BREATHING NEW LIFE INTO OLD PROJECTS

For 20 years the World Bank has been one of Azerbaijan's economic partners, and to be fair it should be noted that unlike certain other international financial institutions the country's economic relations with the WB have been virtually smooth and true relations of partnership. Having signed credit agreements with the Azerbaijani government at the beginning of 2012 to the overall sum of $3,054,900,000, the bank without any pressure was helping the country to carry through its reforms. By focusing attention on the weak links in Azerbaijan's socio-economic structure, the WB tried to help solve them within the framework of 21 projects that comprise the bank's current portfolio on the republic.

The aim of the AIC is exports

1 July will herald a new stage in mutual relations between the WB and Azerbaijan. In the first place, the World Bank's regional director for South Caucasus is being changed (Henry Kerali replaces Asad Alam) and a new financial year (2013) approaches, in the course of which the bank plans to endorse the funding of three projects in Azerbaijan. Incidentally, it is quite possible that credit for the first of these - "Azerbaijani Rural Investments" - to the sum of $30m will be endorsed by the board of directors in July.

Here it should be pointed out that from the very outset agriculture has been a priority of the WB in Azerbaijan and more than one project has already been implemented in this direction. It is significant that the second project, too, which is planned for the 2013 financial year, also covers this sphere, and that is the development of the agro-industrial complex (AIC) sector and providing finances for agricultural producers.

Moreover, as Asad Alam, the outgoing regional director for the South Caucasus, told journalists in Baku, the World Bank is preparing to continue the Azerbaijani Agricultural Development and Credit Project (ADCP) with new objectives. He said that raising agricultural productivity was a vital question for Azerbaijan today. And one of the reasons for the current situation is the fragmentation of land, as well as the quality of seeds, the level of technical equipment and tools and complexities in the storage and processing of agricultural produce. Completely new inter-relations between manufacturers of AIC produce and the sales market also need to be created. "Properly integrated work in all these areas is required to make full use of the potential of the agrarian sector," Alam noted. And, he said, WB representatives have already had consultations with the Azerbaijani government and defined the components which will be part of the new project.

"Proposals have been formulated that are aimed at raising productivity and efficiency, filling the gaps in regulation and financing and the future commercialization of Azerbaijan's agriculture. Measures have also been defined to improve the sector's foreign competitiveness not only in primary industry but also processing commodities," Alam said.

The future of the agrarian sector in Azerbaijan, he says, lies in the shaping of an export-oriented agriculture, thanks to which the social situation of the rural population may be considerably improved.

Plan for the near future

Going back to the projects that are to be endorsed in the near future, we should note that they also include a section on additional funding for a project in the health sphere. In this case I am talking about improving the qualification of medical workers and the general level of services offered at medical institutions, which are so vital for Azerbaijan today.

"I can say that additional credit funds in the health sphere are also planned to be assigned to carry out training for medical workers. Furthermore, a transparent system for the certification of medical workers is due to be introduced which will help raise the quality of services in this sphere," Alam noted.

The first results of the implementation of the "National water supply and sewage disposal" programme in Azerbaijan for which the WB has issued two credits will become clear in September-October. "A number of facilities that have been built as part of the programme are to be commissioned in this time, all the funds have been distributed and the necessary contracts have been signed," Alam said.

For his part, Kerali noted that apart from this the WB plans to continue to cooperate with the Azerbaijani government in the 2013 financial year on current projects in the sphere of improving trunk roads, developing railways and improving the infrastructure. 

He added that as part of his visit to Baku he had had meetings with Azerbaijani President Ilham Aliyev, the prime minister and ministers. "We intend to deepen our cooperation with the Azerbaijani government in various sectors of the economy," Kerali stressed.

According to the regional director, his tasks will be to help to achieve the objectives set out in the projects and to strengthen efficiency in the use of credit funds. "One of our most important tasks is to ensure that the funds allocated by the WB are used for their proper purpose and produce the desired effect. We shall turn our efforts towards those spheres where we have successful experience," Kerali summed up. In any event, the WB's work in Azerbaijan goes on…"