Integration into European and world economy, technology
and management
6Dr.Ingilab Ahmadov
Negative
• Unemployment
• Loss of Soviet industry, agricultural sector
• Loss of robust education system
• Ejection of labor forces
• Scale of corruption
What gave us 20 years of economic independence?
7Dr.Ingilab Ahmadov
Resource abundant economy
Advantages:
• State expansion economy (Keynes)
• Massive infrastructure reconstruction
• Initiator of regional infrastructure projects
• Surplus & international reserves
• High oil & gas prices and gaining momentum for the
expansion of investment abroad
8Dr.Ingilab Ahmadov
Disadvantages:
• Inflation
• Loss of Competitiveness
• Costly/heavy economy
• Lack of job-created economy
• Consumer economy
• Lack of innovation
Resource abundant economy
9Dr.Ingilab Ahmadov
Is it truly sustainable?
• Economy developments as sustainable as long as O&G
resources are enough
• Oil & gas resources are quite enough until 2025
• Oil Fund assets will reach $100 bln. (equal to GDP) by 2025
• Transit resources as an attempted alternative to natural
resources
• SOCAR Black Sea investment strategy
10Dr.Ingilab Ahmadov
Is it truly a market economy?
• Not WTO member
• Monopoly, barrier on access to market
• Old/new economy
• Business, bureaucracy and politics are not
separated
11Dr.Ingilab Ahmadov
Thank You!
12Dr.Ingilab Ahmadov