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Azerbaijan Again Outsider

Azerbaijan Again Outsider

2017 December 27 ( Wednesday )  16:12:24
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Русский Azərbaycan

The International Monetary Fund has published the results of a large-scale study and identified countries with the highest GDP per capita. Many of the countries that are among the richest in the world have oil and gas reserves on their territory, which has a positive effect on the development of their economies. Investments and a strong banking system are factors that also play an important role in the economy of the richest countries.

This year, the rating of prosperous countries on the dynamics of GDP growth is headed by Qatar, where GDP per capita has reached $ 124,930 per year. The country has been leading the world in this indicator with a large margin for the last several years. Qatar is the third largest natural gas producer and the sixth largest natural gas exporter in the world and a major exporter of oil and oil products.

Luxembourg is located on the second position of the rating with a GDP per capita of $ 109,190. The state, small in territory and population, is one of the richest in Europe, with the highest standard of living. In the city of Luxembourg there are many EU organizations. Due to favorable conditions and offshore zone, about 1 thousand investment funds and more than 200 banks are placed in the capital, which is more than in any other city in the world.

Singapore ranks third in the list - its GDP per capita is $ 90,530. It is a highly developed country with a market economy and low taxation, in which transnational corporations play an important role. In total, there are five taxes in the country, of which one is a profit tax, and one is a wage tax. There are developed electronics, shipbuilding, and financial services. Large-scale research in the field of biotechnology is under way.

Among the favorites is Brunei, where per capita GDP is estimated at $ 76,740. The state's economy is based on the extraction and processing of oil (over 10 million tons per year) and gas (over 12 billion cubic meters), exports of which account for more than 90% of the foreign exchange earnings (60% of GDP).

The fifth place in the world's top wealthiest belongs to Ireland - its GDP per capita is $ 72,630. The priority direction of the national economy is a high-tech science-intensive industry. In Ireland, computer machines, components for them, and semiconductors are produced, and there is active development of a variety of diverse software, including highly specialized software. Although export remains the main driver of Ireland's economic growth, development is also facilitated by the restoration of both construction and business investment.

Subsequent places in the IMF rankings have been taken by Norway with GDP per capita of $ 70,590, Kuwait with GDP per capita $ 69,670, UAE with GDP per capita $ 68,250, Switzerland with GDP per capita $ 61,360, and Hong Kong with GDP per capita $ 61,020.

Equally rich in hydrocarbon and natural resources, Azerbaijan this year again turned out to be among the hopeless outsiders, not entering not only half a hundred, but even a hundred countries with a relatively prosperous economy and the standard of living of citizens. According to the IMF's rating in 2016, the country ranked 106th with GDP per capita of $ 3,956. A year before GDP per capita showed a landslide dynamics, collapsing to $ 3,854 from $ 7,900. The negative trend is still continuing. This year, this figure was $ 3,812, which probably provides even lower places in the ranking. In fact, Azerbaijan has fallen into the top twenty of the poor countries of the world, neighboring with Sri Lanka and Mongolia. By the way, Armenia and Angola are nearby.

Commenting on the results of the IMF study, the independent economist Natig Jafarli noted that Azerbaijan's current GDP per capita indicators indicate inefficiency of the economic policy, the deepening crisis in the country, and the fact that the population continues to be very poor. By the same indicator, it lags far behind not only the European Union, but even Belarus and Kazakhstan, although a few years ago, Azerbaijan was a solid average in terms of GDP per capita.

"After the devaluation of the national currency, GDP per capita in dollar terms fell markedly. About three years ago, this indicator practically approached the $ 10,000 mark. Then the manat rate was higher than the dollar. But over the past two years, this indicator has collapsed to the level of the poorest Tunisia. The reason is a drop in oil prices, a weak diversification of the economy, dependence on imports, and a monopoly on business areas," the expert noted.

Meanwhile, according to the forecasts of the banking group Moody's Investors Service, GDP per capita will be more than $ 4,000 in Azerbaijan in 2017-2018.

According to Jafarli, based on the country's potential capacity, GDP per capita of more than $ 4,000 is a rather low figure. In order for the country to reach a new level of development, the GDP per capita should be more than $ 10,000. But with the current trend, in the next four years at least, Azerbaijan will not be able even to come close to this indicator. The situation may change if oil prices again reach $ 100, which is extremely unlikely.

Therefore, to improve performance, it is necessary to develop production, increase export potential, stabilize the financial system, increase business activity, and focus on the non-oil sphere. If these figures are raised by at least 40-45%, GDP per capita will grow by 2,000-2,500 US dollars. And this is a long process.--0--