Since the opening of the Baku-Tbilisi-Ceyhan pipeline in May 2005, Azerbaijan has experienced a major surge in economic growth and poverty reduction. However, the Government of Azerbaijan faces major challenges in translating extractive-sector economic growth into a diversified and sustainable economy.  In this connection, the Government’s Vision 2020 Plan promotes a highly competitive economy and the development of the non-oil sector.  USAID economic growth programs to improve the investment climate directly support these goals of economic diversification, particularly in agriculture, as well as expand Azerbaijan’s economic partners and advance its integration with European markets.

Azerbaijan faces significant opportunities for regional trade integration.  While trade volumes with historical trading partners such as Russia remain significant, the European Union has become an increasingly important trade partner of Azerbaijan.  Given this growing market, USAID assists Azerbaijan to build new market linkages, increase competitiveness, and benefit from its comparative advantage in high-value export products, such as pomegranates, hazelnuts, and fruits and vegetables.  Within this context, USAID supports farmers to increase the quantity and quality of products produced and to implement good agricultural practices to meet the higher standards required by Western buyers and consumers.  USAID also builds the capacity of agribusinesses, producer organizations, and other civil society actors to promote inclusive economic growth.  In addition, USAID promotes improved productivity and income in the Ganja-Gazakh region through the use of information and communication technologies and transfer of innovations to agribusinesses.  These programs promote a competitive and inclusive economy.

Anar Mikayilov, Executive Manager of the Girgbulag Trout Farm, proudly displays the “fruits” of his cooperation with USAID.

Gulsabah Amirova, USAID ACT project

On a related front, USAID supports the development of a competitive, transparent, and business-friendly environment that is conducive to job creation, private sector growth, and long-term prosperity.  In particular, USAID enhances the capacity of commercial banks to provide sustainable market-based financial intermediation services to small and medium enterprises so that entrepreneurs can expand their businesses.  USAID also aims to support opportunities for regional transport integration through the elimination of non-tariff barriers and other impediments to harmonized trade and business growth. 

Finally, USAID contributes to the sustainable development of small and medium enterprises in Azerbaijan through developing the future workforce of Azerbaijan and promoting women’s entrepreneurship to ensure their inclusion in the economic sphere.  Under an internship project for university students, for example, USAID placed students with private firms to gain business skills and practical work experience to develop their careers.  Sixty percent of program participants in the youth internship program were female university students.

Some recent achievements in this area include:

• USAID agricultural assistance to improve the competitiveness of targeted value chains increased productivity and production at the farm level in pomegranates (57%), aquaculture (22%), and dairy (12%) and led to large increases in exports of pomegranates (35%) and hazelnuts (68%).
• USAID program for partial loan portfolio guarantees increased access to finance for small and medium agribusinesses through co-sharing risk with four partner financial institutions, which have provided 788 loans in the amount of $6.6 million.
• USAID programs to strengthen private sector competitiveness and workforce development of youth and women increased the skills of 120 university students in Baku and Ganja through the provision of internships and real world experiences at private companies; at the end of the program, 32 students had been offered jobs (46% women) following their internships.