The World Bank and the IMF recommend Azerbaijan

Last week the annual conference of the independent non-governmental organisation, parliamentary network of the World Bank and the International Monetary Fund (IMF), took place in Baku. This conference provided a platform on which more than 1,500 parliamentarians from 140 countries could work together to improve transparency and accountability in development processes in their countries. The organisation is aiming to boost the part played by parliamentarians and civil society. At the conference in Azerbaijan's capital members of different countries' parliaments discussed ways to sustain macro-economic stability against the backdrop of the world economic crises, ways of developing the non-oil  industries, improving living conditions and so forth. These were precisely the areas in which Azerbaijan has had a positive experience. 

A balanced approach

The conference was initiated by a non-governmental organisation, the Association of Civil Society Development of Azerbaijan. In his speech at the conference the chairman of the board [governor] of the Central Bank of Azerbaijan, Elman Rustamov, noted that a rapid changeover to a market economy, sustainable development, as well as a reduction in poverty had been achieved during the period of independence. 

"Our country has modelled a new, interesting experiment in the rational use of natural resources. In the last 10 years alone the country's economy has more than tripled, the per capita income on a par with prices has attained $10,000. Economic stability has been provided and maintained for 15 years now. A well-balanced budget, low national debt, low inflation and high volumes of currency reserves form the basis of this stability," Elman Rustamov said.

He stated that the country's foreign debt amounted to 8 per cent of its GDP [Gross Domestic Product] and that Azerbaijan's foreign currency reserves exceeded 70 per cent of its GDP. The most remarkable thing is that poverty which is still typical of many countries today, has been dealt with in just a decade and undergone an eight-fold decline to 6 per cent. Thus the level of poverty in Azerbaijan is almost four times less than the global indicator of 21 per cent.

The country has continued to develop steadily even during the crisis years thanks to the effective strategy employed to combat the economic downturn. Consequently, Azerbaijan has been able to protect its economy from the 2008-2010 financial crisis, maintaining a low level of inflation. But at the same time the economy has continued to grow by 20 per cent, Azerbaijan's top banker stated.

Oil has undoubtedly played a big part in achieving this. But it cannot be denied that at the present time Azerbaijan is one of the few countries displaying the competent distribution of oil revenues. "The State Oil Fund of Azerbaijan was set up to avoid the "Dutch disease". At the present stage the efficient management of oil revenues is going hand in hand with a considerable growth in the economy," Elman Rustamov said, laying particular emphasis on the transparency of this process. 

Multi-purpose development

Azerbaijan is exhibiting all the characteristics of stable economic growth and has great potential, according to Cyril Muller, the vice-president for external affairs at the World Bank. He said that he had been familiar with Baku for many years now. He had been one of the first representatives of the World Bank to arrive in the country after the collapse of the USSR. Azerbaijan had achieved incredible progress since it became independent, he noted.

In the IMF statement on the annual review of Azerbaijan's economy, in line with Article IV, it notes that the IMF's director welcomes the efforts of the country's government to maintain stability in the financial sector, including the recapitalisation of the banks and the taking of prudent measures to restrain the growth of consumer credit. He went on to say that Azerbaijan's economic prospects for the very near future were looking optimistic; in 2013 the growth in GDP is expected to be 4.1 per cent and similar figures are forecast for the less immediate future. 

Azerbaijan's government is setting great store by Cupertino with international financial organisations, in particular with the IMF and the World Bank. "These institutions have always rendered Azerbaijan financial support and proposed new ideas and projects in going over to a market economy, stabilising the economy and ensuring sustainable development. It may confidently be said that considerable results have been achieved in this sphere," Elman Rustamov said. He added that during the time it had been working together with the IMF and the World Bank, Azerbaijan had received a total of $3.6bn in loans to finance various reform programmes and various projects in the republic. He said that Azerbaijan was intent on further co-operating with the IMF and the World Bank on achieving goals within the framework of the republic's development strategy up till 2020. "This strategy envisages doubling Azerbai-jan's GDP and Azerbaijan becoming one of the countries boasting high income rate," he noted.

To put it in a nutshell, as mentioned above, Azerbaijan's experience in maintaining economic stability may be helpful to countries where there is a risk of developing the "Dutch disease". Moreover, enterprises like the parliamentary network of the World Bank and the IMF are definitely aimed at an exchange of opinions resulting in the best solutions being found. The ultimate goal of all the governments' efforts has to be improving the population's social and domestic conditions, boosting the overall level of prosperity and resolving global tasks so that countries can work together.