[Nagorno Karabakh] [Role of Islam] [Corruption] [Oil Revenues] [Civil Liberties] [Relations with the West] [Social Welfare] [Government Transparency]
 Policy Guide Print this page
Oil Revenues

How to manage the distribution of oil revenues has been one of the key political debates in Azerbaijan during recent years. Roughly $1 billion exists in the country’s oil fund, but some observers expect total state oil revenues to be double that for 2005 alone. With an economy largely driven by hydrocarbons, the country’s future prosperity could well depend on how the government chooses to make use of this wealth.

Pro-Government: Yeni Azerbaijan Party (YAP):

The ruling party argues that Azerbaijan’s constitution does not provide for parliamentary control of the State Oil Fund, and credits “the correct policy” of President Ilham Aliyev for keeping oil revenues in the Fund “for the benefit of future generations.” The Oil Fund’s current balance of $1.2 billion “can be compared with the state budgets of some countries,” says Deputy Executive Secretary Mubariz Gurbanly. «Some people think that we should spend this money now. But YAP thinks about the future. In 40-50 years, Azerbaijan will have no oil and we should invest this money in the creation of economic zones [in the economy’s non-oil sector].” While supporting transparency in the management of Azerbaijan’s oil revenues, Gurbanly argues that management decisions should be the domain of only a few government and Oil Fund officials, plus the president. Says Gurbanly: “If we will arrange a public discussion on how to use the oil money, we will receive 3 million ideas. The president has been given responsibility to make decisions on this issue and we are satisfied with the results.”

Opposition: Azadlig (Freedom) Bloc:

The bloc favors parliamentary control of the distribution of oil revenues and states that it is ready to cooperate with international financial institutions and organizations to establish such control. “In no case should oil be used for political bargaining,” Fakhmin Hajiyev, deputy head of Azadlig’s campaign argues. “Oil revenues should be spent not only on social needs, but also on development of the non-oil sector and liberal economic reforms which need financial support.”

Opposition: Yeni Siyasat (YeS – New Policy) Bloc:

The bloc argues that greater transparency is needed in the distribution of oil revenues from the State Oil Fund and in the Fund’s activities. “Parliament should exercise greater control over that,” says campaign manager Rashid Hajili. “Parliament alone should approve all spending of money from the Oil Fund.”

Opposition: Liberal Party of Azerbaijan (LPA):

The party supports placing the State Oil Fund and the distribution of oil revenues under parliament’s full control. “One-third of the oil revenues should go directly to the bank account of every single Azerbaijani citizen,” says Deputy Chairman Avaz Temirkhan. « And a significant part of the oil revenues should go to investments in the non-oil sector of the economy.”

Candidate: Rustam Aliyev, New Parliament – New Names Bloc, Owner of FM radio station
Constituency: #55, Khachmaz
Location: Khachmaz region, North Azerbaijan, along border with Russia

Aliyev advocates greater transparency in the distribution of oil revenues and calls for money from the State Oil Fund to be spent in part on educational reform, as well as the development of the economy’s non-oil sector. “It is of the utmost importance that oil revenues have an impact on the human capital of Azerbaijan.”

Candidate: Ilgar Mammadov, Independent
Constituency: # 8 Binagadi 1st
Location: Baku suburb

The State Oil Fund should be used to establish a program for sending young Azerbaijanis to universities in the US and Europe and to provide for them to receive job training overseas, on condition of their eventual return to Azerbaijan. It should also focus on providing for the needs of indigent regions of Georgia with heavy concentrations of ethnic Azerbaijanis, and, later, expand this economic development assistance throughout the South Caucasus. The government should also concentrate on infrastructure development within Azerbaijan, Mammadov says, but keep close watch on the expenditure of related funds.

AZERBAIJAN: ELECTIONS 2005 is a production of EurasiaNet.org with funding provided by the Open Society Institute.
Copyright © 2005 EurasiaNet.org.