HELPING OTHERS

In November, Azerbaijan signed an agreement with the European Bank for Reconstruction and Development (EBRD) to become a full and active member of the donor community. Thus, the country confirmed its intention to continue the policy of transformation from a recipient state into a donor one.

This shows the sustainability of Azerbaijan's economic development. After all, a state becomes a donor only if its economy is strong enough to provide systematic support to other developing states, and it has a vision and priority directions for providing such a regular assistance.

Directions of assistance

President Ilham Aliyev officially announced that Azerbaijan became a donor state at the World Economic Forum in Davos in 2015 during his speech at the session Transformation of Eurasian Regions. Azerbaijan has since been actively working in two main areas: providing humanitarian and technical assistance to developing countries. Humanitarian assistance includes the provision of emergency assistance to states affected by disasters, including natural ones, as well as to developing countries to overcome the consequences of humanitarian crises.

Azerbaijan provided emergency assistance in 2015 to the victims of the earthquake in Nepal. Even before that, as part of cooperation with the UN Middle East Agency to help Palestine refugees and organise their work in the region, Azerbaijan provided $633,000 to restore the Gaza Strip. This was followed by humanitarian aid to the victims of the earthquake in Afghanistan, aftermath of the floods in Serbia, Bosnia and Herzegovina, and Pakistan. Finally, Azerbaijan provided food assistance in 10 cities helping more than 25 thousand people. Azerbaijan also helped the victims of the Haian hurricane in the Philippines and took part in the elimination of the consequences of severe floods in St. Vincent and the Grenadines.

This is only a small portion of works to support other states. Similar programs are ongoing.

In 2019, on behalf of the President of Azerbaijan, Azerbaijan provided $30,000 humanitarian assistance to refugees from Burundi. This money will be used to urgently meet the needs of Burundian refugees living in Tanzania, Congo, Rwanda and Uganda, encourage their return to their homeland and support their reintegration into society.

₼950,000 of humanitarian aid was sent to Iran affected by floods caused by prolonged heavy rains, which claimed the lives of at least 70 people among more than 400 thousand affected people.

This year Azerbaijan also sent humanitarian aid to those in need in Yemen.

According to UN estimates, 24 million people (80% of the population) in Yemen need humanitarian assistance, while 250 thousand suffer from acute malnutrition. The country has 3.3 million internally displaced people; various types of dangerous diseases have spread among the population.

Azerbaijan also takes part in technical support programs or financial assistance. One of such initiatives was the launch of a water supply system named after the national leader of Azerbaijan, Heydar Aliyev, in the Tank region of Pakistan. As a result, over 40 thousand people, who had traditionally suffered from the lack of water and used rainwater for domestic purposes, received constant access to drinking water.

A number of post-conflict countries require specific types of assistance such as cleaning mined areas and ensuring the safety of the population.

One of the successful projects was the creation of a special classroom equipped with modern equipment for students with physical disabilities at the Jordan University of Amman. Azerbaijan, together with UNDP, has also completed a project to create e-government in Afghanistan. As part of strategic partnership with the Islamic Development Bank, Azerbaijan was actively involved in conducting operations to restore vision of patients suffering from cataract in African countries. Thanks to this help, in less than two years, approximately 10 thousand people regained their vision.

Assistance to African states is a priority for Azerbaijan. The government of Azerbaijan once provided $1 million to fight the Ebola epidemic.

Azerbaijan continues to receive an increasing number of requests for assistance from developing countries and international organizations thanks to Azerbaijan's increasing authority. As the republic becomes a more influential player in the international economic arena, relations with these countries and organisation enter a new stage of development.

Donor of international financial institutions

Recently, during the first Eastern Partnership summit in London, President of EBRD, Suma Chakrabarti, appreciated the measures taken by Azerbaijan to diversify the economy and reduce dependence on the oil sector.

At the summit, Azerbaijan signed an agreement on accession to the EBRD donor community. According to the document, the Ministry of Economy of Azerbaijan will provide a grant of $2 million for the projects of EBRD to support small and medium-sized enterprises (SMEs), especially in the agriculture and women-run enterprises. Azerbaijan also expressed support for projects to promote innovation and new technologies, the development of rural areas and regions, as well as sustainable and renewable energy sources, initiatives designed to improve energy efficiency.

Grants will be used to support advisory projects and investments in transport and municipal infrastructure. The funds can be used in the form of investment grants, incentive payments and risk sharing mechanisms.

EBRD President Suma Chakrabarti urged foreign investors to invest in the Eastern Partnership countries in Eastern Europe and the Caucasus, given their increased attractiveness. After signing the agreement, Azerbaijan became the first country to contribute to the donor fund of the bank. But Azerbaijan is not going to limit its activities as a donor.

The government has already announced plans to join in 2020 the list of donor states of the Asian Development Fund. The fund is owned by the Asian Development Bank to finance various projects in member states. The size of Azerbaijan's contribution to the fund has not yet been announced, but it is known that these funds will be included in the state budget for 2020.

Azerbaijan also takes part as a donor country in another international organisation, World Bank (WB), and more specifically, in the International Development Association (IDA), which is part of the WB Group. IDA is known to be one of the largest sources of financial assistance for the 75 poorest countries in the world, 39 of which are in Africa, and the largest source of donor funds for basic social services in these countries.

When Azerbaijan joined the World Bank Group in 1992, it was also poor and received concessional loans through IDA. But just in a few years, Azerbaijan's economic development, including per capita income, which is one of the main indicators for issuing soft loans, has gone beyond the criteria for IDA member states. Given that the countries with per capita GDP of no more than $1,165 (threshold in 2018) have the right to receive IDA loans, the indicator in Azerbaijan exceeded the threshold limit by more than 4 times reaching $4,780.

Azerbaijan continues to receive loans from the WB, but in accordance with the conditions of IBRD (also part of the WB Group), which lends to countries with an average level of development.

It is important that having achieved significant success in economic development, Azerbaijan offered its assistance to poor states through donations to IDA. In early December, the amount of Azerbaijan's contribution to this organisation will be announced at a donor conference to be held in Stockholm.

Usually, it isn't encouraged to report about the provided assistance… But in state relations and politics, on the contrary, all of the above facts should undoubtedly become open to public. After all, this information is very indicative because Azerbaijan had received loans from all these international organisations for reforms and projects in various fields during the development of its own economy. Today Azerbaijan continues to receive loans from international financial institutions, but these amounts are insignificant and are mainly used for large infrastructure projects. In accordance with the new strategy for managing external debt, loans can be attracted in special cases, since Azerbaijan's financial potential allow it to implement projects at the expense of internal funds.

As President Ilham Aliyev noted on this occasion, "today Azerbaijan has also become a donor state of international financial institutions. Our stable financial position allows us to place our financial resources outside the country too, making it possible to grow our potential for influence."

Indeed, through the provision of humanitarian and other assistance, Azerbaijan is also affirming itself as a state with a positive international image, demonstrating the possibilities of strong and sustainable economic development. Indirectly, this undoubtedly affects the investment attractiveness of the country, and on the other hand, creates additional opportunities for Azerbaijani structures and private companies to enter new world markets.

But the main thing, of course, is a positive message, friendliness and a desire to help those in need. Good deeds are never lost...