"Inflation in Azerbaijan is only 2.3%, while monetary income of the population has increased by 9.2%. As you can see, the income of the population exceeds inflation,” said President Ilham Aliyev at the meeting of the Cabinet of Ministers dedicated to the results of socioeconomic development of 2018 and objectives for the future.
"If we look at 2017 we will see that inflation was more than 12 percent, and now it is 2.3 percent,” the head of state said. "Manat exchange rate is stable, agriculture has grown by 4.6 percent. I think this is a good indicator. 17.2 billion manat was invested in the country's economy last year. This is a very high figure, and the most pleasant thing is that more than 11 billion manat of this investment is invested in non-oil sector of our country. That is, it shows that Azerbaijan is a very attractive country for investment. The fact that Azerbaijan ranked 25th in the World Bank’s Doing Business 2019 report, I think, will encourage those who want to invest, and more and more investments will be made in our country.”
We wonder what other factors are there that make our country safe and attractive for investment. In general, what further steps should be taken to increase capital investment? Which areas of the economy can be more expedient and successful? We have learned the opinions of experts about these questions.
Economist Parviz Heydarovnoted that there are a number of conditions that make the country attractive and reliable for investment. "One of the most important conditions is the political stability in the country. That is, whether domestic or foreign, the most important factor for investor is the lack of political turmoil and unstable political situation in the country where the money is invested. Otherwise, no entrepreneur will risk and invest. Therefore, the main factor attracting entrepreneurs to Azerbaijan in investment is the existence of political stability here. The second condition is the country's financial situation. This is especially important for foreign entrepreneurs. So, when the foreign entrepreneur invests in one country or another, the first and foremost for him is a matter of warranty. Entrepreneurs are also considering the financial situation in that country while investing money. They also analyze the level of warranty in the area where the money is invested. In terms of these conditions, Azerbaijan has superiority as its currency reserves are several times higher than the foreign debt. That is, Azerbaijan is currently among the countries that can close all foreign debts in a very short time. According to international criteria, if external debt is at the level of 30% of the gross domestic product, this is already a critical condition. However, our external debt accounts for 19%,” said the economist.
Heydarov noted that another nuance that attracts our country for foreign investors is that the Azerbaijani state has taken some measures to create favorable investment climate in the country recently. "Different measures are taken to soften taxes, stimulate investors. All of the above-mentioned finds our country attractive and reliable for foreign entrepreneurs.”
According to the economist, in order to attract more investment, our state must promote a stimulating economic policy. "It is necessary to create more favorable conditions in tax, customs and other spheres. It is more expedient to invest in the non-oil sector. So, after Azerbaijan gained its independence, foreign funds were mostly invested in the oil sector. In fact, the situation is still the same now. This is natural because foreign entrepreneurs invest in the area from which they will make a profit in a short time. However, we need to develop the non-oil sector in order to put an end to the country's dependence on oil. Therefore, along with domestic investors, we have to direct foreign entrepreneurs to the non-oil sector, tourism, agriculture, communications and service,” he added.
Economic expert Vugar Bayramovsaid that attracting investment from foreign countries also contributes to the development of innovation and technology. "Increasing investment is one of the targets of the country. In 2018, this goal was practically achieved. Almost $ 10 billion has been invested in Azerbaijan’s economy. An important part of this investment was directed to the non-oil sector. At present, the main objective is to increase the volume of foreign investment. In this regard, the main priority in the post-oil era is to achieve the expansion of activities to attract foreign investors. Not content with foreign investment in 2018, Azerbaijan was also able to improve its position in international reports. The fact that Azerbaijan climbed 32 spots to rank 25th in the World Bank’s Doing Business 2019 report has been also very important in terms of attracting foreign investment. Thus, Azerbaijan has been able to attract more investments in 2019. From this point of view, 2019 can be regarded as a successful year in terms of investment.”
The expert also spoke about sectors where investment is crucial. "Today's industry is a priority. There is a need for more investment in the industry, especially in terms of innovation. On the other hand, it is expedient to invest foreign investment in the agrarian sector. Strengthening of the activity in this direction is very important. The service and tourism sector is also favorable for attracting investment," he noted.