"Diversification" has become the buzzword of choice for booming Azerbaijan

by Martin Banks 

Historically, Azerbaijan's importance lies in its vital geostrategic location, as a gateway to the oil and gas wealth of Central Asia. Without Azerbaijan, these resources will be locked away from Europe. Azerbaijan has, of course, been famous for its abundant oil wells since the early 20th century and seemingly inexhaustible natural gas deposits since ancient times.

As in much of the oil-producing world, "diversification" has become the buzzword of choice. All the talk nowadays is of diversifying the economy and the Azerbaijani President Ilham Aliyev has proudly proclaimed, "We are working to ensure Azerbaijan can be successful without oil revenues."

In the case of Azerbaijan at least, this is not mere hollow talk. Azerbaijan, for example, is the initiator and participant in the creation of the Baku-Tbilisi-Kars railway - designed to improve the country's entire railway sector - and is finalising construction on a new international sea trade port in Alat settlement.

The country, which once hosted the historic Silk Road, has already received the first container train from China along the Trans-Caspian International Transport Route. Azerbaijan put into operation a new terminal at the Heydar Aliyev International Airport in 2014 and commenced activity at the region's largest ferry terminal in the newly built international seaport. Baku also commissioned a new shipyard and ship repair company, purchased ferries and tankers, bulk carriers and cargo ships, and launched six modern airports.

Indeed, over the past ten years, about 11,000 km of highways and 300 bridges have been built and repaired in Azerbaijan and $10 billion invested in the road infrastructure. It is clear that Azerbaijan's future development as a transport hub will contribute to the diversification of the economy, a reduction of dependence on oil sector and help the private sector.