Azerbaijan has made significant strides toward economic diversification, with the non-oil sector now accounting for 68% of the nation’s GDP as of 2024, up from just 49% back in 2011. This shift reflects long-term efforts by the government to build a more balanced and sustainable economy, particularly amid several challenges faced by the country.
Shahmar Movsumov, Assistant to the President of Azerbaijan and head of the Department of Economic Issues and Innovative Development Policy within the Presidential Administration, made this announcement during the recent presentation of the World Bank's annual global "World Development Report" held in Baku. He noted, "This transformation resulted from efforts to build a more balanced and sustainable economy. The population's welfare has improved, minimum wages, pensions, and employment have increased, and measures were taken to reduce poverty."
Movsumov emphasized the integral role of the World Bank as Azerbaijan's partner since the nation joined the organization back in 1992, stating, "The World Bank has become a very important partner for us. The Bank has provided significant support to projects in agriculture, healthcare, transport, and other infrastructure." Such partnerships have allowed Azerbaijan to transition from being dependent on external aid to becoming a donor to the International Development Association.
Despite these advancements, challenges remain for Azerbaijan's economy. Deputy Minister of Economy Samad Bashirli pointed out during the same presentation, "Azerbaijan’s gross domestic product (GDP) per capita is approximately 40% lower than in high-income countries." This statistic underscored the need for continued growth and development as Azerbaijan strives to improve living standards.
The effort to diversify the economy away from oil dependency has produced tangible benefits for the Azerbaijani population. The increase in the non-oil sector's contribution to GDP indicates not just economic resilience, but also growth across various sectors. By diversifying, Azerbaijan aims to reduce vulnerability to oil price fluctuations — a common pitfall for economies heavily reliant on natural resources.
Underlining the commitment to sustainability, major reforms have been initiated. These include strategic investments in renewable energy, agriculture reforms, and the enhancement of infrastructure, which have contributed to job creation and lifted many citizens out of poverty. Movsumov highlighted the importance of these initiatives, stating, "The population's welfare has improved, minimum wages, pensions, and employment have increased." This dedication to reform is particularly notable against the backdrop of global economic instability.
The World Bank's involvement has also facilitated knowledge transfer and capacity building within Azerbaijan. Through various development projects catered to improving agricultural efficiency, boosting healthcare access, and enhancing transportation networks, the collaboration has proven invaluable for the country’s economic reboot.
Looking forward, Azerbaijan's leadership has indicated plans to continue this diversification strategy to safeguard against economic shocks and promote long-term growth. Future efforts are expected to focus on innovation, technology advancement, and attracting foreign direct investments.
By diversifying its economy, Azerbaijan not only enhances its national resilience but also positions itself as a regional player capable of sustaining growth independent of the oil sector. The progress achieved over the last decade is evident and reflects the strategic vision of its government leaders.
All these factors contribute to shaping Azerbaijan's economic future, paving the way for sustainable development initiatives aimed at improving the living standards of its citizens.
This remarkable transformation, encapsulated by the significant growth of the non-oil sector, showcases Azerbaijan’s determination to evolve beyond its oil-rich past and establish itself as a modern, diversified economy.