Development of the industrial sector is one of the priority directions of socio-economic reforms currently undertaken in Azerbaijan. It covers fuel and energy, chemistry, mechanical engineering, metallurgy, food industry, light industry and other areas. As the result of radical changes in the national economy, serious successes have been achieved in the field of industry. The conclusion of production sharing agreements on September 20, 1994 on oil and gas fields with large foreign companies encouraged rapid development of oil and gas industry.
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The "open door" policy of the national government resulted in increase of the number of foreign and joint enterprises. The main objective of the state policy in the field of industry for the medium future will be the ensuring of steady and rapid production growth, structural improvement and increasing efficiency. The main activities will include the modernization and reconstruction of equipment facilities, increasing the competitiveness of national products, the flow and efficiency of investments, intensified development of non-oil sector and encouraging of development processes in the processing industry.
The favorable investment environment in non-oil sector, privatization processes and other reforms, will encourage non-oil sector development in near-term future. At the same time, special attention will be paid to the following activities for the development of non-oil sector:
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Intensification of restructuring and privatization processes;
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Continuation of restoration of the activity of enterprises who have potential sale markets and whose activity is deemed economically expedient;
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Intensification of the transition to international standards at the base of latest technologies;
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Development of free competitive environment;
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Intensification of the attraction of investments;
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Development of traditional national creative works;
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Strengthening and improvement of the material and technical basis of scientific-research institutes which correspond to the contemporary market requirements, for the purposes of the development of applied sciences.
Opportunities for industrial development existing in the country:
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Existence of raw materials reserves for development of various industrial sectors (oil processing, petrochemistry, metallurgy, et.) in the country;
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Existence of opportunities for supply of personnel to industrial development in the country;
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Existence of experience for development of a range of industrial sectors;
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Existence of a legislative base regulating production and economic activity in industry;
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Existence of financial sources for financing large investments into industrial development;
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Expansion of the size of domestic market on account of rising welfare of population and increase of purchasing power in the country;
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Industrial development as a priority of economic policy implemented by the government;
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Continuing policy for development of liberal market relations, strengthening activities of private sector and improving competitive environment in the country;
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Growth rates of regional economy in recent years leads to growing size of traditional sale markets of domestic industrial products and consequently to creation of favourable conditions for export of domestic industrial products;
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Growth rates of regional economy in recent years leads to creation of favourable conditions for development of regional division of labour.
