Azerbaijan should unlock the full potential of its tourism sector to drive long-term economic growth, diversify its economy and create jobs as reliance on hydrocarbons declines, the World Bank has said.
Speaking at the event, Unlocking Azerbaijan’s Tourism Potential to Drive Economic Growth and Diversification, in Baku, Rolande Pryce, the World Bank's Regional Director for the South Caucasus, said Azerbaijan’s future prosperity would increasingly depend on strengthening its non-oil economy.
She noted that Azerbaijan had demonstrated resilience to external economic shocks in recent years through prudent macroeconomic management, strong fiscal reserves and sound government policies.
“Against the backdrop of a gradual decline in hydrocarbon production, the role of the non-oil sector will increase in ensuring sustainable economic growth and creating high-quality employment. In this regard, tourism is assessed as one of the areas with the greatest potential for accelerating economic growth and diversifying the economy,” Pryce said.
The event marked the presentation of the latest Azerbaijan Country Economic Update, published twice a year by the World Bank. The report reviews the country’s recent economic performance, medium-term outlook and key risks.
This edition placed particular focus on tourism and its potential to contribute to economic diversification, job creation and long-term resilience.
Participants included senior government officials, development partners, private sector representatives, academics and tourism experts. Discussions highlighted that while Azerbaijan has delivered solid economic performance in recent years, accelerating diversification remains a key national priority.
“For the main takeaways from the report, we feel that Azerbaijan has extremely strong fundamentals, good policy buffers and good macro-fiscal management, but that it needs to focus on economic diversification,” Pryce said.
She added that diversification was already a central part of the policy dialogue between the World Bank and Azerbaijani officials.
According to the World Bank, tourism is increasingly viewed as one of Azerbaijan’s most promising sectors for sustainable long-term growth. The report highlighted the country’s strategic geographical location, improving transport connectivity, expanding tourism infrastructure, and rich cultural and natural heritage.
Pryce said Azerbaijan’s tourism industry should evolve beyond its current concentration on Baku and event-based tourism by developing a more diversified model that unlocks the economic potential of the country’s regions.
“Tourism can generate benefits well beyond visitor numbers by creating opportunities for local businesses, attracting investment, boosting employment, particularly for women and young people and distributing the benefits of economic growth more evenly across Azerbaijan’s regions,” Pryce said.
At the event, the World Bank unveiled a roadmap of recommendations aimed at accelerating tourism development and supporting broader economic diversification.
Key recommendations included:
Speakers also noted that sustained peace and continued transport development across the region would further strengthen Azerbaijan’s appeal as a tourism destination.
The World Bank stressed that a stronger tourism ecosystem would stimulate growth not only in hospitality but also in transport, agriculture, retail and small and medium-sized enterprises.
Pryce noted that the Azerbaijani government had already identified tourism as a strategic priority, but that the next challenge would be translating policy ambitions into concrete investment projects and effective public-private cooperation.
“The Azerbaijani government has already identified tourism as a strategic priority. The next key task is to translate these plans into concrete investment projects, strengthen cooperation between the public and private sectors, and increase the competitiveness of regions in the international tourism market,” Pryce said.
Participants agreed that tourism is becoming a central pillar of Azerbaijan’s economic development strategy. While the country has already made significant progress, they emphasised that continued reforms, targeted investment and stronger public-private collaboration will be essential to fully unlock the sector’s potential.
With hydrocarbon production expected to decline gradually over time, the World Bank’s message was clear: tourism can play a crucial role in helping Azerbaijan build a more diversified, resilient and inclusive economy.
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