ECONOMY


Azerbaijan towards Green Entrepreneurial State

Azerbaijan towards Green Entrepreneurial State

Baku, February 20, AZERTAC

Climate change being foremost, cataclysms around the globe necessitate rethinking the State's economic capacity and role. This is coaxial with the green transition's gaining an ascending currency in political economy parlance, despite the prevailing neoliberal orthodoxy that relegated the State's role to "market-fixing" in lieu of "market-shaping." Sustainability transitions are context-dependent, multi-dimensional and long-term processes accompanied by uncertainty and value contestations, whereby the dialectic relationship between stability and change induces the mobilisation of massive resources. Hence amidst such a complexity, the "visible hand(s)" of the State could catalyse the transition regardless of the theoretical diatribe against it. One avenue to spotlight the capability of the State in orchestrating resources through a mission-oriented approach is the notion of the “Green Entrepreneurial State.” The noted approach does not merely ascribe the State a central role in setting and enforcing environmental regulations but also entrusts directing innovation for the public purpose through investments in new technologies, providing a level playing field for green businesses and creating marketable trajectories for green products. It further recognises the significance of collaboration between the State and other stakeholders to mould a symbiotic ecosystem conducive to green innovation and entrepreneurship. Therefore, we have to envision a resilient, ambidextrous and dynamic State apparatus rather than casting the public sector as inertial or just necessary for the “basics.” An alteration in public expectations from short-run to long-term can galvanise States to invest in new institutional and economic capabilities, given that the word “green” signifies a gulf between the past and the new generation of institutions. Recent public investments and visionary green initiatives reflect that Azerbaijan is making rapid strides towards a state model commensurate with the net-zero emission targets. Azerbaijan is a pioneering country in post-soviet geography that adopted the environmentally sustainable National Program on Socio-Economic Development in 2003. The ensuing State programs, "Azerbaijan 2020: Look into the Future" adopted in 2012, the "National Strategy for the Development of the Information Society in the Republic of Azerbaijan for 2014-2020", encompassed explicit elements of the transition to a green economy. The latest strategic roadmap, "Azerbaijan 2030: National Priorities for Socio-Economic Development," clearly reflects the green goals of Azerbaijan for the upcoming decade. Namely, the 5th National Priority clearly stipulates the socio-economic development predicated upon green energy and green growth. The conceptual frame throughout these years solidified with the emergence of institutional pillars such as the Ministry of Ecology and Natural Resources (2001), the Ministry of Energy (2013) and the State Agency on Alternative and Renewable Energy Sources (2009). The public sector's proactive approach to market shaping in Azerbaijan has a long pedigree. Currently, operating under state-run Azerbaijan Investment Holding, the establishment of the "Tamiz Shahar" Open Joint Stock Company in 2009 is the primary exemplification. "Tamiz Shahar" OJSC steered several projects, including Balakhani Industrial Park, which serves as a platform for public-private partnerships for recycling waste materials since 2011. Other projects include Municipal Solid Waste Sorting Plant and Solid Waste Incineration Plant in Baku. These facilities not only pioneered the recycling business in the country but also converted the Balakhani district of Baku from a notorious dumpsite to an eco-friendly landfill. Dynamic public sector capabilities in terms of green transition also came to the forefront in the reconstruction of Karabakh in the aftermath of the end of the nearly three-decade-long Armenian occupation of Azerbaijani territories. The massive destruction of the infrastructure during the Armenian occupation that turned the region into the "Hiroshima of the Caucasus" is currently being rebuilt by green principles. The President of Azerbaijan, Ilham Aliyev, declared Karabakh a "green energy" zone, where hypermodern smart city and smart village projects are already initiated. Moreover, Karabakh and Eastern Zangezur account for 9,200 MW of solar and wind energy potential, while the hydropower potential is at least 500 MW. Such immense potential is envisaged to be realized through the construction of more than 30 medium and small hydroelectric power plants (4 of them already in active operation). The idea of the Green Entrepreneurial State stems from the recognition that the State, as a pivotal actor in the economy, can play a critical role in creating markets, directing resources, providing incentives, and setting targets to accelerate the transition to a green economy. In this context, Azerbaijan developed a sound policy framework and demonstrates a strong political will under the visionary leadership of President Ilham Aliyev to achieve the transition to a more sustainable and prosperous future.

Nijat Muradzada

Lecturer at Azerbaijan State University of Economics (UNEC)

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