Azerbaijan to be among high-income countries by 2020 - CBA

In 2013, the global processes and world prices for the main export commodities are expected to have a positive effect on Azer­baijan's balance of payments, Elman Rustamov, Governor of the Central Bank of Azerbaijan said in an interview to The Business Year magazine.

"At the same time, non-raw commodities and service export growth expectations are also high.

"These factors may drive the current ac­count surplus up to 20% of GDP to provide further growth for our strategic foreign ex­change reserves," Rustamov said.

According to official fore­casts, in 2013 economic growth is expected to be 5.3%, including 11.7% growth in the non-oil sector.

International institutions also predict ongoing economic growth in Azerbaijan.

"The non-oil sector will be a key driver of economic growth. Overall, Azerbaijan has an adequate strategy to neutralize risks coming from the global economic environment and meet the chal­lenge of domestic development," Rustamov said.

He said in 2013, the key target is to hit a low single-digit inflation rate of 5%-6%, the core factor of which is determined by exchange rate stability.

"A stable and favorable exchange rate is one of the prerequisites for economic growth, diversification, and the competitiveness of non-oil exports," Rustamov noted.

The key targets of the economic growth strategy of our country for 2020 are to fur­ther double national income and enter the group of high-income countries. Over the past 10 years, Azerbaijan has entered the group of medium-income countries. The scale of per-capita GDP in purchasing-power parity (PPP) exceeds $10,000 by this indicator. High economic growth rates have also been followed by a rising resilience to ex­ternal shocks. From 2003 to 2012, the for­eign exchange reserves in the country in­creased by 29 times. The strategic reserves now approximate to 70% of GDP, and it is among the top-15 countries in terms of this ratio.

Rustamov said reserves are sufficient to finance three years of imports and exceed exter­nal debt by nine times.

"CBAR is determined to actively contribute to these targets with its policy experience, creative staff, and intellectual leadership potential. Maintaining macroeconomic and financial stability while contributing to economic development are key strategic tasks for CBAR," Rustamov said.

To that end, according to him, the bank's 2011-2014 Strategic Plan implies significant changes in a number of directions. The fundamental modernization of key activities and meet­ing best international practices is the num­ber one priority.

"It includes a substantial improvement of monetary management and the prudential supervision framework, enhancing cash circulation, and improving external communications using the most up-to-date standards," Rustamov underlined.

He said another priority is the alignment of institutional governance systems by having the bank catch up with other leading central banks in terms of organizational maturity, development of the internal corporate environment, and performance management, as well as the improvement of human resources and risk management systems.

"We are determined to actively support the government in the implemen­tation of the new economic strategy. Fi­nally, we aim to develop human capital in the bank by tailoring the fundamental knowledge, skills, and qualifications of staff to the dynamic environment of the bank. Hence, in the medium term, CBAR is planning to implement about 40 new de­velopment projects. Hopefully, the coming strategic period will become a key stage to reinforce the idea of the "21st Century Central Bank" for CBAR," Rustamov said.


/Trend/