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V.Bayramov: Azerbaijan economy in 2015: new opportunities for further diversification

On the other hand, the oil reserves and oil that has already been turned into liquid assets
carries with itself risks of inefficiency and misuse due to the lack of institutional
capacity created by traditions of bottom-up control and the legacy formed by years of
participation in a centralized economy. Given that the flow of oil revenues has a finite
life expectancy, the Government of Azerbaijan must implement a long-term
macroeconomic strategy, fiscal rule and implementation mechanisms that ensure that
the oil money is saved in the most efficient way and that the benefits of the investments
address high priority needs, are highly integrated, and sustainable.
Thus, 2015 can be considered to mark the beginning of economic reforms. Mr.
President İlham Aliyev has underlined paying more attention to real sector,
removing external barriers to business, and restraining the extent of activities of civil
servants. The withdrawal of licensing rights from various authorities; as well as the
elimination of some, and the transfer of the other to the State Service for Public
Service and Social Innovations under the President of the Republic of Azerbaijan
(ASAN service) can be considered a first attack to monopolistic tendencies. In other
words, when provided by previous authorities, licensing procedures were associated
with subjective approaches and leading to the creation of monopolies, while new
rules intend to overcome this.
The elimination of monopolies in customs is considered to be an important
consequence of the crisis. It should be noted that, the country relied on imports in
terms of raw materials and final consumption products, in which the presence of
monopolies caused serious losses for citizens and real sector.
In general, reforms such as economic liberalization, improving non-oil sector,
creating efficient operating environment for internal and external investors by
restoring confidence, eliminating monopolies and minimizing bureaucrat-business
relations, structural reforms are considered to be the ways out of crisis [Luetkepohl
Helmut, 2011]
Conclusion
In conclusion, although the year 2015 was not easy for the economy of the
country, there are some opportunities for further diversification reforms. Plunging
oil prices in the world markets were reflected in macroeconomic indicators in the
short-term. In fact, the exchange reserves of the Central Bank decreased by 8.74
billion USD, being around 5 billion for the first time since August, 2009. To put it
another way, the amount spent by the Central Bank in 2015 alone, was equivalent to
what had been accumulated during 5 years.
However, this economic crisis called for first-hand reforms. Unless large-scale
economic and structural reforms are implemented, the crisis is anticipated to be
aggravated, and therefore, the global status of the country to fall behind. At the same

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