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This policy paper is an assessment of the current situation in management of oil revenues in Azerbaijan in order to find solutions for improving it. This policy paper is the result of research conducted by the research team of Economic... more

This policy paper is an assessment of the current situation in management of oil revenues in Azerbaijan in order to find solutions for improving it. This policy paper is the result of research conducted by the research team of Economic Research Center with the financial support of Revenue Watch Institute in 2013. In the paper, analysis was carried out on the macroeconomic environment, fiscal rules and legal bases for the management of oil revenues in Azerbaijan, policy of the management of oil revenues was evaluated, assessment was done on participation of policy makers, especially national oil fund, in the decision making process on the management of oil revenues, and their influences. In some instances the comparative analysis of superior and inferior features of oil revenues management was done taking Kazakhstan and Norway as the reference countries. The main aim of this policy paper is to assess the current situation of management of oil revenues in Azerbaijan, unfold its weaknesses and strengths, identify key problems and prepare alternative policies for solution of these issues.
The first part gives the general assessment by describing Azerbaijan‟s revenue management system; the second part diagnoses the problems; the third part analyzes the problems created by the inefficiencies in the legislative system; and the fourth part describes four possible futures depending on the choices taken today. This paper does not just diagnose the problem; it also offers solutions. It suggests specific fiscal rules that could be adopted by the Government of Azerbaijan to reduce volatility and improve the quality of public spending. It provides options for enforcing these fiscal rules. And it makes recommendations on improving the credibility of fiscal policy through enhanced transparency and accountability.
The readers of this policy paper will be informed about the outcomes of retrospective analysis of oil revenues in Azerbaijan as well as various options in management of oil revenues within the scope of current and perspective opportunities.

Azerbaijan has enjoyed a rapid run-up in government revenues from oil and natural-gas production in the period since 2005. Theory predicts that this run-up will trigger the Dutch Disease among Azerbaijani producers. In this paper, we... more

This research was conducted by the experts of Economic Research Centre with the financial support from Open Society Institute-Assistance Foundation within the framework of competition titled “Assistance to analytical centres ”. The study... more

This research was conducted by the experts of Economic Research Centre with the financial support from Open Society Institute-Assistance Foundation within the framework of competition titled “Assistance to analytical centres ”. The study report prepared by ERC experts aims at improving the accuracy of the existing statistics by revealing problems with foreign trade statistics in Azerbaijan. With this purpose, the information describing the foreign trade turnover of 16 countries – Azerbaijan’s main foreign trade partners - was included in this research. Thus, the database for this research consists of customs statistics of the Republic of Azerbaijan, statistics of State Statistical Committee on the foreign trade, payment balance of Central Bank and official statistics of foreign countries on export-import operations with Azerbaijan. Using the “mirror statistics” methodlogy, the State Statisical Commitee data was compared with the sameperiod information on trade with Azerbaijan received from partner countries.. The calculation model based on this methodology allowed to define the amount of unregistered products imported and exported within a certain period. Trend analysis was conducted by using different comparison methodologies during the research. The research findings indicate the difference in import operations between Azerbaijan and its 16 major trade partner countries in the amount of ELOOLRQPLOOLRQWKRXVDQG$ of 2003-2009. According to the “mirror statistics” methodoloy, difference in the same-period statistical information between countries does not cause any debates when it is below 10 percent. Thus, according to international methodology1, import exceeding export by 10% is deemed as normal. However, when import exceeds export by more than 10%, assumptions about other trade barriers and corruption are stipulated. Recommendations are prepared on the basis of these findings, to be further submitted to relevant state agencies. This study can be used by the employees of state agencies, representatives of local and international NGOs, representatives of the diplomatic corps in Azerbaijan, researchers, students and journalists.

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- by Gubad Ibadoghlu and +1
  Galib Bayramov
- •
- Mirror Statistics, Foreign trade

Since the collapse of the Soviet Union, the transition economies of the Commonwealth of Independent States (CIS) have kept one of the negative features of the Soviet economy – the informal sector. Despite the shift from command to market... more

This paper discusses the status of financial inclusion, education, and literacy in Azerbaijan as well as measures to foster the development of SMEs, which currently have inadequate access to financial resources. The primary policy... more

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