Infrastructure construction of North-South project to be accelerated
Work on creating the infrastructure of the North-South international transport corridor will be completed in the shortest possible time, Azerbaijani Ministry of Economic Development said.
Previously, it was planned to complete the main part of the infrastructure work in 2016.
The ministry said that it is planned to build the Astara (Iran) - Astara (Azerbaijan) railway line, a cargo handling terminal, as well as jointly construct the border bridge within the framework of the project
"The Iranian part of the Astara (Iran) - Astara (Azerbaijan) railway line is two kilometers long, and, according to the contract, the Iranian side will be engaged in its construction," the ministry said. "The length of the Azerbaijani part of the road is more than eight kilometers, and our side will build it. A cargo handling terminal, the construction of which was taken over by the Iranian side, will be also built on the territory of Astara (Iran) according to the agreement."
A railway bridge with a length of 100 meters will be built by Azerbaijani company co-funded by both countries, that is on an equal footing.
The tender to determine the contractor for the construction work will be announced in Azerbaijan in the near future.
The ministry said that the implementation of the North-South international transport corridor is of great political and economic importance. The project will greatly increase transportation between Iran and Azerbaijan.
"Currently, freight transportation is carried out by motor transport," the ministry said. "Some 600,000 tons of cargo is transported in average during the year. After commissioning of the corridor, it is planned to bring the cargo transportation to 5 million tons per year in the first stage and up to 10 million tons in the second stage."
"Accordingly, the volume of cargo transportation in the first phase will increase by almost 10 times," said the ministry.
In addition, it was agreed to discuss the simplification of customs and border-crossing procedures, as well as regarding the transition of Bilasuvar and Astara border checkpoints to the round-the-clock work in the near future, the ministry said.
Azerbaijan to switch to new economy model
In the current economic situation, Azerbaijan needs to balance its economy in line with new conditions to ensure long-term macroeconomic equilibrium and stability, said Elman Rustamov, chairman of the board of Azerbaijan's Central Bank (CBA).
He made the remarks at a plenary meeting of the country's parliament during a discussion of the draft state budget for 2016 and subsequent three years.
Rustamov added that Azerbaijan also needs to create basic conditions for transition to a new economy and implementation of a new economic model.
"This necessity emerged due to that in 2014, the global economic crisis moved to a qualitatively new stage," he said. "The crisis, which started in the financial sector, transformed into a cyclical one and has a structural nature."
The global crisis has expanded, covering the developed and in recent times, developing countries, including China as well, said Rustamov.
Currently, the global trade and economic activity remains at a low level, price reduction is observed in commodity markets, the trade, currency and exchange rate wars have strengthened, he added.
"Azerbaijan's economy has quite deeply integrated into the global economy and today, foreign trade with commodities and services accounts for 80 percent of the country's GDP," said Rustamov. "Therefore, the impact of the global crisis on Azerbaijan's economy is significant and has a multifaceted nature."
The serious decline in oil prices has the main impact: from the historic maximum of $140 in 2008, the oil prices dropped by three times and even halved in recent year, said Rustamov.
Rustamov said that the current account surplus of the balance of payments declined up to $ 10 billion in Azerbaijan in 2014 (compared to the maximum level of 2011 in the amount of $17 billion) as a result of a great decline in oil prices.
He also said that as of 2015 this figure is expected to hit $2 billion, indicating an eightfold decrease.
"This is connected with a decrease in oil prices," Rustamov said.
Rustamov said that Azerbaijan has maintained its investment-grade rating for seven years of the global crisis despite the characteristic reduction or the change in the ratings in neighboring countries.
He said that 2004-2014 went down in the history as the "golden period" of the formation of Azerbaijan's economy.
Namely as a result of measures taken, Azerbaijan was less affected even during the critical phase of the crisis covering the period 2008-2010. During this period, given a 3.3 percent average annual growth of the global economy, Azerbaijan's economy has grown by an average of 5.1 percent, and the growth of the non-oil sector amounted to 9 percent.
"In the new economic situation, Azerbaijan faces new conditions and challenges, which can be conventionally divided into two parts, namely, balancing of economy and formation of basic conditions for transition to the new economy and the implementation of a new economic model," said Rustamov.