WASHINGTON: The International Monetary Fund (IMF) is looking forward to cooperate with the Azerbaijani authorities in preparation of the COP29, Jihad Azour, Director, Middle East and Central Asia Department, IMF, said in an exclusive interview with Trend on the sidelines of the IMF Spring Meetings in Washington.

‘We have a long standing relationship since the independence of Azerbaijan and all the reforms that took place over the last 30 years. And recently, in the context of COP29 that is going to be organized in Azerbaijan, we look forward as an institution to help Azerbaijan in the preparation and make this COP29 a successful one. We have regular policy consultation, also we provide technical assistance to Azerbaijan,’ he said.

Azour pointed out that as part of its mission, in addition to financial support that Azerbaijan doesn’t need, IMF provides policy consultation through its regular Article IV consultations.

‘One third of our activity globally at the Fund is to provide technical assistance in diffe
rent areas such as fiscal, monetary policy, financial sector, also on some specific issues like statistics. This is an activity that has been growing. Recently we have opened a new center that serves the region, called the Caucasus, Central Asia, and Mongolia Regional Capacity Development Center (CCAMTAC). It provides technical assistance, but also a platform for peer-to-peer cooperation between countries in the region,’ he explained.

Azour noted that Azerbaijan’s economy has recovered and rebounded after the COVID-19 shock in 2021.

‘In 2021-2022-2023, growth moderated and inflation eased. Real GDP in 2023 increased by 1.1 percent. It was mainly driven by the non-oil and gas sector. This was mainly led by transportation, construction, and also by hospitality services. Growth and inflation are expected to moderate in the medium term. We expect growth in 2024 to improve compared to 2023 and reach 2.8 percent, in 2025, will remain at almost at the same level at 2.3 percent. The good news is that inflation rema
ins around 5 percent this year and next. And the debt to GDP is very healthy,18 percent of GDP. Therefore, the economy is improving, yet at a moderate level,’ he added.

Jihad Azour went on to add that IMF has regular engagement with the Azerbaijani authorities. The IMF’s missions regularly visit Azerbaijan.

‘Therefore, we have an active relationship. During the Spring Meetings and Annual Meetings, we have the opportunity to discuss several issues that are important in our bilateral relationship, but also for the region. Azerbaijan has now an important mandate, which is to organize COP29. COP is an important endeavor. I think it will be one of those important moments this year. And the Fund is ready to help. As you know, the Fund has scaled up its work on climate in different fronts. We look forward to cooperate with authorities in the preparation of COP29 and to bring regional dimension to the priorities that the world is going to discuss in November this year,’ he added.

Cooperation on green transition

J
ihad Azour noted that the Fund does not finance projects but helps countries to do the green transition.

‘We have started to provide new facility that is called Resilience and Sustainability Facility. The purpose of it is to help countries to do the major transformation, both in terms of policies and also in terms of structural reforms that will help countries to transition from the current status and move into more green economy. We are working on three levels for the region and also with Azerbaijan on the issue of adaptation. Although our region is not one of the largest emitters, it’s still one of the most affected. And therefore, it’s important to help countries develop through a certain number of policies and investment capacity to adapt and to reduce the negative impact of climate shocks.

The second level is mitigation of emissions and developing a certain number of new sectors, renewable, solar, and so on, that will increase the part of the non-carbon energy production. The third level is to help cou
ntries identify new investment opportunities. This is a sector that is going to be one of the most fast-growing sectors, and therefore it’s an opportunity for countries to use those sectors to increase investment. Azerbaijan is a country who has, on one hand, the potential, and resources to develop new activities in the environmental sector,’ he said.

Uzbekistan

Jihad Azour noted that Uzbekistan has, over the last few years, made important reforms to open the economy, attract investments, and liberalize their financial system.

‘In addition to that, they are working hard in order to attract direct investment and to grow their economy. The economy of Uzbekistan had a healthy level of growth over the last few years, growing in 2023 at 6 percent, projected to grow this year at 5.2 percent. Uzbekistan was affected by the various shocks, COVID-19, war in Ukraine, and the impact of the geoeconomic fragmentations. Therefore, going forward, it’s important for Uzbekistan to accelerate the transformation through refo
rms that will allow investments to flow faster and also to increase the connectivity between Uzbekistan and some of the key economic partners starting with China and with Europe,’ he said.

The IMF’s Middle East and Central Asia Department head noted that it is important to continue the process of structural reforms, open further the economy for foreign investors, accelerate the transformation of some of the state-owned enterprises, at the same time maintain macroeconomic stability through tight fiscal policy that may require some additional consolidation and also improve the social protection network.

Turkmenistan

Azour pointed out that Turkmenistan is an economy that has strong reserves in gas and has a potential for growth.

‘The way to expand this potential is to introduce additional reforms to create a strong and well-established market economy, increase the institutional capacity to attract foreign investors, and strengthen the social protection framework in order to provide additional social assistan
ce and social inclusion. It’s an energy-producing economy and therefore it’s important to diversify further outside the gas and oil sector,’ he concluded.

Source: Trend News Agency