‘New Dubai’ on the Caspian Sea'

A market that achieved something incredible in the crisis-ridden year 2009: economy grew by almost 10%
“The Republic of Azerbaijan is, in terms of its population (8.7 million) and area (86,600 km2), a country with similar characteristics to Austria. The Azerbaijani market is therefore of a manageable size. It is also a market that achieved something incredible in the crisis-ridden year that was 2009: Azerbaijan’s economy grew by almost 10% (!). This figure may lie well below the “dream figures” of the preceding years (which were around 20%), but serves nonetheless to confirm for the time being at least that the dynamism of this small republic with its large oil reserves cannot be checked. In light of the construction and investment boom in the newly restored capital city Baku, the Austrian media have even begun to speak of the ‘New Dubai’ on the Caspian Sea'.” This is how the Austrian trade delegate in Moscow with responsibility for Azerbaijan euphorically describes the economic situation in the country.

A beacon of hope in the Black Sea region
This small Caucasus republic is therefore one of the beacons of hope in the Black Sea region, which has been chosen as the new focus of the internationalisation offensive “go international” within the context of Austria’s economic and foreign policy. Austrian investments in Azerbaijan and Austria’s trade relations with the country are – compared to those with the “Black Sea giants” Turkey and Ukraine – still limited, but the potential that is just waiting to be tapped is considered very promising. With the opening of an Austrian Embassy in the capital Baku in June 2010 and the establishment of a marketing office by the Austrian foreign trade organization, Austria’s political and economic powers have made clear the great importance that they attribute to the furthering of relations between Austria and Azerbaijan.

Limited consequences of the crisis
The figures for Azerbaijan’s economic development in 2009 are evidence of the country’s great resilience in the face of the global financial and economic crisis, which has seriously harmed most national economies since 2008. In 2009, Azerbaijan’s oil production increased by more than 13% over 2008, to 50.6 million tonnes. Because approximately 45% of the country’s economic performance results from the production and export of crude oil and natural gas, this increase was the key to the 9.3% positive development of the real gross domestic product.

Highest growth rates in the service sector
Growth outside of the oil sector is driven first and foremost by the service sector and agriculture. Trade showed the highest growth rates in 2009. The agricultural sector improved on its 2008 result by approximately five percent in 2009. Growth outside of the oil sector is estimated at 4.2% for 2010 by the International Monetary Fund (IMF).

Scientific analysis of the market of the future
with considerable development potential
A study commissioned by the Austrian foreign and economic ministries from the Austrian Institute of Economic Research recommends the “systematic pursuit of opportunities using business and political means”. According to the study, the relations with the broader Black Sea region are “good, but clearly able to be expanded”. Austria’s exporters in particular must diversify in order to open up new export markets and to avoid being disproportionately dependent on one region in times of crisis.

The study finds that the greatest potential amongst the group of Caucasus countries is in Azerbaijan – in particular for suppliers for the crude oil and natural gas industry, but also in the delivery of natural gas (Azerbaijan is a key market for the Nabucco pipeline) and in the modernisation of the agricultural sector. Tourism could also present great opportunities for Austrian firms – not only in the export of goods, but also in the export of services (the planning of winter sport centres and training). Events such as the EURO 2012 and the 2014 Olympic Games in Sochi create enormous opportunities.

Opportunities for Austrian firms
“Made in Austria” is taken as a guarantee of high quality goods and services, precise engineering and technical know-how in Azerbaijan, according to the Austrian foreign trade office. “In the past few years, notable Austrian firms have been able to land some spectacular large-scale projects in Azerbaijan, which has allowed them to gain important experience in this difficult, opaque, but promising CIS market that is just a couple of hours’ flight from Austria. Austria’s exports to Azerbaijan are currently worth 42 million euros, and could double in the coming years”.

In 2010, Azerbaijan’s GDP will grow again, as will the demand for Austrian exports. Meanwhile, Azerbaijan’s need to modernise creates great opportunities. Investments in infrastructure, telecommunications, environmental technology and green energy are considered secure. These investments, coupled with the privatisation of the country’s heavy industry, open up chances for Austrian firms to enter the market.



Publications & Events Austrian foreign trade office in Moscow (German)


Website AdvantageAustria



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