Expert: Azerbaijan - region’s leader in the implementation of transport projects

Azerbaijan has a financial system recommended for investors.

Report informs the article by the head of the analytical group of the Center for Central Asian and Caucasus Studies at the Institute of Oriental Studies (Moscow), a researcher at Chatham House Stanislav Pritchin reads.

In mid-April, a team of analysts at the ECED Expert Center presented a report titled “Investment Appeal Map of Central Asian and the South Caucasus Countries 2020.” It was the second such report, the first presented in March 2017. An assessment of countries was carried out on a whole range of parameters that have an impact on the investment attractiveness of the state: the positions of countries in various types of credit ratings and ease of doing business, macroeconomic indicators, the development of transport infrastructure, political stability and existing risks for investors.

The first section of the study is devoted to the positions of the countries of the region in various kinds of ratings. Fundamental for many investors are macroeconomic stability indices from the three leading rating agencies — Fitch, Moodys, and Standard and Poors. There were no surprises here, the countries with the best and most stable financial systems in the region, Kazakhstan and Azerbaijan, have investment ratings, that is, economic systems recommended for investors.

The countries of the region have noticeably strengthened their presence at the top of the ratings. Azerbaijan jumped from 63rd place in 2016 to 25th in 2019; over the same three years, Kazakhstan improved its position from 49th to 28th place. But there are also negative trends. Armenia’s rating dropped from 35th to 47th.

The second section of the report is devoted to macroeconomic indicators, the size of the economy, market capacity, purchasing power — these are critical factors in deciding whether a company will enter a new market. In this regard, the top performers are the largest countries of the region: Kazakhstan, Uzbekistan, Azerbaijan, and Turkmenistan.

“These states have a fairly large market, natural resources, and sustainable political models that allow them to realize their economic and investment potential,” the author of the article noted.

The leaders in this section are Azerbaijan, which is systematically both developing large transport projects domestically and subsidizing their development abroad, and Kazakhstan, which is also actively implementing a state strategy for transport flows.