Although Azerbaijan has received over $120 billion in foreign investment since its independence, the funds have largely been destined for the oil and gas sector over the past two decades. While FDI continues to flow into the country, the government seeks to expand the number of investments being made in the real economy. In a speech on February 12, 2013, President Ilham Aliyev highlighted Azerbaijan's emergence as a nation seeking not only to make investments abroad, but also to continue to attract huge amounts of FDI, especially in the non-oil sector. With the economy undergoing a comprehensive diversification process, an increasing amount of foreign investment is being allocated to other segments of the economy, with the industry and ICT segments showing the most potential in 2013.
In 2012, a total of $22.1 billion was invested in Azerbaijan's economy, of which $13.3 billion was domestic and $8.8 billion foreign sourced. According to the Minister of Economic Development, Shahin Mustafayev, the growth and implementation of large regional and international projects, as well as the fulfillment of different infrastructure projects, has attracted the most investment.
Revealing a distinct upward trend, FDI flowing into the country has increased by 5.2% since 2010, when the figure reached $8.2 billion, and by 2% since 2011, when FDI amounted to $8.6 billion. According to the latest data published by Azstat, 42% of foreign investments are received as financial loans and 39% are directed toward the oil and gas industry. Meanwhile, companies with joint and foreign investment have continued to demonstrate a steady increase in their contributions, with a significant 25% increase in FDI from 2010 to 2011, when the figure grew from $659 million to $886 million.
To maintain this consistent foreign investment growth pattern, two primary vehicles are working to promote Azerbaijan as a secure and reliable partner for FDI. As the main vessel for directing potential investors to opportunities in the country, the Azerbaijan Export and Investment Promotion Foundation (AZPROMO) plays an important role in increasing FDI flows and fostering the expansion of the country's export capacities. “One of the major tools we apply to achieve these objectives is the organization of various events such as business forums, business meetings, and round tables, which offer platforms for establishing new contacts," Rufat Mammadov, Acting President of AZPROMO, told TBY. In 2012 alone, the company organized 308 events abroad and in Azerbaijan, which over 5,000 entrepreneurs attended. As a sister company of AZPROMO, Azerbaijan Investment Company works to offer its expertise regarding current market trends, identify investment opportunities for foreign investors, and provide technical support in preparing market research. Through such research, the company has identified agriculture, logistics, renewable energy, and tourism as key segments for the development of the country and attractive for foreign investors.
However, the ICT sector has received the most non-oil FDI as of late, largely due to the massive projects Azerbaijan is engaged in as part of its role as a geostrategic Caspian nation. Some projects that have garnered the most attention are the Trans-Eurasia Super Information Highway, the Regional Innovation Zone that promotes the production of ICT goods, services, and exports, as well as the development of Azerspace-1, the country's first satellite.
Industry is another leading area of the economy, and is arguably becoming the second most attractive sector for investment.
According to Minister Mustafayev, “A favorable institutional and investment environment has been created to develop industry and the production capacity of enterprises. Fields such as engineering, chemistry, metallurgy, and energy have great development potential."