Implementation of the "3i strategy" will allow Azerbaijan to move into the group of high-income countries, World Bank (WB) Regional Director for the South Caucasus Rolande Pryce said during the presentation of the World Bank's annual global "World Development Report" (WDR) for 2024, Report informs.
Pryce emphasized that education and competency development play a key role in stimulating innovation and increasing productivity.
"The report proposes a “3i strategy” for countries to reach high-income status. Depending on their stage of development, all countries need to adopt a sequenced and progressively more sophisticated mix of policies. Low-income countries can focus solely on policies designed to increase investment—the 1i phase. But once they attain lower-middle-income status, they need to shift gears and expand the policy mix to the 2i phase: investment and infusion, which consists of adopting technologies from abroad and spreading them across the economy. At the upper-middle-income level, countries should shift gears again to the final 3i phase: investment, infusion, and innovation. In the innovation phase, countries no longer merely borrow ideas from the global frontiers of technology—they push the frontier.
On the other hand, middle-income countries are hampered by an imbalance among the forces of creation, reservation, and destruction. The forces of creation are weak, the forces of preservation are strong, and destruction is held back by the forces of preservation. Middle-income countries must therefore balance these forces.
That means disciplining incumbency to weaken the forces of preservation, rewarding merit activities—those with positive effects on general well-being and that aid in the efficient use of talent, capital, and energy—to strengthen the forces of creation, capitalizing on crises to aid the destruction of outdated policies and institutions that are difficult to dislodge during boom times.
These principles can help middle-income countries continuously recalibrate the mix of investment, infusion, and innovation to keep economic growth robust.
As Azerbaijan is an upper middle-income country aspiring to reach high-income status, we expect the discussion is particularly pertinent for the country. It offered an opportunity for key policymakers to exchange new ideas on the economic development in Azerbaijan and share lessons learned, as well as to reflect on the findings of the WDR and its relevance for shaping future policies," she noted.
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