In 25 years, the Azerbaijani government has made considerable efforts to reduce poverty. In addition, a great deal has been invested in infrastructure to put Azerbaijan on the economic map.
Business climate
Azerbaijan has to contend with a problem of corruption and a lack of investment. Despite this, the country has managed, in part through reforms, to finish in place 34 of the World Bank's Ease of Doing Business rankings (2020). To combat corruption, Azerbaijan is investing heavily in human capital and, with the support of the World Bank, is trying to reform its economy.
Economic prospects
Azerbaijan's economy is largely dependent on the export of oil and natural gas. Because of this dependence, the economy is vulnerable to fluctuating fossil fuel prices on the world market. Partly for this reason it has been decided to diversify the economy and to reduce the dependence on fossil fuels. Azerbaijan's economic growth rate is relatively low compared to the rest of the region, at 2.5% in 2019. After the Covid-19 pandemic, growth increased to 5.6% in 2021.
Business opportunities
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Sector |
Opportunities |
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Fossil fuels
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By far Azerbaijan's largest export products are oil and natural gas. This means that there are sales opportunities for machinery and equipment in the oil and gas extraction, construction, steel and metal industries. |
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Chemical industry |
Azerbaijan has a strong chemical industry that specialises in rubber and plastics. |
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Construction |
In the Azerbaijani Strategic Road Map for the Development of Housing Provision at a Reasonable Price, the government has announced that it will invest $500 billion in the construction of housing. The houses must also be energy efficient and meet green standards. This offers great opportunities for project developers, construction material suppliers and companies with knowledge about sustainable living. |
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Agriculture |
Over 40% of Azerbaijan's population is employed in the agricultural sector, but this represents only 6% of the GDP. Azerbaijan is still struggling with outdated techniques from the Soviet period. Now that the government has designated the agricultural sector as a priority sector for diversification of the economy, there is more room to invest in importing new techniques, machines and installations. These machines are not only needed to work the land, but there is also great potential for the food processing and packaging industries. There is also a lack of knowledge about agriculture, which can be a niche for Dutch agricultural entrepreneurs. |
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Transports and logistics |
As part of the diversification of the economy, the government is also focusing on a stronger transport and logistics sector. Major projects have been set up, such as the development of the railway line between Baku, Tbilisi and Kars. Currently, routes to the Caspian Sea and Turkey are being developed. If you are developing something for the transport chain, we can see if you can join one of the projects. |
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ICT |
There are plans to develop the underdeveloped ICT sector. For example, there are great opportunities for companies that offer e-governance applications. This is still hardly applied, while the added value is recognised. Also, e-commerce is still underdeveloped and can bring great opportunities for companies. To stimulate the digital transition, the government is now developing legislation. |
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Toerisme |
Azerbaijan has a shortage of hotels and a large growth in the number of tourists visiting annually. The government has developed a plan to invest heavily in the hotel market. Anyone interested in developing hotels can seize their chance here. |
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Consumenten |
The disposable income of the average Azerbaijan is very high. The market is eager for luxury goods from the West, and there is also a high demand for good customer service. |
Interest
Azerbaijan offers many opportunities for entrepreneurs. Now that Azerbaijan is making efforts to become less dependent on oil and gas exports, there are more opportunities for investing and setting up businesses in Azerbaijan, where there are great opportunities, particularly in agriculture. We are happy to make an appointment with you to discuss in detail the opportunities for your products or services.