Different cultures one success: Azerbaijan
Azerbaijan represents a country with a distinct cultural and business traditions.
When it comes to business traditions and culture its becomes even more interesting. From ancient times caravan routes of a Silk Road crossed Azerbaijan, making this country a vital hub of trade at the time. Thereby, people here always knew how to do business. After the independence in 1991, it took some time to rebound and the 3rd oil boom helped the country to get back in shape. As the economy of the country has developed with the growth of oil trade, and has sought to diversify its base economy, challenges have been encountered in relation to the ways that businesses can progress to compete on the international level.
The latest Global Competitiveness report by WEF states that: "Azerbaijan scores highest in its region (37th), having weathered the recent crisis better than neighboring economies". The recent "economic storm" that took the country unaware in the wake of a sharp drop in oil prices, and as a result in Azerbaijan`s revenue, made the country to adapt to the new realities. Even though the "new normal" has its own side effects on the country`s economy, this may turn out in long lasting positive economic and social prosperity with efficient planning and change management.
As such, there is an increasing recognition within the country that there is a need for an understanding and utilization of more efficient business methods and policies. This has manifested itself in a number of young businessmen travelling abroad to gain a business education. Azerbaijani government tried to tackle this problem long ago by sending almost 2000 students on behalf of the government, building a fundament for human capital of the country. When taking one of the leading private holdings of Azerbaijan as an example, the numbers speak for themselves. Almost 25% of a professional staff have Masters degrees or MBAs from top foreign universities. It may seem not a lot, but it is definitely more than it used to be. Companies now encourage continuing professional development of local staff.
More and more companies start to recognize the value of global business practices, particularly because of the expanding nature of the Azerbaijani economy. Even the government of Azerbaijan has hired McKinsey for the consultancy needs. As the Heritage foundation puts, there is already notable progress in fiscal freedom, regulatory efficiency and trade freedom. In addition to that the latest World Bank report states that Azerbaijan is among countries that continue to improve doing business.
It is clear that Azerbaijan is willing to rebuild the infrastructure of the economy and encourage the production by focusing more on long-run economic performance rather than just on growth rates it has enjoyed during the oil-boom period.
Planning and evaluation are key to the change process in Azerbaijan business.
As the country prepares itself for a post oil era, to an economy with a competitive capitalist market, decision making process became faster. Azerbaijan continuing investing in human capital, infrastructure projects and innovative solutions in order to achieve production growth and diversification of economic landscape. An economic rebound under on-going turbulent conditions in the region and necessary adjustments within such a broad range are no easy tasks for any country. As N. Machiavelli states: "There is no more delicate matter to take in hand... than to be a leader in the introduction of changes". In this regard, it is critical to buttress popular support, as successful implementation of reforms directly depends on it. The recent referendum in the country showed people`s trust in authorities and in its vision of transformation in the economy. This should inspire everybody to greater economic activity. In case of effective economic conversion, Azerbaijan may play a role model for the countries in the region facing same challenges.
Of course nobody was expecting such a sharp shift in oil prices, neither was Azerbaijan. But as the matter stands, Azerbaijan is setting up new goals to get necessary results for further sustainable development. And if we take into account that researches suggest that the "distance from the equator` is considered to be the strongest predictor of long-term economic success" the city of winds – Baku, has very good chances as it is almost as far from equator as New York with minor difference of 37 km.