...

Non-energy sector can be engine of Azerbaijan’s economic growth – WB

Business Materials 19 December 2022 15:55 (UTC +04:00)
Laman Zeynalova
Laman Zeynalova
Read more

BAKU, Azerbaijan, Dec.19. There is a need to shift to the non-energy sector as an engine of growth in Azerbaijan, Antonio Nucifora, Practice Manager for the Macroeconomics, Trade and Investment in Europe and Central Asia Region of the World Bank Group, said in an exclusive interview with Trend.

Nucifora pointed out that the “Azerbaijan 2030: National Priorities for Socio-economic Development" clearly sets a vision for a healthy, dynamic private sector as the center of the growth model of the future for Azerbaijan.

“We argue very much that there is a need for a fundamentally new growth model which is driven by dynamic, non-energy, non-oil and gas private sector. This is going to be critical to ensure that the growth will continue. There is a need to shift to the non-energy sector as an engine of growth. Azerbaijan has got a very pervasive presence of the state with state-owned enterprises in almost every sector of the economy, which is very unusual,” he said.

Nucifora believes that there is a need to shift to a more productive model.

“And to do this fundamentally, one needs to enable the private sector to operate on a level playing field, to have an environment and to have also the human capital skills which are needed to be able to grow and compete. Shifting to this new growth model with private sector at the center is going to be fundamental. Azerbaijan is well positioned with a strong energy sector contributing to the economic growth. Over the past 25 years, the growth performance of Azerbaijan has been impressive, the poverty has been reduced dramatically from 50 percent to 5 percent. But looking ahead, Azerbaijan has realized that the world is changing and is backing on green economy amid the commitments to fight the global climate change, the policy of transition towards renewables, and net zero emissions,” he added.

Nucifora noted that among energy producers, Azerbaijan is well positioned as a country transporting gas to Europe, since natural gas is a much cleaner mean of producing electricity.

“It generates roughly half the carbon emissions from coal and produces less particulate matter. Therefore, natural gas is likely to play a role of a transition fuel, helping bridge the transition to a zero-carbon economy. In this sense, with the memorandum of understanding signed between Azerbaijan and EU to double the gas supplies, the country will ramp up natural gas production. It will boost the country’s economic growth in the medium term. But what also remains important, however, is looking at the longer-term perspective. The demand for natural gas will last longer than other fossil fuel-based sources of energy, but since ultimately, we're moving towards renewable energy, the demand for natural gas will also subside. Therefore, looking ahead, the critical point remains the need to move to a new growth model which is driven by a dynamic non-energy private sector,” he added.

---

Follow the author on Twitter: @Lyaman_Zeyn

Tags:
Latest

Latest