The strategy seeks to support diversified and inclusive growth in Azerbaijan through three strategic directions that include stimulating the development of the private sector, increasing the efficiency of the public sector, and improving infrastructure and strengthening human capital.
The strategy for 2019-2023 is also consistent with ADB's large strategy for the period until 2030.
The direction of increasing the efficiency of the public sector is focused on strengthening the management system and institutional capacity, while improving infrastructure is focused on improving the standard of living in cities, promoting regional cooperation and integration.
The Business Plan is closely linked to the strategic roadmap for the prospects of the national economy, approved in December 2016 and aimed at intensifying efforts to diversify the national economy and stimulate sustainable non-oil economic growth, ADB noted.
"The CPS is demand-driven and provides a flexible and adaptive approach to changing circumstances, based on a wide range of ADB tools and methods. In other words, since both the public and private sectors are still consolidating after the economic downturn of 2015-2017, following the shock of oil prices in 2014, the bank’s participation in the early years of the CPS will focus on supporting the government through political operations, analytical and advisory assistance including for the preparation of projects, as well as technical assistance in strengthening the capacities of relevant government agencies and the private sector," ADB said.
"This will provide the basis for selective lending to projects in the later years of the SCP’s existence in the event that the tough stance of government borrowing will weaken and the profile of the private sector will improve," the bank added.
Depending on market conditions and capabilities, the ADB operations will be directed to supporting the private sector through appropriate financial intermediaries, as well as small and medium enterprises, especially those who involved in non-cyclic sectors and other underserved client segments.
"The ADB can also work directly with relevant small and medium-sized enterprises (SMEs) and state-owned enterprises to attract private capital, and within its financing program on non-sovereign trade, will strive to provide guarantees and loans to local banks, seeking to liquidate market gaps and promote non-oil trade. In the field of infrastructure and with real opportunities, ADB can support public-private partnership projects through equity or debt financing," the bank noted.
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