World Bank Managing Director Ngozi Okonjo-Iweala urged Azerbaijan on Wednesday to diversify its economy away from the oil and gas sector as the ex-Soviet republic approaches peak energy production.
"There is a peak in oil recovery and the passing of this peak makes it necessary to take steps to diversify the economy," Okonjo-Iweala told an economic forum in the Azerbaijani capital Baku.
Okonjo-Iweala also called on Azerbaijan to fight corruption and said the World Bank was ready to assist the ex-Soviet republic in carrying out economic reforms.
"Azerbaijan should carry out reforms in the sphere of fighting corruption, reducing customs duties, in the tax system and to improve the system of [government] licensing," she said.
Wedged between Russia and Iran, Azerbaijan is a key producer and transport hub for oil and gas heading from the Caspian Sea to Western markets.
But growth in oil and gas production has slowed in recent years after spectacular increases over the past decade. Azerbaijani President Ilham Aliyev said in June that the country's oil and gas output would be almost stable in 2009 compared to last year at about 45 million metric tons of oil and 21-27 billion cubic meters of gas.
Azerbaijan has also struggled with widespread corruption and was ranked 158th out of 180 countries in watchdog Transparency International's 2008 Corruption Perceptions Index.