The government of President Aliyev is aware of the potential dangers of building an economy that is overly dependent on a single industry or economic sector oil and the risk that this industry could inadvertently hinder the development of other sectors of the economy. The goal of Azerbaijan s economic policy is to achieve balanced growth. Traditionally, industry and agriculture have been the leading economic sectors. Industry accounted for 23 percent of Azerbaijan s GDP in 1996, while agriculture contributed 22.9 percent. Economic Reforms Are Yielding Impressive Results During the past two years that economic reforms have been in place, Azerbaijan s economy has been undergoing a structural shift, in which services, transportation, communications, trade and construction sectors are rapidly expanding.
Macroeconomic indicators are in line with the reform program s targets.
In the first half of 1998, Azerbaijan achieved a 9 percent increase in GDP, building on the 5.8 percent growth level for all of 1997. Azerbaijan s currency the manat has appreciated against the U.S. dollar in recent months. Azerbaijan is also building up its foreign reserves, which have more than doubled since the end of 1996. In addition to the economic reforms, Azerbaijan undertook several important structural changes in 1997 and early 1998. Recently, the IMF commended Azerbaijan for its success in achieving macroeconomic stabilization under the economic reform program.