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Azerbaijan Did Not Escape Dutch Syndrome - Sabit Baghirov

Azerbaijan Did Not Escape Dutch Syndrome - Sabit Baghirov

2017 July 04 ( Tuesday )  18:20:17
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Русский Azərbaycan

Baku / 04.07.17 / Turan: Problems for the state budget of Azerbaijan can begin if the price of oil falls, below $ 40 per barrel. This was stated in an interview with Sabit Baghirov, President of the Foundation for the Promotion of Entrepreneurship and Market Economy, former President of SOCAR.

According to him, the critical price for the state budget of Azerbaijan is 40 dollars. Budget indicators of 2017 are determined based on this price.

He commented on the opinion that Azerbaijan incorrectly disposed of oil revenues and did not escape the Dutch Syndrome. "But for the sake of justice, it should be noted that all resource countries face similar problems," Baghirov said, referring to the experience of Russia, Kazakhstan, Nigeria, the Persian Gulf countries, Saudi Arabia, etc. The Strategic Roadmap for Azerbaijan's Economic Development sufficiently means prevention of the Dutch Syndrome. However, Azerbaijan is far from the positive experience of such an oil producing country as Norway, he noted.

The Norwegian Oil Resources Fund was established in 1990. In the second half of the 2000s, it turned into a Pension Fund, which is managed by the Central Bank. There are certain limits to which transfers from the Pension Fund are not allowed. In particular, Norway is trying to ensure that the amount of transfers does not exceed 4% of the profitability of the assets of the Pension Fund.

In Azerbaijan over the last 6-7 years, large amounts of money were transferred from the Oil Fund to the state budget, which was connected with infrastructure and social projects.

In total for the years of independence, Azerbaijan"s oil revenue has totaled 135-140 billion dollars. These funds allowed Azerbaijan to solve budget problems and implement large economic projects. "Most of these funds have already been spent," Baghirov said.

By the beginning of 2017, the Oil Fund is accumulated about 33 billion dollars. However, the country's reserves are not limited to this. There are reserves of the Central Bank, and they are close to 4.8 billion dollars.

The expert pointed out that along with the conclusion of new agreements on the development of oil and gas fields until 2050, the government takes steps to develop the non-oil sector and implements strategic roadmaps for the economy in 12 directions.

Among the forthcoming important tasks Baghirov also called judicial reform, optimization of the structure of state administration, etc. -06 / 16--