'Today Azerbaijan figures on the list of 40 most effective world economies'

Mon 09 Sep 2013 08:20 GMT | 12:20 Local Time

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Interview with chief of department for political analysis and information support of the Presidential Administration of Azerbaijan Elnur Aslanov.

Azerbaijan is raising its economic competitiveness year by year. This fact has been reflected in the global competitiveness reports. What is the Global Competitiveness Report and why is it formed.

First of all, it should be noted that the Global Competitiveness Index of the World Economic Forum is a global and most authoritative study, based on a combination of specific statistics and the results of a global survey of business executives.

Index is the distribution of states in accordance with the indicators on the 110 parameters that evaluate the effectiveness of state policy in the sphere of economy, quality of life, growth, etc.

The ranking of the countries in terms of economic competitiveness is formed by results of the survey, It is important to emphasize that the attitude to a particular country is based not only on its success in the economic sphere, aimed at improving the welfare of the population, it's a kind of the consolidated opinion of the representatives of International Business in relation to this country. Because now the Global Competitiveness Index is based on a survey of 14,000 business leaders from more than 140 countries.

It is an amazing fact that similar studies have traditionally attracted the business community, but since 2004 the Global Competitiveness Index of the World Economic Forum has been the most comprehensive set of indicators of competitiveness of different countries..

It should be emphasized that among experts are such gurus in the field of management , as Klaus Schwab , Michael Porter. And it gives the poll even more prestige.

The importance of this study lies in the need for it - any country that seeks to eliminate obstacles to economic development and competitiveness  uses this document as a tool for the analysis of specific areas of economic policy, as well as planning of sustainable economic progress.

In other words, quoting one of the experts in this field, for every state the Global Competitiveness Index is primarily a "benchmarking tool ".

It is important to note that the growth in Azerbaijan’s economic competitiveness can easily by traced by the Global Competitiveness Reports : in 2010-2011 Azerbaijan was 57th, in  2011-2012-55th, in 2012-2013-46th, while in the report for 2013-2014 it rose to the 39th position.

When studying the Global Competitiveness Index, we can note the impact of current global economic imbalances on the position of countries, primarily through changes to an estimation of components that characterize the macroeconomic parameters of their operation and condition of the financial markets.

For example, the top five leaders of the Index include Switzerland, Singapore, Finland, Germany and the USA. However, in some respects, even these countries lag behind. Thus, Germany suffers a shortage of labor market flexibility (it is on the 113th place) and the generally hard economic state and macroeconomic vulnerability in the United States still make difference (117th place).

Azerbaijan has significantly improved its positions in the annual ranking list of world economies for 2013-2014 while consolidating its status of a country with the most competitive economy among the CIS states. Which factors have influenced such a high achievement? What does such an assessment mean?

Of course, rise in competitiveness is a clear example of the fact that Azerbaijan pursues an independent economic policy, makes economic and political dividends due to the policy of diversification. Obviously, authoritative international organizations admit that policies of President Ilham Aliyev targeted at reducing dependence on energy resources, creating at innovative or, in other words, “smart” economy, transforming “black gold” into an intellectual capital yield visible, tangible and real results.

Thanks to the policy of diversification of national economy, non-oil sector has grown 10% more over the first seven months of the current year.

Getting acquainted with the report of the World Economic Forum, one may note that economies of the countries which are able to pursue comprehensive economic policy and consider the full range of factors and relationship between them are the most competitive.

Most leading economies went down in rankings in 2013. Brazil dropped from 56th to 48th, India from 60th to 59th and South African Republic – from 53rd to 52nd position.

Despite reduced rankings of countries with traditionally strong economies, Azerbaijan improved rankings to rank 39th among 148 countries becoming a country with verified, diversified and structured economy over the last ten years.

 Improvement in the ranking by 7 points compared to the report for 2012-2013 and by 16 points compared to the report for 2010-2011 reflects the success and efficiency of economic and social policy of the President, stronger national competitiveness - namely, the ability of the country and its institutions to ensure stable economic growth.

The significance of this fair assessment will rise on the backdrop of growing global economic competitiveness for a right of each country to take a worthy place in world economic system. This is because today the competitiveness of national economy is inextricably linked to globalization. It is indefinable outside of this context.

How it can be seen from the Index that Azerbaijan is far ahead of a number of countries, not only post-Soviet countries?

That’s right. A couple of years ago we were discussing an opportunity of getting into the list of 50 most competitive economies. But today Azerbaijan figures on the list of 40 most effective world economies.

Global geo-economic initiatives that our country has initiated, creation of more than 1,200,000 new jobs, reduction of poverty rate from 46% to 6%, gradual and steady increase in the financial opportunities of citizens, great number of infrastructure projects, country’s becoming a transport hub, significant improvement in road infrastructure, creation of a new creative class of managers is a portfolio that the President forms for the future.

Speaking in the language of numbers, one can say that the national budget grew 19 times over the last 10 years. It is Azerbaijan who accounts for 75% of South Caucasus economy. Over $138 billion has been invested in economy. Incomes of population grew 6.9%, pensions 8.6% while salaries grew 6.3 times.

Today Azerbaijan is ahead of Kazakhstan, second most competitive country in the CIS by 11 positions. At the same time, our nearest neighbors in the South Caucasus - Georgia and Armenia - are lagging behind on 33 and 40 positions, respectively.

It should be emphasized that in the Global Competitiveness Index Azerbaijan is unconditionally ahead of all the countries of Eastern Europe, as well as a number of developed countries, including Italy. Moreover, in WEF rating Azerbaijan is ahead of the BRICS countries, except for China. 

However, the ranking of the World Economic Forum is not the only report that reflects the ongoing development of Azerbaijan's economy. Not so long ago, international rating agency Fitch Ratings, Standard & Poor's and Moody's have also improved the credit rating of Azerbaijan, which is also a good indicator of reforms.

It is important to note that such high estimates obtained by our country are particularly relevant given the slowdown in global economic activity due to the global financial and economic crisis and increased price competition.

What does this index give Azerbaijan as a whole?

 This question can be answered with a quote, borrowed from one of the founding fathers of the Index, Columbia University professor Xavier Sala-i-Martin, who claimed that "The Global Competitiveness Index provides insight into the long-term trends that shape the competitiveness of national economies".

With this in mind, a similar index is an analysis of national economies, and it creates a more favourable environment for investors and local businesses that receive guarantees regarding the prospects of development of national economy. In general, the index is designed not only for the current day, but also creates the basis for the analysis and forecasts of future prospects for the development of the state and society. 

So, speaking of the considerable achievements of Azerbaijan in the Global Competitiveness Index, it should be noted that of great importance is program  "Azerbaijan -2020: Vision to the Future", adopted by the President, which reflects the vector of development of the national economy, showing people what tasks the government has set forward.

In other words, based on the data provided by the impartial and credible investigation, it is safe to say that over the past 10 years, the President has laid the foundation for effective future of the country.

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