ECONOMIC INTELLIGENCE WEEKLY

Created: 8/2/1997

OCR scan of the original document, errors are possible

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SLy" Directorateoflntelligence

27

Eurasia

Reforms Fueling Azerbaijani Economy

Azerbaijan's economy grew during Ihe first half of this year,ercent over the same period last year andive-year contraction of more thanercent. Foreign investment inillion, almost double that of the same period lastfueling much of the growth, n

Baku's economic reform plan, introducedasey factor in creating the macroeconomic stabilization needed to attract large volumes of foreign investment. Baku has held the budget deficit to lessercent of GDP and kept inflationercent so far this year.

discipline has kept the Azerbaijani manai firm against the US dollar since early last year. |

Baku's mass privatization program, launched this spring, appears on track to meet ambitious IMF goals to pri vatize hah* of thearge firms andercent of its arable land by the end of next year, according to official statistics.

date, the government has soldarge firms and has distributed moreourth of targeted agricultural land to (he private sector, n

1 say they are encouraged by economic progress thus far but warn that Baku's chief challenge in the next several years will be to stay the course and continue implementing reforms. The IMF argues that Baku's window of opportunity to restructure the economy extends to the turn of the century when major oil projects come online

that point, the projected surge in oil wealth could weaken the government's resolve for further painful reform.!-

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