Mehmood Ul Hassan Khan
According to latest published report of the World Economic Forum entitled “Global Competitiveness Report 2016-2017”, the Republic of Azerbaijan rated the best among the Commonwealth of Independent States (CIS).
It once again reaffirmed the values of constant economic liberalization, privatization, market economy, reforms in banking and financial sectors and the last but not the least massive diversification of available human and industrial resources in the country. It also acknowledged visionary leadership of Azeri President H.E. Ilham Aliyev which he used for achieving higher rates of socio-economic development, industrialization and above all a sustained economic growth the country for the last so many years.
Overall it was ranked 37th in the world. The said report covered 138 countries. Azerbaijan ranked the 40th among 140 countries in the previous report. Even Russia was ranked 43rd and Kazakhstan 53rd place. Azerbaijan’s global competitiveness index is 4.6 out of maximum 7 scores.
Despite substantial decrease in oil prices, Azerbaijan successfully managed the upward pace of macro-economy and heavily invested in education, human resources and tremendously improved business environment. It also effectively activated goods market efficiency and generated diversified but integrated business activities in the country which supported its macro-economy. Despite ongoing lower oil prices, its economy is more diversified, smarter, stable and sustainable.
Azerbaijan is one of the ideal hubs of doing businesses and seeking investments in the world. It is paradise for investors, businessmen and joint ventures in the CIS and beyond. Keeping in view its constant business/investment oriented initiatives, the WEF report 2016 raked it 3rd for the number of procedures required to start a business, 9th for time to start a business, 18th for the level of women’s participation in the labor force, 39th for macroeconomic environment, 36th for the strength of investor protection, 33rd for the number of internet users, 44th for innovations, 41st for the government debt and etc.
Moreover, Georgia ranked 59th the ranking, Tajikistan 77th, Armenia 79th, Ukraine 85th, Moldova 100th and Kyrgyzstan 111st which clearly showed Azerbaijan superiority in terms of constant reforms, economic dividends, pro-business/investments policies and above all sovereignty of its State to protect the interests of local as well as international businessmen and investors alike. It also confirmed the high levels of productive channels, taxation system, economic intermediators which are truly knowledge based and smarter. Moreover, its national drive of green energy and diversification of energy mix has already transformed it an ideal hub for all kinds of foreign direct investments and joint ventures.
Now its macro-economy is strong, stable and sustainable. Its oil & gas sector is productive, robust and lucrative. Its services sector is healthy and attractive. Its industrial sector is in its best levels. Its banking and financial industry is flouring and providing crucial imputes to its domestic industries as well as global partners.
Most recently, Azerbaijan Economy Minister stressed that the country is able to neutralize negative effects of the external factors on its economy; therefore, it is not going to reconsider the state budget forecasts for 2016. Public budget revenues in 2016 are expected to reach 16.822 billion manats ($11.202 billion), while the rate of expenditures will amount to 18.495 billion manats ($12.316 billion). The budget deficit is expected to be at the level of 1.673 million manats ($1.109 million) which stands for 2.9 percent of the GDP.
Azerbaijan’s President Ilham Aliyev signed an order on the preparation of the draft economic development strategy and the action plan for 2016-2020, the draft long-term review for the period until 2025 and the draft review of objectives for the period after 2025 in March 2016. For achieving these high rates of socio-economic development, has already been created to improve development plans in accordance with the “Main Directions of Strategic Roadmap on National Economy and Major Sectors of Economy”.
The series of new reforms will mainly cover four directions: the creation of a sustainable macroeconomic environment in the country, reducing transaction costs of business, ensure wide access to investment and financial services, the creation of a flexible and effective legal reform. The implementation of these new reforms would further strengthen its comparative advantage in the CIS and beyond. It would enhance its international trade. It would accelerate inflows of FDIs and FPIs in the country. It would further stabilize its currency management and boost to its banking and financial industry.
Most recently, Azerbaijan Finance Minister also briefed about different economic estimations for the 2016-17 which would further nullify negative effects of the external factors. It also highlighted about the economic plan of 2017. The country has already prepared forecast indicators of the state budget and a draft concept of the socio-economic development for 2017 and subsequent three years, he added. Finance Minister said that oil price has been set at $40 per barrel in Azerbaijan’s draft 2017 state budget, mentioning that the budget expenses will be reduced in 2017. He hinted some policy adjustments in the expenses and revenues policies during 2017. It would establish optimization of expenses. Moreover, the country has also prepared two additional scenarios for forecasting the state budget given the price at $35 and $45 per barrel.
The parameters of the state budget for 2016 were based on oil price standing at $25 per barrel, which was mainly connected with the decline in oil prices, which in turn sharply reduced the projected revenues of the state and consolidated budgets, as well as devaluation of the national currency and transition to a floating exchange rate.
He also talked about different policies to maintain financial balance during 2016-17. He also mentioned different policy initiatives to maintain optimal currency parity against green basket.
According to economic development plan of 2017, the government will support entrepreneurship by allocating funds for the support of entrepreneurship in the country, while the volume of funds, allocated from the budget for the National Fund for Entrepreneurship (NFES) in 2017 will remain at the level of the current year. The funds will contribute to the involvement of a greater number of entrepreneurs in the economy that, in turn, will lead to its further growth. Credit facilities mechanism will be business and investment friendly.
Most recently held referendum in Azerbaijan would further strengthen its socio-economic development and would also provide all pro-business/investment policies in the country. Continuation of the macro-economic policies as guided as its visionary leader President H.E. Ilham Aliyev is the secret of its rapid economic development which has already transformed it the MOST COMPETITIVE IN THE CIS.