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The United States Government has three long-term strategic interests in Azerbaijan: security, energy, and internal reform. Azerbaijan’s strategic significance derives from being a secular state with a Muslim-majority population and traditions of religious tolerance that lies at the crossroads of the Middle East, Central Asia, and Europe, anchors the emerging Southern Corridor to help Europe diversify its supplies of natural gas, and which, if successful in evolving into a market democracy, can inspire reformers in the region and beyond.

While the country’s oil wealth has resulted in impressive economic growth and poverty reduction, it is important for Azerbaijan to diversify its economy to prepare for the anticipated fall in oil production and petroleum generated revenues. To promote the growth of the non-oil sector it will be necessary to improve the business environment, encourage competition and attract more foreign direct investments. Azerbaijan will face several challenges as it continues its transition from an oil-based economy to a more diversified economy. Among the major obstacles are restrictive policies and regulations that discourage the growth of business and competition, as well as transparent governance.

The overall objective of USAID’s assistance in Azerbaijan is to support Azerbaijan’s reform processes by promoting competition and pluralism in the society, laying the foundations for a sustainable market-based democracy. To accomplish this objective, USAID partners with the Government of Azerbaijan, regional governments, the private sector and a wide range of civil society organizations (CSOs). USAID provides development assistance in three major areas: supporting the growth of the non-oil sector; strengthening participatory and transparent democratic and governance processes; and strengthening health care systems. USAID’s strategy is described in the Azerbaijan Country Development Cooperation Strategy (CDCS), 2011-2016, and provides detailed information on USAID assistance. This document can be found here.

Last updated: June 10, 2014

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