As 2018 swiftly approaches, Menas is launching annual forecasts to help clients plan for the year ahead.

The Forecast is a new section in each of our publications, providing forward-looking analysis and assessments in these key areas:

  • Domestic politics and policy
  • Security
  • International affairs
  • Economy
  • Energy
  • Other industry

If you would like to receive the full version of The Forecast: Caspian 2018 then please contact the consultancy team

The Forecast: Azerbaijan 2018

 

Domestic politics and policy, the overview:

President Ilham Aliev remains firmly in control of the country, thanks in part to his high personal popularity, the continued wealth effect from oil and gas production, and a favourable constitutional setup. Aliev’s wife Mehriban Alieva became first vice president with extensive powers.

 

Security, the overview:

Domestic security is the major priority for the Aliev administration. It has dramatically cracked down on terrorism and religious extremism since early 2011 when the civil war in Syria started to attract foreign fighters from the former Soviet republics.

 

International affairs, the overview:

Relations with Turkey are the strongest. Tensions with Armenia regularly verge on open conflict over the Nagorno-Karabakh secessionist republic. Baku also remains close to Georgia, as its primary supplier of natural gas and a major trade partner.

 

Economy, the overview:

The Azeri economy remains heavily dependent on oil and gas revenues and growth will continue to be driven by energy exports in the foreseeable future. Growth prospects will remain bleak, however, because diversification reforms are not progressing as quickly as expected. Corruption and nepotism remain sizeable challenges.

 

Energy, the overview:

The extension of the Azeri-Chirag-Guneshli (ACG) PSA means that Azerbaijan will remain at the heart of the Eurasian oil industry for many decades to come. The country pins serious hopes on becoming a privileged supplier of gas to Turkey and Europe through the Southern Gas Corridor (SGC).

 

Other industry, the overview:

The government will continue to spend on priority projects in non-hydrocarbon sectors. Although manufacturing accounts for about 40% of GDP its growth has been stagnating.

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