European Bank for Reconstruction and Development approved a new activity strategy for Azerbaijan. The text of the document, approved by the Bank`s Board of Directors on April 30 was posted on the website of the bank.
The strategy of the bank`s activity in Azerbaijan scheduled for three years and covers the period from 2014 to 2017.
"The economic growth declined sharply with the pre-crisis boom period since production pace of hydrocarbons has slowed. In 2011, the GDP of the country grew by only 0.1 percent amid falling oil production by 10.6 percent. In 2012, the economy grew by 2.2 percent, and a softer decline in oil production was compensated by the encouraging development of non-oil sector (9.7 percent)," the document says.
Azerbaijan's economy grew by 5.1 percent in the first nine months of 2013, according to the bank's estimates.
"Gas production, as it is expected, will grow significantly over the next period of the strategy, which partially mitigate the impact of oil production reduction. The major oil fund of the country (about 50 percent of GDP) provides a significant margin of safety ," the document said.
Thanks to the steady growth mainly due to oil production, as well as social transfers, the poverty level in Azerbaijan has sharply declined from nearly 50 percent in 1999 to six percent in 2012, according to the strategy.
"Azerbaijan has reached a critical stage in its development. Since 2017, oil production will decline, and economic dependence on accumulated hydrocarbon revenues is very high. Diversification of the economy will be of crucial importance in order for Azerbaijan to enter the post-oil period with a modern and developed private sector. The government of the country adopted ambitious targets on the diversification within the development concept of ''Azerbaijan 2020: Looking to the Future'', and has made some progress in the modernization of the economy. Nevertheless , the implementation of structural reforms for the support of growth in the sectors other than oil, should be accelerated," the document said.
From 1991 until the end of November, 2013, the EBRD has allocated 1,577 million euro for the financing of 138 projects. The total value of these projects was 6.6 billion euro.