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Economic development

Azerbaijan and ADB Unveil Forward-Looking Partnership Strategy for 2025-2029

Strategic Insights

— 1 min read

Azerbaijan and the Asian Development Bank (ADB) have unveiled a forward-looking Country Partnership Strategy (CPS) for 2025-2029, reaffirming their long-standing partnership and commitment to the country's development journey. The new strategy marks a significant shift in priorities, focusing on inclusive, climate-resilient, and innovation-driven growth, as Azerbaijan transitions towards a post-oil economy. The strategy is structured around three pillars: value creation, integration, and resilience, and aims to align with national priorities such as the "Azerbaijan 2030" vision and the Socioeconomic Development Strategy 2022-2026.

Key Takeaways:

  • The Azerbaijan 2030 vision and the Socioeconomic Development Strategy 2022-2026 will serve as the guiding frameworks for the 2025-2029 CPS, ensuring that ADB's support is aligned with national priorities.
  • The strategy focuses on five key areas:

* Economic resilience through reducing hydrocarbon reliance

* New job creation in growing sectors

* Strengthened innovation and productivity through skills and digital transformation

* Climate commitments and green economy development

  • The plan aims to grow the share of renewable energy from 20.3% to 42.5% by 2035 and support climate-resilient infrastructure, green finance, and water resource management
  • The strategy promotes social inclusion and human capital development, with a focus on education, healthcare, and social protection
  • ADB's CPS supports the growth of the financial sector, particularly in supporting SMEs, and expanding access to formal savings and credit systems, particularly for women and rural communities
  • The strategy aims to improve public financial management, making sure public resources are used effectively and transparently, and support the improvement of the tax-to-GDP ratio
  • Azerbaijan has maintained a low poverty rate of 5.3%, and ADB is helping build on that progress through targeted investments

Statistics:

  • Azerbaijan's GDP per capita has risen from $663 in 2000 to $7,284 in 2024
  • The country's oil and gas sector continues to play a central role in the economy, but the government's efforts to diversify are showing promising signs
  • The National Climate Adaptation Plan was adopted in 2024
  • Trade volumes are increasing along CAREC Corridor 2
  • The tax-to-GDP ratio increased from 14.4% to 17.5% between 2019 and 2024

Sources:

  • Asian Development Bank (ADB)
  • Azerbaijan's Government
  • CAREC Program
  • United Nations Development Programme (UNDP)
  • World Bank

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