Policy reforms key to accelerating Azerbaijan’s path to high-income status [EXCLUSİVE]

On February 10, 2025, the World Bank launched its 2024 World
Development Report (WDR) in Baku, shedding light on the challenges
and opportunities countries face in overcoming the “middle-income
trap.” During the event, Rolande Pryce, the World Bank’s Country
Director for the South Caucasus, offered key insights into
Azerbaijan’s economic outlook. She discussed the country’s current
position and the strategic approaches it can adopt to transition
toward becoming a high-income economy.

In her interview with Azernews, Pryce provided
further analysis on Azerbaijan’s economic trajectory, outlining the
path the country could take to achieve high-income status.

Pryce began by highlighting the significance of the Greater
Heights report (Growing to High Income in Europe and Central Asia),
which focuses on the economic trajectories of Central Asia, Eastern
Europe, and the South Caucasus.

“We’re very excited about this report,” she noted. “It’s a
companion to the 2024 World Development Report that focuses on the
middle-income trap, and it allows us to zoom in on the economies of
Europe and Central Asia.”

She emphasized that out of the 34 countries that have
transitioned to high-income status 10 are from Europe and Central
Asia.

“This is a great opportunity for Azerbaijan, as several of its
regional peers have made this transition,” Pryce explained.
Currently, Azerbaijan is classified as a high-middle-income country
and aspires to achieve high-income status.

Pryce pointed out that the Greater Heights report outlines
potential policy actions that the government of Azerbaijan could
consider in order to facilitate this transition. “The report
identifies strategies and actions that could help the country move
forward,” she said.

She further emphasized the importance of aligning government
policies with the right investments and institutional strengthening
to support this transition. “Azerbaijan is in a good position, and
with the right mix of policy reforms, it can accelerate its move to
high-income status,” she noted.

Pryce concluded by stressing that the report’s findings offer
valuable lessons for Azerbaijan to learn from its regional peers
who have successfully navigated the path to high-income status.
“The opportunities are there, and with continued focus and the
right steps, Azerbaijan can achieve its goal,” she stated.

When asked about the “3I” strategy highlighted in the 2024 World
Development Report, Rolande Pryce explained, “The 3-I strategy is a
key component of the World Development Report. It stands for
Investment, Infusion, and Innovation.”

She elaborated on the three phases of the framework, starting
with the first phase: Investment. “The first phase focuses on
creating a strong foundation through investments in physical
infrastructure, human capital, and a conducive business
environment,” Pryce explained. “This phase requires building strong
institutions that will attract both domestic and foreign
investments.”

The second phase, Infusion, is about integrating global
technologies and knowledge into the domestic economy. “It’s about
getting local actors to work at an international level and building
the capacity to bring these technologies into the economy,” she
noted.

Finally, Pryce discussed the Innovation phase. “The third phase
is when countries no longer simply mimic global technologies but
begin to push the technological frontier themselves,” she stated.
“Azerbaijan’s focus should be on developing its own products,
services, and technological advancements, which would help improve
productivity, efficiency, and global competitiveness.”

Pryce emphasized that this framework is highly relevant to
Azerbaijan’s aspirations of moving from a high-middle-income status
to a high-income status. “Azerbaijan’s future growth will depend on
its ability to advance through these phases,” she concluded.

In conclusion, the World Bank’s 2024 World Development Report
provides a critical roadmap for Azerbaijan as it seeks to
transition to high-income status. Rolande Pryce emphasized the
importance of the “3I” strategy — Investment, Infusion, and
Innovation — in this context. According to Pryce, Azerbaijan is at
a pivotal stage where strategic policies, targeted investments, and
structural reforms can drive significant progress toward achieving
its high-income aspirations.

The first phase of the “3I” strategy, Investment, focuses on
building strong foundations through infrastructure development,
human capital, and fostering an environment that attracts both
domestic and international investments. Moving to the second phase,
Infusion, involves integrating global technologies and knowledge
into the domestic economy, which will help elevate local businesses
and industries to compete on a global scale. Finally, the
Innovation phase is key for Azerbaijan to not only adopt but also
push the technological frontier, fostering its own advancements and
innovations.

With a careful balance of these strategies, Azerbaijan has the
opportunity to overcome the middle-income trap and emerge as a
competitive, globally integrated economy. The report suggests that
with the right mix of policy actions, Azerbaijan can leverage its
existing potential and continue on its path toward sustainable,
high-quality growth in the years to come.

_{Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.}