Azerbaijan has hired McKinsey & Company to support the development of an economic roadmap towards 2025, in light of lower expected oil prices. The country is seeking to diversify its economy away from reliance on energy exports.
Azerbaijan is situated in the Transcaucasian region, between Southwest Asia and Southeastern Europe. The country has a population of around ten million with around a quarter living in the capital city of Baku. The country is rich in energy, particularly oil, as well as a range of precious metals. The country has enjoyed large spikes in economic growth, largely due to oil exports – however, recent lower oil prices have placed strain on growth and the country’s finances.
In a bid to diversify the country’s economy, given the precarious long-term trends for oil prices, the Azerbaijani government has begun to consider alternative, sustainable, long-term strategies. “We were expecting to enter the post-oil era in about 10-15 years, but we have practically found ourselves in that situation already today," comments Natig Amirov, an aid to the President, in a statement to the Financial Times.
Earlier this year President Ilham Aliyev approved a draft roadmap for the expansion of a range of auxiliary sectors within the economy, as a means of diversifying the country’s long-term economic growth. The plan includes a range of efforts, from supporting key sectors to infrastructure investments. Amirov is leading a special group, tasked with developing plans in line with the roadmap.
To support the development of the plans, the government of Azerbaijan has hired McKinsey & Company. Consultants of the management consultancy will support the development of the road map for the country’s economic development to 2025, of which a new economic model is to attract investors to the country.
McKinsey & Company has in recent months been hired in a number of countries to support economic development, from diversification in Saudi Arabia to an economic vision for Pakistan and mining in Kazakhstan and Kenya.