Investments in Azerbaijan's economy ( First quarter 2012 )

Some 2.099.4 million manat was invested from all financing sources in the development of economic and social spheres in Azerbaijan in the first quarter of 2012, an increase of 6.5 percent compared to the same period of the last year. Especially, in March 2012, 903 million manat was invested in Azerbaijan's economy, which is 22.5 percent more than investments in March 2011. By May 2012 we will see steady growth in investment in capital development due to the growth of construction, rehabilitation and reconstruction work on preparation for the Eurovision Song Contest 2012 in Baku.

The main sources of investments in the first quarter of 2012 are as follows

• funds of enterprises and organizations - 1.049.1 billion manat (a decrease of 2.4 percent compared with January-March 2011);

• budgetary funds - 848.4 million manat (increasing 71.5 percent);

• off-budgetary funds - 37.9 million manat (with a decrease of 19.2 percent),
• bank loans - 101.9 million manat (decreasing by 14.4 percent),
• funds of population - 58.0 million manat (increasing by 11.9 percent)

Apparently, increased investments in the first quarter of 2012 are due to a 71.5-percent increase in public investments, allocated by the state budget for needs of economy.

Share of this type of investments in the country's total investments is 40.4 percent. Public investments are spent within state investment program of Azerbaijan. At present, major infrastructure projects funded by the state - construction of highways, water and sewer projects, gasification, laying power lines, rural roads are implemented in all regions of the country.

According to the data provided by the State Statistics Committee, private enterprises and organizations invested 918.0 million manat (43.7 percent of total investments) in Azerbaijan's economy and public enterprises and organizations - 1.181.4 billion manat (56.3 percent).

According to the State Property Committee of Azerbaijan, if in 2011 there were 211 enterprises with state share in the authorized capital, then, there were 293 such enterprise as of April 1, 2012. During the first quarter, inventory of 91 of them was made compared to 58 last year. However, if as of early year, 6,280 state-owned enterprises were included in the state property register, then, as of April 1 -6,393 enterprises, their 6,232 branches and 135,760 real estates.

In the first quarter, direct investments in the non-oil sector exceeded investments in oil sector. Investments in the non-oil sector development accounted for 63.8 percent (1.339.8 billion) of all capital investments in the economy, while 4.4 percent (91.9 million manat) -non-oil industry, while 36.2 percent (759.6 million manat) - oil sector.

According to the Azerbaijani Ministry of Taxes, 110 new enterprises were established in non-oil sector in 2011. In 2012, about 200 enterprises are under construction through various financial funds. This means that Azerbaijan will work to reduce dependence on oil and increase investments in non-oil sector. The country is still dependent on the oil sector, but today the tax revenues from non-oil sector significantly increased.

The total investments in the industry totaled 851.5 million manat with an increase of 2.6 percent. Some 38.8 mln manat was invested in the processing industry (decreased by 78.8 percent). During the reported period, the investments in the extractive sector hit 752.2 million manat, which is 25.5 percent more than investments in January-March 2011. Totally, 40.6 percent of investments fell to the industrial sector.

Investments for assembly and construction work made up 1.103.7 billion manat (52.6 percent of total investments in the construction sector). Investment for the construction of production facilities totaled 989.7 million manat, while non-production facilities totaled 1.109.7 billion manat.

Of the total capital investments, 66.7 percent accounted for domestic investment. Most (70.5 percent) of domestic investments was made in the state-owned enterprises and entities, and only 29.5 percent - private enterprises.

Investment indices in January-March 2012:

(Source: State Statistics Committee and calculations by Trend

The total volume of foreign investments in Azerbaijan's economy in the first quarter of 2012 amounted to 570.2 million manat, which is 18.7 per cent more than the same period of 2011. The increased amount of foreign investments in the country once again proves the fact that foreign investors are interested in Azerbaijan's economy and their investments are protected at the proper level.

In the first quarter of 2012, 92.2 percent (525.5 million manat) of investments in Azerbaijan's economy made by foreign countries and international organizations accounted for investors from the UK, U.S., Japan, Norway and Turkey.

As before, the UK continues to preserve its a leading position in this list. Its share in total foreign investments hit 46.1 percent, while its investments amounted to 262.9 million manat.

Of the international financial institutions, the biggest amount of investments was allocated by WB in amount of 20.0 million manat with weight of 3.5 percent. WB projects cover different spheres of the country's economic life.