BAKU, Azerbaijan, June 11. Azerbaijan’s economy has the resources, geography, and institutional capacity to double GDP over the next decade, Jamal Ismayilov, Azerbaijan and Central Eurasia Lead at Oliver Wyman, a global leader in management consulting and a business of Marsh (NYSE: MRSH), said in an exclusive interview with Trend.
"What stands out to me, having followed Azerbaijan’s development over many years, is how much the conversation has shifted: it has moved from talking about diversification to actively building alternatives to hydrocarbons, particularly in logistics and selected manufacturing. In 2025, we already saw faster growth of non-oil and gas sectors. In 2026, Azerbaijan’s GDP is expected to expand between 2.5%-3.0%, while the non-oil and gas sector is expected to grow above 4%. That’s genuine progress, but it is not enough. Oil and gas still generate over 40% of GDP value added, while services account for under half of GDP, significantly below global and peer benchmarks. So, the opportunity is substantial and Azerbaijan’s economy has the resources, geography, and institutional capacity to grow much faster, and even to double GDP over the next decade. Such acceleration does require a decisive shift toward scalable, high‑margin, export‑oriented activities, particularly services and downstream energy," he said.
Ismayilov pointed out that the time for incremental diversification has passed, the next phase requires decisive prioritisation and faster execution.
Talking about the sectors, which offer the strongest medium- and long-term growth potential in Azerbaijan, the representative of Oliver Wyman said there’s clear evidence that a core set of sectors have the potential for scale, profitability, and competitive advantage in Azerbaijan.
"In Oliver Wyman’s work across similar economies, this kind of focus tends to be what separates momentum from dilution. Based on our research, four stand out:
- Downstream and advanced petrochemicals, not basic refining, but high‑value "downstream‑of‑downstream" products where margins and global demand are strongest.
- Energy‑adjacent services and trading, capturing value from finance, risk management and commercialisation of flows, not just physical exports.
- Logistics orchestration along the Middle Corridor, moving from transit geography to trade intelligence and coordination.
- Experience‑based tourism and entertainment, centred on Baku as a regional hub.
While agriculture and traditional manufacturing are important socially, even optimistic scenarios show they cannot move the GDP needle at scale. International investors should focus where Azerbaijan can realistically compete regionally and globally, not just domestically," he explained.
Ismayilov went on to add that Azerbaijan should focus on harmonised corridor governance to enhance its role as a regional hub.
"Geographically, Azerbaijan is exceptionally well positioned, sitting at the intersection of Europe, Central Asia, and the Middle East, with modern ports, rail, and energy corridors already in place. That puts the country in a strong starting position. However, true hubs control flows, pricing, data and risk, not just movement. That’s where, at Oliver Wyman, we really see the next layer of value creation sitting. Today, Azerbaijan largely earns transit fees; the next step is to focus on the higher‑value coordination, contracting, and intelligence layers. To enhance its role, Azerbaijan should focus on harmonised corridor governance, digital trade documentation, logistics finance and insurance capabilities, and institutions that can arbitrate complexity across borders. In short, the shift must be from corridor to orchestrator. Places such as Singapore or Rotterdam show that this is where most value is created, and achieving this is possible with the assets Azerbaijan already has," said the representative of Oliver Wyman.
Opportunities in financial sector development?
He believes that financial sector development is one of the biggest untapped multipliers in Azerbaijan’s growth story.
"In my experience, this is often the factor that determines whether other sectors truly scale. Banking modernisation is progressing, but capital markets remain shallow, and service exports in finance minimal. In upper‑middle productivity economies, financial and ICT services generate billions annually, while in Azerbaijan they are still marginal.
The opportunity is not to replicate London or Frankfurt, but to build specialised financial capabilities:
- commodity and trade finance linked to energy and logistics
- regional risk management and insurance
- sustainable and transition finance aligned with energy transformation
- and structured financing for infrastructure and PPPs
This requires regulatory credibility, predictable frameworks and openness to international financial talent. Without a stronger financial services backbone, other growth sectors won’t be able to scale," said Ismayilov.
Role of digital transformation and innovation
He went on to add that digital transformation is a core economic enabler.
"Across logistics, energy trading, finance and tourism alike, value increasingly comes from data, algorithms and platforms, not simply physical assets. Our analysis shows that without digital control towers, AI‑enabled routing, or automated settlement and compliance, Azerbaijan risks remaining a low‑margin participant even as volumes grow. Equally important, digitalisation improves governance, transparency and investor confidence, which are all critical for attracting high‑value FDI. Countries that embed digital standards early lock in competitiveness; those that lag struggle to catch up," said Ismayilov.
The Oliver Wyman representative believes that several global shifts work strongly in Azerbaijan’s favour:
- Supply‑chain diversification is increasing demand for the Middle Corridor.
- Energy market fragmentation raises the value of regional trading hubs and intermediaries.
- Growth of services trade, particularly knowledge‑based exports, benefits smaller, agile economies.
- Experience‑driven tourism is expanding faster than traditional tourism models.
"However, these trends are not permanent tailwinds, and many countries are competing for the same opportunities. Timing matters, and Azerbaijan will benefit if it moves faster and more decisively than peers," he added.
Azerbaijan 3.0
Ismayilov pointed out that previous growth cycles were driven by resource extraction and then infrastructure build‑out.
"Azerbaijan 3.0 is fundamentally different. It is about where value is captured, not just what is produced. The model shifts the country from:
- selling molecules to monetising flows,
- hosting corridors to owning coordination,
- extracting resources to exporting services and experiences.
It is also more disciplined. Rather than pursuing broad diversification, it focuses national resources on a small number of engines capable of compounding at scale. That’s the difference between steady growth and a structural leap," he noted.
Talking about the most important structural reforms, Ismayilov said that three stand out:
- A decisive pivot to a service‑led growth model, embedded in regulation, education, and investment policy.
- Opening the economy to foreign human and financial capital, recognising that domestic pools alone are insufficient for the next phase.
- Institutional reform focused on execution, clear mandates, measurable KPIs, and accountability in priority sectors.
"These are not easy reforms, and they involve trade‑offs. But without them, Azerbaijan risks being stuck in low‑single‑digit growth despite its substantial assets and advantages," he added.
Role of human capital and skills transformation
He noted that human capital is one of the key binding constraints.
"In my view, progress here will ultimately determine the pace of everything else. Service‑led growth depends on skills in finance, logistics, analytics, digital platforms, legal structuring, and international deal‑making. These capabilities do not emerge organically in small labour markets. This is why nationally coordinated skills programmes, often in partnership with global institutions, are essential. Oliver Wyman’s experience globally shows that targeted capability‑building, linked directly to priority sectors, can materially accelerate reform outcomes. Put simply, without rapid skills transformation and openness to global talent, even the best economic strategy will remain theoretical," he said.
