The Asian Development Bank (ADB) has approved a new 5-year Country Partnership Strategy (CPS) for Azerbaijan that lays out ADB’s support for the country’s goal of achieving a more diversified, resilient, inclusive, and sustainable economy, Report informs citing the bank.

ADB’s new CPS, operational from 2019–2023, will focus on three strategic priorities to support Azerbaijan: boosting private sector development, raising public sector efficiency, as well as improving infrastructure and strengthening human capital.

‘Azerbaijan has undergone a significant economic transformation since it gained independence in 1991. Fuelled by oil revenues, the country rose to middle-income status in 2009 and has dramatically reduced poverty and strengthened human capital. However, the oil price shock in 2014 devalued the currency, increased public debt, negatively affected the financial sector, and slowed the country’s economy, with growth contracting by 3.1% in 2016. The government has implemented significant reforms to expand growth in other areas of the economy and has prioritized economic diversification to boost inclusive and sustainable growth in the country and achieve high-income status after 2025’, the bank said.

"Our new country partnership strategy enables ADB to respond to Azerbaijan’s needs at this important juncture in its development,” said ADB Country Director for Azerbaijan Mr. Nariman Mannapbekov. "The new strategy will increase support to the private sector, provide more focus on human capital development, scale up knowledge work, and enable innovative financing solutions.”

ADB will focus on supporting structural reforms through policy-based operations; provision of analytical, advisory, and project preparation assistance; and strengthening the capacity of government institutions. ADB will also seek to undertake selective lending for high-technology and innovation projects.

ADB will increase its private sector operations and build partnerships to increase financial inclusion. ADB will also explore local currency finance options by tapping the domestic capital market and promote risk mitigation schemes. The CPS envisages closer synergies between ADB’s sovereign and nonsovereign operations, including through public–private partnerships and blended finance.

The new CPS is fully aligned with the Government of Azerbaijan’s Strategic Road Map on National Economy Perspective, adopted in December 2016. It incorporates gender equality, climate change and environmental sustainability, regional cooperation and integration, and strengthening governance across the three strategic priority areas. The strategy has been developed in line with ADB’s Strategy 2030, which sets the course for the bank to effectively respond to the changing needs of the Asia and Pacific region.

Since joining ADB in 1999, Azerbaijan has received about $4.2 billion in sovereign and nonsovereign loans, guarantees, and technical assistance for transport, energy, public sector management, water supply and sanitation, finance, agriculture and natural resources, and health projects and programs.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from the region.