Friday, 03 November 2017 11:47

Non-oil sector is driving Azerbaijan’s economic growth - Khagani Guluzade


Khagani Guluzade, top-manager, expert in banking, finance, investments, construction and industry


Headed one of the largest transnational corporations of the non-oil sector in 2010-2013.

Held managerial positions at leading Banks of Azerbaijan as the First Deputy Chairman of the Board and Chairman of the Board. Was in charge of the working group which carried out a successful placement of Eurobonds. A graduate of the Azerbaijan State University of Economics with a master’s degree in finance and a degree in law of the Baku State University (both with honors). Holds a PhD in Economics. Has successfully defended a dissertation on the subject of “Priorities of the state investment policy in the development of the national economy”.

Having defended a dissertation “Efficiency of direct foreign investments in Azerbaijan”, he gained a master degree in the field of “Global Administrative Management” at London School of Economics and Political Science (LSE) in 2015 via the “Executive Global Master’s in Management” program.

Double winner of the “Manager of the Year” prize awarded by the European Business Assembly in 2011 in the city of Oxford (Great Britain) and in 2013 in London (Great Britain).

In general, has about a 18-year managerial experience, including broad work experience with international financial institutions, investment funds and leading world banks.

Founder of the “Golden Glove” sports club, co-founder of the Azerbaijan Kickboxing Federation.

Married. Has three children.


Azerbaijan has always been a junction hub or the bridge of the transport corridor Europe-Asia


Caspian Energy (CE): Serious reforms are currently introduced in Azerbaijan. Road maps on development of different branches of economy have been adopted. Which lines of the economy can drive the development of the non-oil sector and bear utmost priority in terms of development of export-oriented production?

Khagani Guluzade: First of all, it must be noted that the economic situation in Azerbaijan is the most satisfactory compared to the neighbor countries. Moreover, Europe, USA and other regions are still feeling the consequences of the global crisis.

Recent decrees and orders given by President Ilham Aliyev are being executed. So, I think that Azerbaijan will manage to overcome the present turbulence in the economy and ensure the economic growth. Of course it is hard to make predictions, but at present we see oil prices varying around $50-$60 per barrel which means an additional boost for the economy. Azerbaijan has not only the oil sector but also a non-oil sector developing. High hopes are fastened on the latter.

In my opinion, agriculture, tourism, transport and logistics can be considered priority sectors at present. The steps taken in these sectors will yield results in coming years and Azerbaijan will ensure its development through the non-oil sector.

Of course, it is the development of the agriculture that must be given a due attention in the non-oil sector. First of all, it is of big importance in terms of improvement of food safety and employment. On the other hand, once the domestic demand is met, the excessive agricultural products will be freely exported to close markets. It refers both to crop and animal production.


There is a potential to turn Azerbaijan into a financial-banking center of the Caucasus


On the other hand, the transport-logistics center is of big interest. Azerbaijan has always been a junction hub or the bridge of the transport corridor Europe-Asia. Very important measures have been taken in this area to determine a single tariff policy, which will yield enormous benefits to the country. At the same time, serious steps are also taken in regard to the North-South logistics corridor. In general, both railway and maritime transportation need to be improved in order to boost and intensify freight turnover. These sectors are the most attractive for ensuring the currency inflow into the country.

Of special note is the tourism potential. This sector is of importance both in terms of the country’s recognition and gaining of additional dividends for the revival of the economy.

The financial-banking sector is of interest as well. Despite the fact that it is experiencing hard times now, there is a potential to turn Azerbaijan into the financial-banking center of the Caucasus.


It is necessary to regain the trust of the population in financial-banking system


CE: Which steps should be taken to develop the financial sector?

Khagani Guluzade: First of all it is necessary to regain the trust of the population in the financial-banking system. Bankruptcies and unsatisfactory condition of banking institutions, non-banking credit organizations and insurance companies led to the reduction of trust of people in the financial-banking sector of the country. Certain measures need to be taken to increase the trust and now the bodies of the executive power are taking important steps to resume the trust in the financial sector. However, these steps must be strengthened by the regulating bodies. Meanwhile, Media is also playing a big role here. Positive steps have to be disclosed and manifested in order to get rid of the pessimistic thoughts about the financial sector. It concerned domestic processes.

Besides, our commercial banks have to strengthen cooperation with international structures in order to attract additional foreign capital and foreign investors, which will make this sphere sustainable. 



CE: Do you expect the entry of local products into international stock markets in near or remote future?

Khagani Guluzade: Our companies have not reached the level to hold IPO and to be listed at global stock markets. I think in the coming years the IPO will not meet the set objectives either. But within the framework of the strategic goal it is necessary for companies to be listed at major global stock markets.

It takes time and once our companies gain certain experience in the local market, especially at BSE, they will be able to hold IPO as well.

I think that the banking sector of the country which established cooperation with international institutions and introduced IFRS standards had perfect opportunities to hold IPO five years ago. But the recent closing of a number of banks and some negative events in the banking sector caused postponement of this process. In my opinion, no IPO in the domestic market shall occur in the coming three years.


The largest cement plant of the Caucasus was commissioned in Gazakh district 


CE: For many years you worked in the financial sector as a Chairman and First Deputy Chairman of the leading banks of the country. An advanced experience and new banking products were introduced in Azerbaijan in the period of high oil prices. Which lines in this sector are of most interest to attract currency inflow into the country?

Khagani Guluzade: In 2003-2010 I held managerial positions at Azerbaijani banks. We managed to deliver very interesting products to the market over that period. We performed Eurobond issue in the private banking sector for the first time and placed them successfully at foreign markets. In this way, we managed to attract cheap financial resources to the local market.

Cooperation with such financial market giants as City Group, Morgan Stanley and JP Morgan has been another important aspect which also made it possible to attract cheap financial resources and meet certain needs of our clients at the local market.

We gained positive results also from cooperation with large investment funds of different countries. In general, I think broader attention should be given to the international cooperation. In spite of the fact that we have our own big internal resources, we can balance them at a certain degree with cheap financial resources from external markets. Funds attracted from abroad for a 5-7 year period need to be considered here.


For the first time we held an audit through the mediation of foreign companies 



CE: For many years you headed one of the largest companies of the non-oil sector, which turned into the international corporation within a short period of time. What were your hopes when you took the company and how did you manage to extend its recognition from Europe to Asia?

Khagani Guluzade: That is not a job done by a single man but teamwork. If we look at the company’s activity during 2010-2013, it implemented big projects in Azerbaijan, Georgia, Kazakhstan, Ukraine, Afghanistan, Turkey and Uzbekistan. These projects were rather regional than country-based. Solemn opening of all these projects took place with the participation of the officials of the above-mentioned countries. These were transparent projects funded by international financial institutions.

Large-scale infrastructure projects in Azerbaijan – bridges, tunnels, highways were built and commissioned with the participation of the head of state of Azerbaijan.

The biggest cement plant of the Caucasus was commissioned in Gazakh district in order to develop the non-oil sector and the regions. The head of state of Azerbaijan attended its groundbreaking ceremony in 2007. Opening of the representative office in Germany can also be assessed as a serious event for the Azerbaijan Company. For the first time we held an audit through the mediation of foreign companies Deloitte and PricewaterhouseCoopers.

In general, a strong workforce capacity and teamwork were established. The growing interest of our country and support of the state, which we always felt, helped us to gain advantages while participating in foreign tenders.

Our work was assessed in London (Great Britain) and Paris (France). We received prestigious awards of the European Business Assembly.

Later, I continued my education under the support of our state at London School of Economics and Political Science (LSE) which ended up with the defense of the academic paper on the subject of “Efficiency of direct foreign investments in Azerbaijan’. Dissertation was met with interest in LSE and got highest distinction. Now it lies in LSE’s library for use.


We have felt the support and attention to our sportsmen since the first days Ilham Aliyev headed the National Olympic Committee 


CE: What are your future plans?

Khagani Guluzade: After completing my studies at London School of Economics and Political Science (LSE), for what I would like to express gratitude to our state which created this unique opportunity for me, large corporations in Canada and Singapore offered me a position of the top-manager. Now I am cooperating and providing consulting services to a number of transnational companies and investment funds.

But staying committed to the goal – to introduce gathered experience and knowledge for the welfare of our country and economy, I will try to realize my potential in this area in Azerbaijan.


For many years to come the Golden Glove Sports Club will train sportsmen who raise Azerbaijan’s flag at international contests


CE: Particular attention is given to the development of sports in Azerbaijan. We hosted the first European games and now we are getting ready for the IV Islamic Solidarity Games. Formula 1 races are held. You were actively involved and paid particular attention to the development of sports throughout your activity. Your support to ‘Golden Glove’ sports club helped to train several world and European champions who raised the flag of Azerbaijan. Where does your interest in sports come from?

Khagani Guluzade: All-National Leader of Azerbaijan Heydar Aliyev raised interest in sports among our youth. We have felt the support and attention to our sportsmen since the first days Ilham Aliyev headed the National Olympic Committee.

I have gone in for sports since my childhood. I took Judo at Dynamo center. Later, I took kickboxing when I was a student. I created a Golden Glove sports club in 1998. Since then the Golden Glove Sports Club has been through an interesting, responsible and at the same time a glorious way. At present there are separate boxing, kickboxing, judo and karate sections operating in the club. Sportsmen representing each section win top positions both at republican and international contests. The Sports Club has trained the world champion on boxing and several world and European champions on kickboxing. In January 2017 the Golden Glove Sports Club won the republican championship on kick boxing among the youth in the team event. The Club has many achievements and it is going to take long before you count all of them. Now I can get myself more involved in the work of the Club as I am back to homeland and I believe that for many years to come the Golden Glove SC will train sportsmen who raise Azerbaijan’s flag at international contests.

Each sportsmen of the Club is a future soldier who has a potential wish to contribute to the liberation of our occupied lands under the direction of the Senior Commander President Ilham Aliyev.


Thank you for the interview


Caspian Energy



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