Azerbaijan’s WTO Accession Process and Its Potential Impact on Vulnerable Non-Competitive Segments of the Economy

The study provides information about the prospective impact of trade and investment liberalization, especially for those economic sectors likely to be characterized as non-competitive in the post-WTO accession period. It also seeks to provide some guidelines on policy and institutional adjustment options and mechanisms that could help cushion the transition process for entrepreneurs and workers whose predominant source of income is related to those sectors. The first part of the report examines the structure and growth trends of non-oil economy, especially in terms of vulnerable non-competitive segments of the economy. The next part evaluates the overall effects of Azerbaijan’s trade liberalization as it related to the impact of the trade and investment integration processes on future sectoral GDP and employment growth performances. The penultimate part assesses the likely impact of liberalization on poverty levels and income distribution associated with income growth. Finally the study provides a set of policy and institutional adjustment options and mechanisms to cushion the transition process, as well as an action plan and transition strategy to maximize impact of the trade and investment integration.