Is Azerbaijan a Wealthy Country? What About Its Citizens?

"Azerbaijan is currently among 54 middle-income countries," said Shahmar Movsumov, head of the Economic Affairs and Innovative Development Policy Department of the Presidential Administration, during the presentation of the World Bank’s World Development Report 2024 in Baku on February 10.

According to Movsumov, economic diversification has been a key factor in the country’s sustainable development: "While the non-oil sector's share in gross domestic product (GDP) was 49% in 2011, it has reached 68% in 2024."

But can Azerbaijani citizens take pride in their income levels?

According to the State Statistics Committee, the nominal income of Azerbaijan’s population in 2024 amounted to 83.1 billion manats, a 6.4% increase compared to 2023. Over the past year, the nominal per capita income rose by 5.9% to 8,144 manats.

The Ministry of Economy reported that Azerbaijan’s GDP in 2024 amounted to 126.3 billion manats, reflecting a 4.1% increase compared to the previous year. The value-added growth in the oil and gas sector was 0.3%, while in the non-oil and gas sector, it was 6.2%. Per capita GDP stood at 12,382.5 manats.

Economist Zohrab Ismayil told Radio Azadlıq that Azerbaijan is indeed classified as a middle-income country: "This means that countries in this category have a GDP per capita ranging from $2,000 to $13,000. In Azerbaijan, this figure is approximately $7,000. In Turkey, for example, it exceeds $13,000."

According to Ismayil, the World Bank report should serve as a warning to Azerbaijan:
"This report signals that Azerbaijan is in the middle of the middle-income category, not at the top. Unfortunately, our neighbors are ahead of us. In terms of GDP per capita, Azerbaijan lags behind both Georgia and Armenia. In other words, despite being rich in underground resources, Azerbaijan’s performance is weaker, which indicates a concerning situation."

Ismayil believes Azerbaijan must draw conclusions from this report: "Everything in Azerbaijan is built around the oil and gas sector. There might be manipulations in the GDP structure, but the fact remains that today, 88% of Azerbaijan’s exports come from the oil and gas sector, while only 12% are from the non-oil sector. This ratio has not changed significantly since the oil boom began. In previous years, the share of the oil sector may have been 1-2% higher, but the current decline is due to falling oil prices."

He also pointed out that salaries in Azerbaijan remain relatively low: "According to 2024 figures, the average monthly salary has exceeded 1,000 manats, but this is the pre-tax amount. Even with this figure, we are still behind Armenia and Georgia."

Economist Natiq Jafarli, in contrast, approaches the issue differently. Speaking to Turan, he noted that official statistics show a significant increase in the average monthly salary in Azerbaijan: "Over the past two to three years, wages have risen by 20%, and over the past decade, by almost 50%. However, there are questions regarding the calculation methods. Typically, salaries in different sectors are calculated separately and then averaged out based on the number of employees."

Jafarli argues that this method is flawed: "Salaries in the banking and oil sectors are indeed high, but the number of employees in these fields is small. Meanwhile, in education, salaries are low, but the number of employees is large. This creates an imbalance, raising questions about the accuracy of the average salary calculation."

He also acknowledges that GDP and the share of the non-oil sector have increased, but he questions the classification system: "There have been non-standard adjustments in how the 'non-oil' sector is defined. Many sectors have been categorized as non-oil, even though they are fundamentally linked to oil revenues. For instance, one of the largest non-oil exporters is a subsidiary of the state-owned oil company SOCAR."

Jafarli argues that such reclassifications distort the actual picture: "Revenue from the oil sector enters the budget, which is then allocated to sectors such as construction, generating added value. This is recorded as part of the non-oil sector, but its source remains oil money."