From ancient land of fire to modern powerhouse
Standing at the crossroads of Europe and Asia, Azerbaijan has been the world’s fastest growing economy over the past decade and is set to become a key regional partner for the west.
October 9th, 2013
Azerbaijan is a name that conjures images of the exotic but until recently was little known. However, this republic in the Caucasus is becoming a rising star on the international stage and is developing into a key energy, security and trade partner for Europe.
In 2012 Azerbaijan’s booming capital Baku played host to the Eurovision Song Contest and in 2015 will host the inaugural European Olympic Games. A non-permanent seat on the UN Security Council has given it further international standing while a series of oil and gas pipeline projects and ICT and transport corridors look set to place Azerbaijan firmly at the junction of east and west.
Finally sealing its independence in 1991 with the break-up of the Soviet Union, Azerbaijan, under its former national leader Heydar Aliyev, began using its vast oil and gas wealth to set the country on a new path to rapid growth and development. Between 1995 and 2012, US$144.4 billion was invested in the country, with almost half coming from foreign investors – the large majority of them British. But with over 7 billion barrels of proven oil reserves, what steps is the government taking to re-invest the oil wealth in emerging sectors and ensure the nation’s future wealth?
In 2003 current President Ilham Aliyev spoke of the need to turn oil capital into human capital with ICT, infrastructure and education pushed to the forefront of the government’s agenda. The figures have been astonishing: over the past decade Azerbaijan’s GDP has more than tripled, with a 34.6 percent growth in GDP registered in 2006 alone. This year it came 39th out of 144 countries in the World Economic Forum’s Global Competitiveness Report and has been ranked 1st among CIS countries four years in a row.
Today, the nation is undergoing a transition from a purely oil-based economy to one which encompasses agriculture, industry, culture, tourism and much more. Europe’s investors are already taking note: Anglo-Asian Mining has developed the country’s first operating gold and copper mine, while shoppers in Baku can buy clothes from both Debenhams and Stella McCartney. Meanwhile, the country’s tourism sector received a massive boost after it hosted the Eurovision Song Contest. With nine of the world’s 11 climatic zones, almost anything can, and does, grow in Azerbaijan – a boon to farmers, while solar panel and wind turbine makers are eyeing the government’s incentives for the production of renewable sources of energy.
Azerbaijan has shaken off its Soviet past to become an exporter of peace, security, stability and tolerance in the region through dialogue, engagement and cooperation. Today, its goal of obtaining developed country status by the mid-2020s looks ever more achievable.
Azerbaijan strengthens its position with the EU
Azerbaijan and the EU are tipped to sign an agreement on strategic cooperation in a number of spheres, including visa system facilitation and readmission, during the Eastern Partnership (EaP) summit, which will be held in Vilnius, Lithuania on 29th - 30th November.
The EaP is an EU initiative directed at six countries of Eastern Europe and the South Caucasus: Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine and aims to tighten the relationship between the EU and the Eastern partners by deepening their political cooperation and economic integration.
Visa facilitation and readmission is a step preceding visa liberalisation, which relaxes visa requirements so that certain groups, like students and businesspeople, can obtain multiple-entry visas.
As well as the visa deal, Azerbaijan and the EU are set to sign a protocol expanding the country’s participation in EU programmes, as well as an agreement on cooperation between the agencies of Azerbaijan and the EU. This will contribute to institutional reforms and staff training in the country.
Azerbaijan takes on the UN Security Council presidency
This month, Azerbaijan takes on the UN Security Council presidency for the second time since becoming a non-permanent member in January 2012. The presidency of the Council is held by each of the members in turn for one month, and the country hopes its turn at the helm will give it the opportunity to make itself better known globally and increase its reputation.