SECO’s projects in Azerbaijan are complementary to those of the Swiss Agency for Development and Cooperation (SDC) under the joint Swiss Cooperation Strategy for the South Caucasus. After the fall of the commodity prices, Azerbaijan is currently facing serious economic and social challenges. The country needs to make its economy more open, competitive and broad-based. SECO supports Azerbaijan’s efforts to develop a stable financial sector, manage public funds more transparently and make the private sector more competitive.
High earnings from the oil and gas sector enabled Azerbaijan to scale down its poverty rate from some 50% in 2001 to around 6% by 2016. However, the country has been badly hit by tumbling oil prices since 2015. This has led to significant devaluation of the local currency, painful budgetary cuts, rising unemployment, a grave banking crisis with still unclear consequential costs, as well as increasing inflation.
Reforms for greater economic stability
On a more positive note, the country is using the recession to push through some urgent reforms. These should help to diversify the economy and making it less vulnerable to external shocks. It is hoped that future growth will benefit more layers of society. Other important topics are gender equality as well as combating corruption and widespread monopolistic practices.
What are SECO’s objectives?
Swiss support in the South Caucasus covers the following domains of cooperation: economic development and employment, good governance and public services and conflict transformation and advocacy. SECO’s main focus in Azerbaijan is on:
- Building a broader-based private sector
One of SECO’s goals is to improve the economic framework for companies outside of the oil and gas industry. It also aims at diversifying the financial infrastructure so that small and medium-sized enterprises have easier access to cheaper and more innovative finances. Female entrepreneurs shall be supported in particular.
- A stable financial sector and transparent public spending
SECO supports some key state institutions, such as the new Financial Market Supervisory Authority, the Central Bank and the Ministry of Finance, to build their capacity in crucial areas such as financial market supervision, bank resolution, monetary policy or financial programming.
SECO and the SDC jointly define and implement the Swiss Cooperation Strategy in the South Caucasus, which includes Azerbaijan. From 2017 to 2021, a total of some CHF 43 million is earmarked for Swiss transition cooperation with the South Caucasus, of which around CHF 12 million is from SECO.
Last modification 09.12.2021