BAKU, Azerbaijan, February 10. Baku has held the presentation of the 2024 World Development Report (WDR), the World Bank's annual global report, Trend reports.
This year’s report, titled "Middle Income Trap", offers an in-depth look at the challenges and opportunities faced by developing countries as they work to avoid the middle-income trap and move toward high-income status.
The event focused on the key messages of the WDR, with particular attention given to Europe and Central Asia. Since Azerbaijan is a high middle-income country aiming for high-income status, the discussion was expected to be especially relevant. It gave policymakers and experts a chance to share ideas on economic development in Azerbaijan, exchange lessons learned, and consider the WDR’s findings and their implications for future policy.
The presentation featured high-level plenary and panel discussions with representatives from the Azerbaijani government and senior World Bank officials. Distinguished participants include Ivailo Izvorski, Chief Economist for Europe and Central Asia; Asad Alam, Regional Director for Economic Development; Rolande Pryce, Regional Director for the South Caucasus; and Antonio Nucifora, Regional Manager for Economic Policy.
The World Bank (WB) regional director for the South Caucasus Rolande Pryce noted that the development of human capital is a critical factor for Azerbaijan's economic growth.
Addressing the event, Pryce emphasized that while Azerbaijan has made significant strides in utilizing its natural resources, the country’s ambitions go beyond that.
"In 1993, Azerbaijan's per capita income stood at just $110. By 2023, the country had transformed into a middle-income nation, with per capita income soaring to $6,660—60 times higher—according to the Atlas method for GNI per capita. This remarkable growth is largely due to Azerbaijan's effective use of its natural resources. However, the country’s ambitions go far beyond this achievement. To attain high-income status, Azerbaijan must not only attract significant physical investments but also focus on the development of human capital, retention of talent, and institutional strengthening, all of which are essential for diversifying its economy," she said.
She also pointed out the challenges faced by many countries, especially in their transition from middle-income to high-income status.
"Since the 1990s, only 34 middle-income countries have successfully made this leap. The remaining 108 countries, by the end of 2023, remain stuck in the middle-income trap. Since 1970, the average per capita income in these nations has consistently remained below 10 percent of the US per capita income," she added.
Additionally, Pryce noted that achieving high-income status is becoming increasingly difficult due to rising debt levels, aging populations in developing countries, and the growing protectionism in developed economies.
The World Development Report has been published annually by the World Bank since 1978, providing in-depth analysis of various aspects of economic development. These reports remain the World Bank’s most significant contribution to the global discussion on development challenges.
Assistant to the President of the Republic of Azerbaijan and Head of the Economic Affairs and Innovative Development Policy Department of the Presidential Administration of the Republic of Azerbaijan, Shahmar Movsumov said that Azerbaijan is among 54 middle-income countries.
“This is a very big achievement in a short period of time. Azerbaijan has also strengthened its position as a leading state in the region both politically and economically. At the same time, this strength has contributed to the restoration of our sovereignty, territorial integrity,” he added.
Azerbaijan has undergone a very serious transformation since the beginning of cooperation with the World Bank in 1992. The World Bank has been a very serious partner of Azerbaijan, including active participation in its projects in health and agriculture. The World Bank will remain one of our key partners in supporting innovation in the future.
As is known, more than half of the GDP was lost in the 90s. The long-term modernization strategy was launched in Azerbaijan in 2023. Thus, a golden era of economic development began in the country. During 2024, Azerbaijan's economy achieved a 3.4-fold growth. Increasing diversification is also one of the most important challenges. The share of non-oil sector in GDP was 49 percent in 2012 and now it is 68 percent,” he added.
Azerbaijan's Deputy Minister of Economy Samad Bashirli noted that there are certain challenges with the structure of investments, as state investments still occupy a large share, and to strengthen diversification, it is essential to increase the participation of the private sector in investments.
Addressing the event, Bashirli emphasized the need to take measures to stimulate commercial sectors to avoid the "middle-income trap."
"Only 34 countries successfully transitioned from being middle-income countries to high-income countries as of 1990. Most of them are coastal nations. We need to support our oil industry to avoid the middle-income trap and diversify our economy. Since we do not have direct access to the world’s oceans, this is also one of the obstacles.
We fully agree with the approach to investments, infusion, and innovations. In Azerbaijan, some elements of the second phase related to infusion are already observable, such as the localization of the automobile industry and others. However, its share of GDP is less than 25 percent, and measures need to be taken to increase it.
Increasing private non-oil investments can help avoid the middle-income trap to some extent. In this direction, we are focusing on large local corporations, especially in the banking and service sectors.
We understand that to diversify the economy and foster growth in non-oil industries, changes need to be made in the structure and composition of investments. We must increase the private sector’s share, work more actively with private companies, and involve them in the development of the non-oil sector," he said.
Stay up-to-date with more news on Trend News Agency's WhatsApp channel
