Azerbaijan faces a unique opportunity to propel itself into the ranks of a sustainable higher middle income country. Its remarkable success in reducing poverty from 49 percent in 2001 to about 9 percent in 2010 was largely driven by very high growth rates which averaged more than 16 percent for the period. Oil sector was the key driver of this rapid growth, which, given plateauing production, may not be available in few years. Therefore, Azerbaijan needs to uncover new sources of growth to sustain the same pace of economic growth. This underlines the need for a diversified economy, market-based policies, and strengthened social services and support. As the Government prepares to meet these emerging needs and challenges, the World Bank Group Country Partnership Strategy, covering the period from 2011 to 2014, seeks to support the country in this endeavor. The design of the Country Partnership Strategy reflects the key challenges facing Azerbaijan in the medium term. It is tightly focused on achieving results in two key areas: (i) building a competitive non-oil sector and (ii) strengthening human and social services. These two pillars constitute independent developmental objectives but, at the same time, they are mutually re-enforcing.
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