Azerbaijan has an economy that has completed its post-Soviet transition into a major oil based economy (with the completion of the Baku–Tbilisi–Ceyhan pipeline), from one where the state played the major role. Azerbaijan's GDP grew 41.7% in the first quarter of 2007, possibly the highest of any nation worldwide. Such rates cannot be sustained, but despite reaching 26.4% in 2005 (second highest GDP growth in the world in 2005 only to Equatorial Guinea), and 2006 over 34.6% (world highest), in 2008 dropped to 10.8%, and dropped further to 9.3% in 2009. The real GDP growth rate for 2011 was expected at 3.7% but had dropped to 0.1%. Large oil reserves are a major contributor to the economy. The national currency, the Azerbaijani manat, was stable in 2000, depreciating 3.8% against the dollar. The budget deficit equaled 1.3% of GDP in 2000.
Progress on economic reform has generally lagged behind macroeconomic stabilization. The government has undertaken regulatory reforms in some areas, including substantial opening of trade policy, but inefficient public administration in which commercial and regulatory interests are co-mingled limit the impact of these reforms. The government has largely completed privatization of agricultural lands and small and medium-sized enterprises. In August 2000, the government launched a second-stage privatization program, in which many large state enterprises will be privatized. Since 2001, the economic activity in the country is regulated by the Ministry of Economic Development of Azerbaijan Republic....LESS