Zakhid Mamedov: “Azerbaijani IT-companies export production at the South Caucasus markets”

The doctor of economic science of Russia, Turkey and Azerbaijan, professor, head of the macroeconomic research center ForexClub (Azerbaijan), Zakhid Mamedov, spoke to VK about the results of the year in the economic sphere of Azerbaijan.

-          What developments in the economic sphere of Azerbaijan can you detach in 2011?

-          In 2011 two trends have coincided: the achievement of a high level of state revenues and the growth of citizens’ activeness. Increase in state resources and private incomes of people caused growth of demand for a new living standard. In 2011 we saw various initiatives by Ilham Aliyev in this direction. First of all, it is anti-corruption campaign in the sphere of state services – education, medicine, the police. Secondly, great attention was paid to youth policy (the state program Azerbaijani youth in 2011-2015). Thirdly, programs of regional development. Fourthly, development of the conglomerate Baku-Apsheron (the state program of social-economic development of Baku and its suburbs in 2011-2013). Fifthly, development of city infrastructure, transport and tourist complex of Baku ahead the music contest Eurovision 2012.

Today Azerbaijan is the strongest country of the region. 75% of the South Caucasus economy is forming in Azerbaijan. The demographic situation in Azerbaijan is favorable. Our natural resources empower us.

This year the gas deposit Umid was opened. Its capacity is 200 billion cubic meters. This fact launches Azerbaijan at a new level of geoeconomic importance in the context of transforming the country into one of guarantees of security for Europe.

Construction of roads, connecting north and south, east and west, is taking place. Baku-Tbilisi-Kars railway is being built.

Success of economic reforms in Azerbaijan in a short term explains ambitious forecasts on future development of the country. In 2025 Azerbaijan intends to come close to the group of high-income countries, according to qualification of the World Bank.

-          What branch in the economic sector was at the highest level? And what non-oil sphere yields the biggest profit to the state?

-          The Azerbaijani government understood all dangers of Dutch disease at the earliest stage of implementation of oil contracts in the late 1990s. It has done its best to improve alternative scenarios of economic growth. Strategic foreign exchange reserves of Azerbaijan counted up to $40.5 billion in 2011. Since 2003 after gaining first major oil revenues the resources of the state were allocated for development of the country’s infrastructure. Construction of roads, schools, improvement of cities and villages’ capacities, development of information technologies and telecommunications began.

As for the economic policy of contemporary Azerbaijan and the modernization course, we should touch on the sphere of information and communication technologies (ICT). Azerbaijan has the biggest dynamic of development in the sphere among the CIS countries. According to the index of the United Nations e-Government Survey, Azerbaijan took 82th place among 192 countries, and 68th place among 157, according to the index of e-participation. Azerbaijan intends to increase revenues from ICT up to the level of oil revenues. This target should be achieved by 2025. The ICT industry will play the leading role in enhancing of the service spheres’ share in GDP of Azerbaijan. National IT-companies are not only successfully involved in national projects, but also export their production at the markets of the South Caucasus, Central Asia and other countries of the former Soviet space.

-          In the nearest years the government plans to establish about 800,000 working places. What major enterprises were opened last year?

-          When throughout the whole world working places were closing and employment issues were relevant, new working places were being established in our country. Workforce demand is becoming intellectual and professional. Thus, people should invest in knowledge and skills. This is a positive process, as the structural changes in the Azerbaijani economy lead to a situation when supply and demand are not equal.

Reviving the metallurgic complex is not the only direction of the dynamically-developing non-oil sector of the economy. The country implements major industrial projects, including shipbuilding, three concrete plants, a new international sea port and a new terminal at the Heydar Aliyev international airport. Railways are being reconstructed. In 2011 about 80 industrial facilities were opened. 90 more industrial facilities are being constructed at the moment.

The biggest growth is seen in the sphere of precious metals production, the food industry, chemical production, electric energy, electrical equipment, and so on.

To be continued

Interview by Ramin Naziyev, Baku. Exclusively to VK