During the 2nd Azerbaijan International Investment Forum, President Aliyev outlined a bold economic strategy featuring a multi-sector and competitive economy, founded on the pillars that have been established by oil and gas.
Azerbaijan’s brand has been associated with energy throughout most of modern history. Its oil and gas reserves attracted foreign investments, established linkages between continents and paved the way for the country’s economic growth. It is Azerbaijani President Ilham Aliyev’s leadership that is ushering in a larger narrative for the world: a story where petroleum and natural gas no longer dominate the economy but serve as a launching pad for a bigger story.
It was clearly outlined at the 2nd Azerbaijan International Investment Forum titled “Restoring Trust in a Fragmented World. But in an era when many economies are closing their borders and trust in global markets is waning, Baku took this opportunity to open its doors even more and showcase itself as a stable and forward-looking economic player for foreign investors.
Diversification is Already a Reality
This was the most impressive statistic in President Aliyev’s speech: currently, over 70 per cent of Azerbaijan’s GDP comes from the non-oil and gas sector. This is a country that is considered an energy economy and a remarkable achievement, which happened thanks to the years of conscious policy of the President and the Government of Azerbaijan.
The President’s approach has credibility, he wasn’t saying that it was finished. He admits that the bulk of exports remain energy resources, and next, the non-oil economy must become competitive enough to be able to carve a niche in international markets. But diversification of economy is already a reality and we must go on, certainly,” he said.
True diversification requires companies willing to play in the global arena, efficient infrastructure to transport goods and investors willing to invest in non-hydro business. The President explicitly identified these requirements, indicating his awareness of what the next step requires.
Geography as an Opportunity
The region where Azerbaijan lies is a given fact of reality – a fact that is between Europe and Asia. What the Government has done is to make that position economically productive. During President Aliyev’s tenure, significant investments have been made in the infrastructure of roads and railways, as well as in the development of ports and logistics along the East-West and North-South corridors.
The Middle Corridor is a standout project among the others. Now Azerbaijan is already capable to develop into much more than a transit route, thanks to its infrastructure. It can create logistics, warehousing, manufacturing and services around the goods moving through it and transform geography into a lasting value and jobs for its people.
From Oil & Gas to Solar and Wind
The decades-long experience in constructing complex international pipelines and energy infrastructure is now being applied to renewable projects in Azerbaijan.The know-how gained over decades in building complex international pipelines and energy infrastructure are now being transferred to renewables in Azerbaijan. According to President Aliyev, contracts that were already signed with domestic and foreign companies will reach 8 GW of solar and wind power by 2032.
Electricity transmission infrastructure is also being developed to link potential export with market, including to Europe. This places Azerbaijan in a favorable position not only as a reliable supplier of oil and gas, but as a partner where energy transition to clean energy is planned in such a clear way, which is not possible in many energy-exporting countries.
New Opportunities
In addition to corridors and renewables, the agenda of the Government also covers agriculture, food security, Free Economic Zone, digital transformation, artificial intelligence, infrastructure and human capital development. These initiatives are not different ones. Combined, they are a harmonized approach to creating several new avenues for investment in an economy that attracted investment primarily in the hydrocarbons sector until recently.
This depth demonstrates leadership in a way that takes the longer-term view: creating an economy that is less commodity dependent, and provides a variety of job prospects and new career paths for the young, growing population.
Positive Track Record
President Aliyev stated that the country has received direct investment totaling more than $350 billion in the last 20 years, which is nearly 50% from foreign direct investment sources. That is certainly an endorsement of the investment climate, legal and project delivery in Azerbaijan by the international investors.
The President’s message was that the next phase will take off from these pillars: the infrastructure that has already been established, the legal environment that has already been created, and the projects that have already been finished, which show what Azerbaijan can achieve.
Reality and Positive Efforts
The leadership of Azerbaijan’s government knows what investors want: viable projects, stable regulations, market opportunities, talented workforce and solid infrastructure. President Aliyev mentioned the necessity of carrying on the reforms, increasing investment and new markets, and recalling that the competition for markets has become more fierce in the world.
Such a mix of ambition and realism is what partners from abroad are looking for. It’s a clear indicator that a government grasps the challenge, that it’s not complacent about what has gone well and that it isn’t taking its foot off the gas.
Conclusion
The forum’s message was not just one of a call to invest. It was a call for the world to see Azerbaijan in a new light. It is not just the oil and gas fields that the country is showcasing anymore. It’s showcasing transport corridors, renewable energy, industrial areas, agriculture, reconstruction, digital infrastructure and a growing workforce.
Energy will continue to be a key factor for decades and President Aliyev has never indicated otherwise. What makes his vision so important is the way Azerbaijan is putting its resources, infrastructure and experience to work that it has built and developing a broader, more diversified and more competitive energy sector.
That could be the most interesting tale of them all for investors and partners. It is indeed not a story of Azerbaijan after oil, but Azerbaijan under the leadership of the President Ilham Aliyev when the economy is not being defined by oil and where the fruits of the oil are being judiciously channeled for the benefits of future generations.
Owner of “The Europe Today” and Patron-In-Chief/Owner of “The Gulf Observer”, Chairman “The Gulf Observer Research Forum”, Foreign Affairs Expert, Analyst, International Award Winning Author and Poet.
