Azerbaijan has set the course for the economy to reduce its dependence on oil by promoting new drivers of growth. By 2025, under the government’s Strategic Roads Maps, a more diversified economy should take shape led by three sectors: agriculture, tourism, and manufacturing. Bold reforms need to strengthen areas of the economy that could otherwise impede this transition, and policy makers must resolutely stay on the reform path. The core message of this publication is diversification toward non-oil sources of growth alongside efforts to reduce macroeconomic risks and the high cost of finance, make the education system responsive to the needs of the labor market, close infrastructure gaps, and help economically significant state-owned enterprises become more efficient.

Fourth Industrial Revolution (4IR) technologies have brought about unprecedented changes to labor markets, and the coronavirus disease further hastened digital transformations. While the application of 4IR technologies spell opportunities for productivity growth and income gains, they also create challenges, including job losses. Investing in skills for 4IR and incorporating 4IR technologies in the delivery of training can smoothen the transition to 4IR workplaces. To provide insights on the opportunities of 4IR, studies were undertaken in three countries—Azerbaijan, Pakistan, and Uzbekistan. This report, focusing on Azerbaijan, presents evidence from surveys of employers and training institutions, as well as an analysis of job portals for the agro-processing and transportation and storage sectors. It lays out policy directions and actions to harness the benefits of 4IR for growth, employment, and inclusive development.

Technology-based startup enterprises are an increasingly important part of the business landscape in Asia and the Pacific. By applying innovative technologies to create new products and services, they can make a significant contribution to economic development while generating social and environmental benefits. However, to survive and then thrive, tech startups require an enabling ecosystem that includes supportive government policy, adequate access to capital, skilled personnel, and quality digital infrastructure. This report assesses the current ecosystem for tech startups in Azerbaijan, specifically in Baku, Ganja, and Shamakhi, and examines the extent to which the ecosystem supports the growing number of startups. It provides recommendations on how the ecosystem can be strengthened.

This book delves into the connections between the Islamic Republic of Iran and the countries of the southern Caucasus region following the 1979 revolution. It focuses on their political, economic, and cultural interactions and elaborates on Iran's foreign policy principles, discourses, and significant decision-making institutions. It also addresses the process of nation-state building in the southern Caucasus, the challenges involved, and the geopolitical and strategic importance of this area for Iran. Factors influencing the relations are scrutinised, alongside an evaluation of the proposed accession of the Republic of Azerbaijan into Iran, based on insights from Hashemi Rafsanjani's diary. The work further investigates the legal framework of the Caspian Sea and Aras River, examines the strategic implications of the 2020 Nagorno-Karabakh conflict for Iran and other relevant actors, and analyses the repercussions of the Ukraine war on transportation routes. This book will help researchers of the Middle East and the Caucasus better understand Iran's relations with the region.

This edition analyses how trade can contribute to economic diversification and empowerment, with a focus on eliminating extreme poverty, particularly through the effective participation of women and youth. It shows how aid for trade can contribute to that objective by addressing supply-side capacity and trade-related infrastructure constraints, including for micro-, small- and medium-sized enterprises notably in rural areas.

Abstract: The economies of the six Gulf Cooperation Council (GCC) countries are heavily reliant on oil. Greater economic diversification would reduce their exposure to volatility and uncertainty in the global oil market, help create jobs in the private sector, increase productivity and sustainable growth, and help create the non-oil economy that will be needed in the future when oil revenues start to dwindle. The GCC countries have followed many of the standard policies that are usually thought to promote more diversified economies, including reforms to improve the business climate, the development of domestic infrastructure, financial deepening, and improvements in education. Nevertheless, success to date has been limited. This paper argues that increased diversification will require realigning incentives for firms and workers in the economies—fixing these incentives is the “missing link” in the GCC countries’ diversification strategies. At present, producing non-tradables is less risky and more profitable for firms as they can benefit from the easy availability of low-wage foreign labor and the rapid growth in government spending, while the continued availability of high-paying and secure public sector jobs discourages nationals from pursuing entrepreneurship and private sector employment. Measures to begin to address these incentive issues could include limiting and reorienting government spending, strengthening private sector competition, providing guarantees and financial support for those firms engaged in export activity, and implementing labor market reforms to make nationals more competitive for private sector employment.

Infrastructure—electricity, telecommunications, roads, water, and sanitation—are central to people’s lives. Without it, they cannot make a living, stay healthy, and maintain a good quality of life. Access to basic infrastructure is also a key driver of economic development. This report lays out a framework for understanding infrastructure resilience - the ability of infrastructure systems to function and meet users’ needs during and after a natural hazard. It focuses on four infrastructure systems that are essential to economic activity and people’s well-being: power systems, including the generation, transmission, and distribution of electricity; water and sanitation—especially water utilities; transport systems—multiple modes such as road, rail, waterway, and airports, and multiple scales, including urban transit and rural access; and telecommunications, including telephone and Internet connections.