IN THE LEAD

In recent years authoritative international organization The World Economic Forum (WEF) has consistently given Azerbaijan high marks for the competitive ability of its economy, developmentof human capital, the war against poverty, as well as the continuing strength of its tourist and communications and information sectors. In the new WEF report Azerbaijan has once again improved its position in the world ranking of competitive economies, keeping first place in the Commonwealth of Independent States (CIS).

Development Indicators

Dynamically developing Azerbaijan today provides more than three-fourths of the combined economic potential of the southern Caucasus and holds fourth place in the CIS for its gross domestic product. The stability of its basic macroeconomic indicators, its attractiveness to investors, and -most importantly - the dynamic development of the non-oil economy contribute to the preservation of stable socio-economic development, regardless of fluctuations in the global economy. According to UN data, while in 1995 Azerbaijan occupied 125th place among the countries of the world in economic development, it has now risen to 65th. According to IMF figures, in the next few years Azerbaijan's GDP will reach the landmark total of 100bn dollars, with the key driver being considered the non-oil-related sectors of the economy. 

The first steps in the modernization of industry outside the oil sector and agriculture began in the late 1990s. Thanks to financial, technical, and legislative support for the private sector by the government, as well as wide-scale privatization, Azerbaijan was one of the first countries in the former Soviet Union to carry out vital market reforms, and this fact was repeatedly confirmed in reports of rating companies and international financial organizations. It was not until after the economic crisis, however, that thegovernmentbeganpayingparticularattentiontodeveloping sectorsof the economy that do not deal in natural resources, deciding to begin a new industrialization of the country. The effectiveness of this policy is confirmed by dynamic development outside the oil sector: the rate of growth of non-resource-related fields reached 9 to 10 percent, which is two to three times faster than the overall growth of GDP. About 75 percent of GDP and about two thirds of tax and custom sproceeds are provided by sectors of the economy not related to oil. Itwouldbehardtooverratetheimportanceoftheseaccomplishments, since, alongwiththestabilityofthecountry'seconomicindicatorsanditsfavorablebusiness climate, the growth rate of the non-oil-related economy is recognized by most international financial organizations as a key marker determining the status of any country in global economic ratings.

The research of the World Economic Forum, based on a combination of generally-available statistical data and a survey of company management, can be cited as an example. WEF experts evaluatethe competitiveness of countries base dont wel vesindicators, including thelegal environment for business, infrastructure, macroeconomic stability, health care and elementary education, higher education and vocational training, the productivity of the goods market, the productivity of the job market, the development of the financial sector, the development of technology, the size of the domestic market, the competitive ability of the non-oil sector, and the potential for innovation. 

Getting better every year

What do WEF experts think of Azerbaijan's economic development over the past few years? Unlike a number of European and post-Soviet states in the post-crisis period, the forum's yearly reports consistently give positive figures for Azerbaijan's economic development.

It is worth noting that WEF experts consider the main criterion for a country's competitiveness to be the ability of the country and its institutions to provide a stable rate of economic growth while preserving stability over the medium term. By this criterion Azerbaijan, which has been able to limit the rate of inflation and rid itself of sharp fluctuations in currency value, as well as widening investment projects and anti-poverty social programs, largely in provincial areas, is an optimal candidate for further promotion in the rankings.

In the comparatively recent Global Information Technology Report 2014 experts from the WEF gave Azerbaijan 49thplace (a jump by seven positions) in internet-readiness. In another report by the Davos forum, Global Enabling Trade Report 2014,the country also moved ahead four positions, occupying 77th place. According to Human Capital Report 2013, Azerbaijan, which was given 64th place, is once again among the leaders in the former Soviet Union. The country has respectable positions in WEF's reports on the level of development of the tourist sector.

However, the most important rating research document by the World Economic Forum, determining the position of this or that government in the world table of ranks, is traditionally considered to be its research into economic competitiveness. Azerbaijan's position in this issue is nearly irreproachable. For comparison, a little over three years ago in the report Global Competitiveness 2010-2011 Azerbaijan occupied 57th place in the world and third place among the states of the former Soviet Union. In this area Azerbaijan is behind only the Baltic states, who are firmly ahead of their neighbors in the region. In 2011 Azerbaijan made very modest progress, but progress nevertheless, in WEF's rankings, taking 55th place among 142 governments and gaining 4.31 points on the competitiveness of its economy. At that time Azerbaijan occupied first place among CIS states in overall competitiveness rankings.  

In a WEF report published in 2012, the country occupied 46th place among 140 countries, jumping ahead nine positions.The country made another jump of seven places last year, when it advanced to 39th place in the Davos forum's rankings. 

A new jump 

WEF experts have yet again found a significant improvement in Azerbaijan's economic indicators. According to The Global Compe-titiveness Report 2014-2015, published a few days ago, Azerbaijan has moved to 38th position among 144 world economies. 

It's worth noting that in several local criteria Azerbaijan received even higher marks from international experts.

When the ranking tables are made, the countries are given an average mark in each segment. In the basic index, the Global Competitiveness Index, Azerbaijan received 4.53 out of 7 possible points. At the same time, on the criterion of macroeconomic stability Azerbaijan made it into the world's top ten, taking ninth place. And, what's especially good news, Azerbaijan has the lowest inflation rate of any state in the former Soviet Union. For job market effectiveness we took 33rd place, ininvestment protection 22nd, and for the time it takes to register a business we took 36th.

For the second year in a row Azerbaijan occupies first place for the competitiveness of its economy, placing ahead of all the governments of the former Soviet Union, with the exception of non-CIS member Estonia, which took 29th place. Among former Soviet republics, Lithuania and Latvia came not far behind Azerbaijan, taking 41st and 42nd places. One of the most rapidly developing states - Kazakhstan - for the second year in a row cannot make it off the 50th line of the WEF rating, while Russia was able to move from 64th to 53rd place, thanks to its rapid industrial growth. Slightly improving on last year's figures, reform-minded Georgia occupied 69th position. Permanently crisis-ridden Armenia fell from last year's 79th position to 85th. For the sixth year in a row WEF experts recognize Switzerland as the most competitive state, with Singapore, the United States, Finland, and Germany following. 

The criteria for economic development and rankings for the world's countries given by WEF clearly pay witness to the fact that Azerbaijan is an object leader not only in the former Soviet Union, but also looks well even when compared with more developed countries. "Occupying 38th place, Azerbaijan passed a number of EU countries, including members of the Group of 7 - the G7. For example, Italy, a G7 member, took only 49th place. Other members of the European Union, Poland and Romania, took 43rd and 59th places, respectively. It is wor thnoting that Azerbaijan definitively came ahead of regional heavyweights Turkey and Iran, who took 45th and 83rd place, respectively," says a statement by the Azerbaijani Marketing Society, who assisted WEF experts in their compilation of The Global Competitiveness Report2014-2015. 

IntheopinionofDeputyMinisterofEconomicsandIndustrySevinc Hasanova, the improvement of Azerbaijan's position for competitiveness in the WEF report will have a positive effect on the business climate and the expectations of investors."Azerbaijanhaspoliticalstability, which explains the country'sdevelopment as a whole. It has acroeconomic stability and the right conditions for the development of business. In this regard Azerbaijan's position in the WEF rating gives economic structures, business circles, and the world community as a whole a positive signal," remarked the deputy minister. In her words, in the development conception "Azerbaijan 2020: a look into the future", which is currently being carried out in the country, increasing the country's competitiveness is one of the priorities. Measures to ensure economic stability and development of infrastructure will continue in the future. "Azerbaijan is also taking steps to improve the business climate. There is a policy of innovation intended to bring high-tech equipment and cutting-edge technologies into the country. The entry of Azerbaijan into the world space industry will also contribute to the future improvement of the country's position in international reports," the deputy minister emphasized.

In a word, yet another move forward in WEF ratings again proves the effectiveness of the nation's chosen model of economic development. As for the immediate benefit of these high ratings, it's enough merely to note the increase in the country's attractiveness to investors and its trade image.