"RAREST EXAMPLE IN HUMANKIND'S HISTORY"

Despite the recent lack of "monetary interest" in Azerbaijan's relations with the international financial institutions, cooperation with them is still held at the high level. Because in essence all of them are not only creditors and "last minute" lenders, they also form some regional policies of financial and economic development and become an image catalyst for member countries.

Azerbaijan has cooperated with IFIs from practically the moment it gained independence and has recommended itself as a reliable and responsible partner, who still has his opinion on domestic policies that differs from the views of international experts. The correct decision-making only further increased the respect to Azerbaijan by the same IFIs. This could be clearly seen during the two-day visit to Azerbaijan of Suma Chakrabarti, president of the European Bank for Reconstruction and Development (EBRD).

Visible progress

As it turned out during the press conference held by Chakrabarti in Baku, like many other international organizations the EBRD is impressed by the rate of development of the Azerbaijani economy in recent years. "Azerbaijan's economy went through a serious transition period, and as a result poverty levels within the country dropped - from 50% in 2001 to 6% today. Such an impressive rate of poverty reduction is one of the rarest examples in the humankind's history. I congratulate the people and leadership of Azerbaijan with this success," Chakrabarti said.

He especially emphasized the economic achievements Azerbaijan secured in the past 10 years. "The EBRD, one of the largest investors in Azerbaijan's non-oil sector of the economy is proud that it played a certain role in the processes of poverty reduction in this country," Chakrabarti said.

Over 20 years the EBRD extended to Azerbaijan 6.7bn euros. In 2012 the private sector alone received 90m euros in loans for 16 projects. "In the current year we also target positive results and seek to support Azerbaijan on the matter of diversifying the economy. According to the 2012 indicators, we already can see progress on this front. When it comes to diversification of the economy the small- and medium-sized businesses have a special significance. We also intend to pay attention to such spheres of the economy that remain outside attention, such as the agro-industrial complex, support for female entrepreneurs and so on. In addition, we will pay special attention to developing the capital markets," Chakrabarti said..

The EBRD president himself confirmed that assistance to Azerbaijan in the diversification of its economy is already yielding results - in 2012 the growth rate of the non-oil sector was around 10%.

Yet, extra stimulating measures are necessary and the most important of this is work in the area of transparency. "I met members of civil society and they also noted the Azerbaijani government's achievements in fighting corruption. Nevertheless, more effort must be made to fight corruption," Chakrabarti said. Naturally, the leading European IFI is ready to lend its support on this front as well to our government that undertook serious commitments to address this issue in order to improve its ranking in the corruption fighting index as this will directly encourage improvements in the business and investment climate.

Define priorities

The government is not about to turn down such support. Azerbaijani Economic Development Minister Sahin Mustafayev said that the goal of Azerbaijan's cooperation with the international financial institutions is not only to receive loans, but also to attract to the country international expertise. "If we only worked on attracting credit resources, then Azerbaijan's foreign debt to GDP ratio would not be so lot - around 7-8%. For comparison, in some European countries, especially after several years of crisis, this indicator stands at 80, and in some countries at 100% and higher," Mustafayev said. He said that the Azerbaijani government is interested in the international expertise in various spheres. "This includes ensuring transparency and attracting modern technologies to Azerbaijan, and of course the expertise of supporting entrepreneurs, especially female entrepreneurs. Furthermore, we are also interested in the international expertise in the area of corporate management," the minister said. He added that cooperation with international organizations encompasses a lot of tools and already yields results.

According to the EBRD president, the bank continues to regard Azerbaijan as a priority country for developing the capital markets and views as an important objective the issue of securities in the national currency to ensure access for the local small- and medium-sized businesses to principally important funding without foreign exchange risks. "The European bank already has the experience of issuing bonds in national currency in Russia, Ukraine and Poland. We have a limited experience of issuing unsecured notes in Azerbaijan, but we are interested in further development of the local capital market. In this connection an EBRD mission will come to Baku in  September-October to discuss the prospects and directions for cooperation to develop the capital market. We are ready to use other instruments in addition to issuing bonds, including various swaps," Chakrabarti said.

It turned out that the government has already agreed with the bank's president a host of issues on future priorities of cooperation with the EBRD. More specifically, they considered the main tasks of the "Azerbaijan 2020: view into the future" concept of development.

The EBRD has always readily took part in regional projects that were initiated or involved Azerbaijan, especially if their commercial success was obvious. In the continuation of this series, the EBRD expressed its readiness to take part in financing the Trans-Adriatic (ТАР) and Trans-Anatolian gas pipelines (TANAP). "These are very important projects for both Azerbaijan and the region. Through these projects Azerbaijan can play an important role in ensuring Europe's energy security. Prior to making the decision a large range of issues must be discussed and a large volume of work must be completed," the EBRD president said.

In a nutshell, the EBRD has long-term plans for Azerbaijan and, most importantly, the dialogue with the bank has been established on the level of partnership, which satisfied both sides. Another indicator that the country's achievements are recognized is that Chakrabarti suggested holding in the head office of the bank in London Days of Azerbaijan, while Mustafayev, in turn, suggested holding one of the annual assemblies of the EBRD in Azerbaijan.