Baku, December 15 (AZERTAC). Azerbaijan has seen robust economic growth over the last three years, but it still faces major transition challenges across most sectors, according to the EBRD’s new strategy for the country which runs from 2010 to 2013. Email

The strategy analyses the country’s progress in political and economic transition and outlines the Bank’s priorities in Azerbaijan over the next three years. Priority areas will be increasing investments in the country’s non-oil sector, as well as funding financial sector development and support for small business entrepreneurs. Another key priority will be policy dialogue with the authorities to implement reforms and improve the investment climate.

Over the past strategy period since 2007, Azerbaijan’s economy grew by an average of 14.8 per cent a year, driven by an oil and gas boom that accounted for 47 per cent of GDP in 2009. The non-oil economy benefited from spill-over effects with the construction and service sectors growing respectively by 13.1 and 11.8 per cent on average over the same period.

Over the medium term, GDP growth will remain largely dependent on developments in the oil and gas sectors. In 2010 GDP is expected to grow by 4 per cent.

Olivier Descamps, the EBRD’s Managing Director for Turkey, Eastern Europe, Caucasus and Central Asia, said Azerbaijan had already implemented reforms that were important for growth and the beginning of a recovery from the crisis within the non-oil economy was a positive sign. But he added that the progress of structural reforms had been uneven. Large transition challenges remained across most sectors of the country’s economy.

According to the EBRD’s latest Transition Report 2010, the key challenge for Azerbaijan is to diversify its economy. To increase the country’s non-oil exports, it will be necessary to improve the business environment, encourage competition and attract more foreign strategic investors. While the country’s financial sector has weathered the crisis well, it requires further significant reforms. The reforms should promote consolidation and modernisation through increased competition, pivatisation or changes in regulation.

To help speed up reforms and address some of the challenges facing Azerbaijan, the EBRD’s activities will focus primarily on supporting private sector development in the country, and builing up a more attractive investment environment.

“Since July 2010 the new strategy has been under a public discussion. The new document outlines the EBRD’s continued support to the non-oil sector and business environment development. The Bank will continue to support the development of the financial sector, as one of its priorities, and assist Azerbaijan to diversify its economy by providing financing and technical assistance to Azerbaijan’s corporate sector,” Head of the EBRD Office in Azerbaijan Francis Delaey said.