WASHINGTON, U.S., April 24. The International
Monetary Fund (IMF) is eager to collaborate with the
Azerbaijani authorities in preparation for COP29, stated Jihad Azour,
Director of the Middle East and Central Asia Department at the IMF, in an
exclusive interview with Trend during the IMF Spring Meetings in
Washington.
“We have had a long-standing relationship since Azerbaijan’s independence
and have witnessed the reforms implemented over the past 30
years. In the context of the upcoming COP29 to be held in Azerbaijan,
we are excited as an institution to assist Azerbaijan in its preparation
and ensure the success of COP29. We engage in regular policy consultations
and provide technical assistance to Azerbaijan,” he explained.
Azour emphasized that in addition to financial aid, which Azerbaijan does not require,
the IMF offers policy consultations through its routine Article IV consultations.
“A third of our global activities at the Fund involve providing
technical assistance in various areas such as fiscal and monetary
policy, the financial sector, and statistics. This aspect of our work has been expanding. We
recently established a new center serving the region, named the
Caucasus, Central Asia, and Mongolia Regional Capacity Development
Center (CCAMTAC). This center offers technical assistance and serves as a platform for peer-to-peer collaboration among countries in the region,” he elaborated.
Azour highlighted that Azerbaijan’s economy has rebounded and
recovered following the COVID-19 shock in 2021.
“In 2021-2022-2023, growth stabilized and inflation decreased. Real
GDP in 2023 rose by 1.1 percent, primarily driven by the non-oil and gas sector,
especially in transportation, construction, and hospitality services. Growth and
inflation are anticipated to stabilize in the medium term. We predict that growth in 2024 will improve compared to 2023, reaching 2.8 percent,
and in 2025, it will remain close at 2.3 percent. Notably, inflation is projected to remain around 5 percent this year and next, and the debt to GDP ratio is a healthy 18 percent. Consequently, the economy is progressing, albeit at a moderate pace,” he added.
Jihad Azour further mentioned that the IMF maintains regular interaction with
the Azerbaijani authorities, with IMF missions visiting Azerbaijan on a regular basis.
“Therefore, we have an active relationship. During the Spring
Meetings and Annual Meetings, we have the opportunity to discuss
several important issues in our bilateral relationship, as well as for the region. Azerbaijan now holds a crucial mandate, which is to host COP29. COP is a significant initiative, and I believe it will be one of the key events this year. The Fund stands ready to assist. As you are aware, the Fund has intensified its efforts in climate-related areas. We are eager to collaborate with the authorities in preparing for COP29 and to bring a regional perspective to the priorities that will be discussed globally in November this year,” he added.
Cooperation on green transition
Jihad Azour clarified that the Fund does not finance projects but
supports countries in transitioning to a greener economy.
“We have introduced a new facility called the
Resilience and Sustainability Facility. Its purpose is to aid countries in undertaking significant transformations, both in terms of policies and structural reforms, to shift towards a greener economy. We are working on three levels for the region, including Azerbaijan, on the issue of adaptation. Despite not being among the largest emitters, our region is heavily impacted by climate change. It is crucial to help countries develop policies and investment capacity to adapt and mitigate the negative effects of climate shocks.
The second level focuses on reducing emissions and developing new sectors such as renewable energy and solar power to increase the share of non-carbon energy production. The third level involves assisting countries in identifying new investment opportunities. The environmental sector is expected to be one of the fastest-growing sectors, presenting countries with opportunities to boost investment. Azerbaijan, with its potential and resources, is well-positioned to develop new activities in the environmental sector,” he stated.
Uzbekistan
Jihad Azour highlighted that Uzbekistan has made significant reforms in recent years to open up its economy, attract investments, and liberalize its financial system.
“Additionally, they are working diligently to attract foreign direct investments and stimulate economic growth. Uzbekistan has experienced healthy economic growth in recent years, with a 6 percent growth rate in 2023 and a projected growth of 5.2 percent this year. Despite facing various challenges such as COVID-19, the war in Ukraine, and geoeconomic disruptions, Uzbekistan must accelerate its transformation through reforms that facilitate faster investment flow and enhance connectivity with key economic partners, particularly China and Europe,” he added.
The head of the IMF’s Middle East and Central Asia Department emphasized the importance of continuing structural reforms, further opening up the economy to foreign investors, accelerating the transformation of state-owned enterprises, and maintaining macroeconomic stability through strict fiscal policies that may require additional consolidation, as well as enhancing social protection networks.
Turkmenistan
Azour pointed out that Turkmenistan, with its abundant gas reserves, has significant growth potential. “To tap into this potential, Turkmenistan needs to implement additional reforms to establish a robust market economy, enhance institutional capacity to attract foreign investors, and strengthen the social protection framework to provide more social assistance and inclusion. As an energy-producing economy, it is crucial for Turkmenistan to diversify beyond the gas and oil sector,” he concluded.
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