Even as countries around the world are scrambling to mitigate the effects of the latest economic downturn, it’s business as usual in the Republic of Azerbaijan.

“Azerbaijan’s economy demonstrates fairly good macroeconomic indicators against the background of the next global financial crisis, and continues to develop rapidly,” Vahid Ahmadov, a member of the parliamentary commission on economic policy, was quoted by the daily newspaper AzerNews as saying late last month. “Economic growth increased by more than 5 per cent in the first half of 2015.

“Currently, Azerbaijan is several times ahead of the average growth rate of the CIS countries. Such rapid development is observed despite the sharp decline in oil prices in the world market.”

Oil’s not everything

His statement comes despite concern that falling black gold prices will negatively affect the oil-rich country following the central bank’s devaluation of the manat by 33 per cent this year. In June, Moody’s changed its outlook for Azerbaijan’s banking system from stable to negative, noting, “The slump in oil prices has put downward pressure on Azerbaijan’s economy, given that the hydrocarbon sector accounted for close to 37 per cent of nominal GDP at the year-end 2014.”

Moody’s forecasts that Azerbaijan’s GDP growth will slow to 1 per cent in 2015, based on an assumption of oil prices averaging $55 (Dh202) per barrel this year, and that growth will only recover to 1.7 per cent in 2016.

But officials are confident there’s no cause for concern. According to the State Statistics Committee, GDP showed increased growth of 5.6 per cent between January and July over the same period last year. It points toward the non-oil sector of the economy increasing by 9 per cent to account for 68 per cent of GDP, and 37.3 per cent of the gross output stemming from the services sector.

“Azerbaijan is wonderful compared to other countries,” Parviz Ismailzada, Consul-General of Azerbaijan in Dubai, tells GN Focus. “We have a stable supply of food and petrol; we produce enough through agriculture.”

He says the manat had been stronger than the dollar for more than 10 years before it was devalued, and now is only slightly weaker. Ismailzada believes the country will weather the current crisis as successfully as it did the 2008 downturn. “Economies everywhere are badly affected. Ours is still stable. We’re doing better than most.”

This is good news, as trade between the UAE and Azerbaijan continues to grow. While recent figures for the whole UAE aren’t available, a Dubai Chamber of Commerce and Industry report states Dubai’s non-oil trade with Azerbaijan increased from Dh1.6 billion in 2011 to Dh1.8 billion last year, registering growth of 12.5 per cent. This makes Azerbaijan the emirate’s 75th-biggest trade partner.

Dubai Chamber also opened its first overseas office in Baku in 2012. “Since opening, the Azerbaijan office has supported Dubai businesses to reach out to the Azerbaijan market and beyond to the Caucasus, while also attracting the country’s investors to potential areas of investments in Dubai,” news agency WAM quotes Dubai Chamber President and CEO Hamad Mubarak Bu Amim as saying.

Ismailzada says there were 262 companies headed by Azerbaijanis registered in Dubai by the end of 2014, an increase of 49 per cent from 176 in 2012. According to consulate data, Azerbaijan’s main industries include petroleum and petroleum products, natural gas, oilfield equipment, steel, iron ore, cement, chemicals and petrochemicals, as well as textiles. The country’s biggest exports to the UAE are meat and meat products, milk, vegetables, fruit, tea, sweets and carpets. Azerbaijan imports cosmetics, apparel, electrical equipment, TVs, mobile phones, car equipment, computers and cameras from the UAE.

Strengthened relations

The UAE recognised Azerbaijan’s independence on December 26, 1991, and diplomatic relations between the countries were established the year after. The UAE Embassy in Baku opened in 2011.

President Ilham Aliyev first visited the UAE in 2006, and met with His Highness Shaikh Khalifa Bin Zayed Al Nahyan, President of the UAE, Supreme Commander of the UAE Armed Forces and Ruler of Abu Dhabi, among others. His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, attended the signing of two agreements with Aliyev in Baku in March — one on cooperation and exchange of information between the UAE’s Securities and Commodities Authority and Azerbaijan’s State Committee for Securities, and the other on cooperation in emergencies. WAM reports that Shaikh Mohammad and Aliyev expressed hope that the agreements will lead to wider cooperation in various fields to benefit both countries and their people.

Azerbaijan continues to profit from being in the global spotlight, drawing tourists through events such as June’s European Games, the opening ceremony of which — estimated to have cost nearly $100 million — featured Lady Gaga performing John Lennon’s Imagine.

The country’s tourism sector is forecast to grow at 7.5 per cent a year to 2022. “In 2010, we issued 1,600-1,700 tourist visas,” says Ismailzada. “Now it’s more than 4,000 per year and it increases annually. Azerbaijan has something to offer every tourist.”

People power

Ismailzada says the UAE is currently home to about 7,500 Azeri nationals, up from about 3,500 in 2010. They’re active in all sectors, but most have business interests. He says Adnoc employs about 70, while Emirates Airline has 100 Azerbaijani cabin crew in addition to a host teaching at its Aviation College.

The community gets together often, and usually commemorate the massacre during the Soviet raid of Baku as Black January on January 20 and the Victims of the Khojaly Massacre on February 26. They celebrate independence from Soviet rule on May 28 and Solidarity Day with Azeri expats around the world on December 31.