What type of economy does azerbaijan have

The Azerbaijani Ministry of Agriculture and Food runs procurement centers dispersed throughout the country for government purchase of most of the tobacco, cotton, tea, silk, and grapes that are produced. The Ministry of Grain and Bread Products runs similar operations that buy a major portion of grain production. Remaining crops are sold in the private sector.

During World War II, relocated and expanded factories in Azerbaijan produced steel, electrical motors, and finished weaponry for the Soviet Union's war effort. The canning and textile industries were expanded to process foodstuffs and cotton from Azerbaijan's fields.

Azerbaijan's postwar industrial economy was based on those wartime activities. Among the key elements of that base were petrochemical-derived products such as plastics and tires, oil-drilling equipment, and processed foods and textiles. In the largest share of Azerbaijan's industrial output was contributed by the food industry, followed by light industry defined to include synthetic and natural textiles, leather goods, carpets, and furniture , fuels, and machine building.

Significant food processing and cotton textile operations are located in Gyandzha in western Azerbaijan, and petrochemical-based industries are clustered near Baku. The city of Sumgait, just north of Baku, is the nation's center for steel, iron, and other metallurgical industries.

Once a major exporter of equipment to the rest of the Soviet Union, Azneftemash has remained dependent since on imports of parts from the other former Soviet republics. The economic decline and the breakup of the union has disrupted imports and caused an estimated output reduction of 27 percent in the Azerbaijani oil equipment industry in Azerbaijan has ample energy resources, including major hydroelectric generating capacity and offshore oil reserves in the Caspian Sea.

Despite what amounts to an overall excess of production capacity, fuel shortages and transport problems disrupted generation in the early s. In Azerbaijan produced 23 billion kilowatt-hours, but near the end of the country had produced only 16 billion kilowatt-hours. Electricity is generated at major hydroelectric plants on the Kura, Terter in western Azerbaijan , and Aras rivers the last a joint project with Iran.

A larger share of power comes from oil-fired electric power plants, however. In the late Soviet period, Azerbaijan's power plants were part of the Joint Transcaucasian Power Grid shared with Armenia and Georgia, but Azerbaijan cut off power to Armenia as a result of the conflict over NagornoKarabakh.

Azerbaijan has exported oil and gas to Russia since the late nineteenth century. The birthplace of the oil-refining industry at the beginning of the twentieth century, Azerbaijan was the world's leading producer of petroleum. When the Soviet Union disintegrated, Azerbaijan was producing 60 percent of Soviet oil extraction machinery and spare parts but less than 2 percent of the union's oil.

In the Gunesli field accounted for about 60 percent of Azerbaijani oil production. Crude oil production has decreased in recent years, mainly because of a weak global market, well maturity, inadequate investment, and outdated equipment. According to Azerbaijani estimates, for the first seven months of compared with the same period in , crude oil production declined 7.

These rates of decline compare favorably, however, with those experienced in the oil production and refining industries of Russia, Turkmenistan, and other former Soviet republics in the early s. Some oil is shipped by train to Black Sea ports in Russia and Ukraine, and some is shipped by tanker to northern Iran. Pipeline shipment has been slowed by infrastructure problems.

One old oil pipeline from Azerbaijan to the Georgian port of Batumi on the Black Sea is inoperable, and the Russian pipeline is unavailable because that line is already at capacity. Azerbaijan's oil production is processed at two refineries near Baku. Because domestic oil production has not matched refining capacity in recent years, the refineries also process Kazakh and Russian oil.

Russia, Ukraine, and other former Soviet republics have been involved in contentious negotiations with Azerbaijan over oil payment. Smallholder farmers generally have scarce financial means and make limited profits from farming activities. Climate change is an increasing challenge for smallholder farmers, while soil erosion threatens sustainability. The Government is striving to implement strategies to address these hazards and to help the rural poor achieve lasting improvements in their living standards.

IFAD has enjoyed a long history of a strong and successful partnership with the Government of Azerbaijan in rural poverty reduction and overall agricultural development efforts, with focused interventions in remote areas of the country where pockets of poverty exist. Good results have emerged from completed projects.

For example, the Farm Privatization Project pioneered a land redistribution initiative that led to the revival of the rural sector and assisted Azerbaijan in its transformation into a market-based economy. The project enabled land title registration to take place and contributed to the emergence of a land market. The project also pioneered the establishment and support of water users associations, demonstrating the practicability of participatory irrigation management.

The Rural Development Programme for Mountainous and Highland Areas focused on community-based participatory development and social infrastructure investment, including income-generation support in crop and livestock productivity, processing and marketing.

The programme made good progress in the uptake of livestock improvement services, establishment of local groups and producer associations, the introduction of bee-keeping, provision of rural financial services, enterprise development and gender mainstreaming. About 47 per cent of the population lives in rural areas, and about 39 per cent of employment is in agriculture and agro-processing. Bernard Mwinyel Hien. Since the presidential election in April , the Government of Azerbaijan has undergone significant changes.

These include the nomination of a new prime minister and the appointment of several key ministers in charge of education, tax reforms, agriculture and rural development, the environment, and energy. The new Government has been tasked with continuing the reforms in key sectors to recover economic growth. Since economic prospects will largely rely on rising gas exports, the projected acceleration in growth in the medium term will be temporary.

The country needs reforms to boost private sector investment, reduce the state footprint, tackle issues of competitiveness, and develop human capital.

The notable increases in the budget allocations for education up by 13 percent and health care by But further efforts are needed to align budget spending with development needs, including through strengthening medium-term budgeting and the public investment management system. The Country Partnership Framework CPF for Azerbaijan aims to support the country on its path to sustainable, inclusive, and private sector-led growth.

Currently, the CPF is undergoing a mid-term review that, among other outcomes, will identify new areas for partnership with the country for the next two years. On December 19—21, , more than participants from the Government of Azerbaijan, together with representatives of development partners, civil society, the diplomatic community, and academic and research institutions, came together for the Azerbaijan Human Capital Forum.

Recognizing the key role of human capital in growth and development over the long term, the three-day, high-level forum was organized by the WBG in partnership with the Office of the Deputy Prime Minister, Ministry of Education, and Ministry of Labor and Social Protection of the Population.

The goal of the forum was to support the Government in accelerating investments in human capital as a critical step to boosting more inclusive and sustainable growth. Several recommendations emerged on ways to support Azerbaijan to improve its human capital, including the need to increase public spending on health and education, improve the access and quality of early education, narrow the learning gap, increase the access to tertiary education and reform vocational training, reduce out-of-pocket expenditure in health, strengthen the primary health care system, do more to identify vulnerable households, and expand the social safety nets that target poverty.

On the supply side, the hydrocarbon sector stagnated, as surging natural gas output, up by At the same time, non-energy GDP grew at a solid 3.

On the demand side, investment remained anemic while rising real incomes, as a result of higher government spending, supported consumption. Azerbaijan's official national poverty rate is low, standing at 5. Given the recent increase in private consumption, the poverty rate is estimated to have fallen further in