Polish think tank releases report on Azerbaijan

Thu 26 Sep 2013 06:22 GMT | 10:22 Local Time

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World famous Polish think tank MISO (International Institute of the Civil Society) has disseminated a report under title "Last 10 Years of Economic and Social Development Performance of Azerbaijan".

The report written by a group of experts led by MISO Director Mateusz Komorowski was posted on the website of the organization on 25 September 2013.

The report thoroughly analyzes the economic and social situation in Azerbaijan over the last ten years, and deals with the processes and their development performance in this field.

The "International Institute of the Civil Society" Foundation is a non-political and non-governmental organization engaged in promotion of the idea of civil society and development of its analytical basis.

The report says that this year Azerbaijan will mark the 22nd anniversary of its independence.

"These 22 years have been marked by both remarkable development of the country (particularly in the last 10 years) and meaningful set of serious problems underpinning economic and social achievements of this biggest state of the Caucasus."

According to MISO experts, Azerbaijan has already turned into a country conducting active policy in the international arena.

"The international situation of Azerbaijan has a significant impact on its social and economic developments. Azerbaijan is a very active state in the international arena and since the restoration of independence in 1991 it conducts a sovereign and diverse foreign policy aimed at maintaining relations with many different states and international organizations, both regional and global. Azerbaijan is a state considering the suggestions of the international community, which is evidenced in the fact that as a first country in the world, Azerbaijan is following the recommendations of 7 international financial organisations accepted to create a special fund (SOFAZ) gathering income from crude oil exploitation inter alia directed at socio-economic reforms. Furthermore, Azerbaijan is an important partner for many states and international organisations, which stimulates its socioeconomic development. For the attractiveness of Azerbaijan in the international arena different factors play a role, including the positive image of the state and its role as a foreseeable partner and a stable element in the region, its favourable geographical location, independence from Russia and richness in natural resources."

The report continues saying that a very important step towards satisfying the needs of Azerbaijani society was the creation of the ASAN Service Center in 2012, supported by the president of Azerbaijan. "This center’s main goal is to support Azerbaijani citizens in entrepreneurial activities. This initiative is innovative and could be a good practice for many other countries as it enables citizens easy access to establishing companies, strengthening professional capacities, and receiving information on social and economic support available for citizens etc.."

According to MISO experts, the Azerbaijani economy is based on natural resources, the usage and exploitation of which is one of key issues which are taken into consideration in economic development programmes in the country.

"Azerbaijan possesses extremely rich and documented sources of crude oil estimated at the level of 1,6-1,9 milliard tons, thanks to which the oil sector dominates the economy. Azerbaijan is also one of the oldest producers of oil in the world and exploitation of this resource has been 2 In the Constitution of the Republic of Azerbaijan it is stated expressis verbis that all religions are equal in Azerbaijan.5 successively rising in recent years. In 2003 crude oil exploitation amounted to 15,38 million tons, and in 2007 it rose to 42,6 million. In 2010, the figures were at around 50,8 million tons. Currently crude oil exploitation remains at a stable level of more than 40 million tons a year and amounted to 45,63 million tons in 2011 and 43,49 million tons in 2012. It is symptomatic that the amount of crude oil exploitation by the State Oil Company of the Azerbaijan Republic (SOCAR) has remained for the last ten years at a similar level; 8,92 million tons in 2003; 8,8 million tons in 2007 and 8,29 million tons in 2012. For the entire last decade the level of crude oil exploitation in Azerbaijan exceeded significantly the national demand for this resource (in 2003 the production of crude oil amounted to around 320 thousand barrels a day, while the consumption is some 120 thousand barrels)."

According to the report, there are socio-economic reform programmes financed to a large extent from revenues obtained by natural resources exploitation. "Among such programmes one should mention the 'State Programme on Social and Economic Development of the Regions of the Republic of Azerbaijan (2004-2008)' and the 'State Programme of Socio-Economic Development of the Regions of Azerbaijan (2009-2013)', which are conducted with means from crude oil production. It is also characteristic for Azerbaijan that the funds from crude oil production directed at solving problems and conducting reforms flow simultaneously from separate sources, i.e. directly from the state budget, from a special fund (SOFAZ) and from an oil enterprise (SOCAR). It is estimated that from SOFAZ, since its creation in 1999 until 1 January 2009, 7 038,8 million manats were allocated to solving various social problems and financing many infrastructural projects."

"Due to the social and economic reforms, the macroeconomic situation in Azerbaijan has been exceptionally strong since as early as 2003, the beginning of the time period covered in this report. Introduced in 1990s by the Azerbaijani government together with international financial institutions, the reforms have been gradually implemented and enacted. The basic economic macroeconomic indicators firmly demonstrate that in the last decade in Azerbaijan, a very noticeable and robust economic growth took place. One of the determinants of the growth is the gradually increasing gross domestic product. In 2003 GDP in Azerbaijan was 7,14 billion dollars, in 2005 – 12,53, in 2008 it grew to 46,25, and in 2012 GDP oscillated around 68,7 billion dollars. Moreover, since 1998, the biggest growth in GDP amongst the Commonwealth of Independent States has been observed singularly in Azerbaijan. Additionally, in consecutive future forecasts, the prognosis supports a further increasing GDP trend. According to prognoses, in 2013 the GDP Azerbaijan will reach 73,54 billion dollars4 , and in 2014 GDP is to grow by another 6,7 % in relation to the preceding year5 . The chart below illustrates GDP growth in Azerbaijan between 2003 and 2012."

The full text of the report is available in the following link:





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