Azerbaijan’s economy got a helping hand post its independence from Soviet Russian in early 90’s. After the completion of the Baku-Tbilisi-Ceyhan Pipeline it transformed into major oil based economy self-sufficient from Russia’s dependence. It’s GDP has been growing year after year, setting an example for the highest rate growth in any country in the world. Under normal conditions, such GDP rate growth cannot be sustained over a longer period of time, but Azerbaijan has been able to do so.
Nine out of eleven climate zones are present in Azerbaijan. This provides an excellent ground for promoting agricultural production. The combination of oil trade along with agriculture can turn out to be a stabilizing factor for its economy. When Azerbaijan become a member of IMF (International Monetary Fund) in 1991, it led an economic stabilizing program which brought down the inflation rates from 1,800% in 1994 to 1.8% in 2000. This program also steadied out the Manat against the dollar and decreased the budget deficit to 1.3% in 2000.
Inspite of undertaking the macroeconomic stabilization reforms in co-operation with IMF, progress hasn’t shown much improvement due to lack of efficient public administration. Part by part, agricultural lands, small scale and large scale industries have all been brought under the control of the private sector.
Oil Reserves and its trade has been the main strength of Azerbaijan’s economy for over a century and accounts for more than 10% of the country’s GDP. This is expected to double in the coming years. Some oil reserves that Azerbaijan shares with other bordering countries in the Caspian Basin are as large as the North Sea. The exploration in these oil reserves is still in the initial stages as is eyed by all the Western countries as it is untouched by the Soviet states.
Oil and petroleum form the crux of Azerbaijan’s economy, but other than that, metals found in the Lesser Caucasus such as gold, silver, iron, copper, titanium, chromium, manganese, cobalt, molybdenum, complex ore and antimony account for the remaining part of the economy.
Till 2007, 4,755,100-hectares was used for agricultural purposes and wood resources accounted to 136 million. Agricultural research institutes concentrate on horticultural development, pastures, vegetables, wine making, and viticulture, cotton growing and medicinal plants.
In 2008, according to the World Bank's Doing Business report Azerbaijan was quotes as a top 10 reformer. The reasons cited were improvements on seven out of ten indicators of regulators reform, starting a one time shop for starting a business in a record time which increased business registrations by 40%, reduced minimum loan cut off by $1,100 and online payment of taxes.