Giving Citizens a Stake in Azerbaijan’s Oil Prosperity
Several former Soviet countries have seen their economies boom from increased oil exports. While Baku has been a center for oil production for the past century, only now is Azerbaijan in a position to reap the rewards of this resource. Experts estimate the country will receive more than $200 billion in oil revenues by 2024. With a current annual budget of only $6 billion, these revenues will have a tremendous impact on society and the national economy.
Newly built oil platforms in the Caspian Sea, Credit: Caspian Business News
Anticipating rapid growth in Azerbaijan’s annual budget, EF, with support from USAID, awarded a grant to the Entrepreneurship Development Fund (EDF) to initiate dialog about, and ultimately strengthen the public’s control over, how these funds should be spent.
Over the past year, EDF has held seven roundtable discussions, convening representatives from the government, business and non-profit communities to explore methods for the effective management of oil revenues.
The final roundtable, held in July, gathered 50 representatives from the National Parliament, the State Oil Fund, the World Bank and international and local non-governmental organizations, as well as several noted economists. The presence of international economic experts helped garner the attention of the national media and raise the profile of these events.
In addition, EDF surveyed nearly 1000 citizens to identify key concerns surrounding oil revenue spending. Respondents want a more transparent decision-making process as these funds begin to flow into Azerbaijan. The majority of respondents believe the government’s highest priority should be expanding its armed forces, followed by creating new jobs and raising pensions.
At the program’s conclusion, EDF presented its recommendations for the most effective approach to managing Azerbaijan’s oil revenues—including the results of the citizens’ survey—to Parliament and other government bodies.
EDF’s program creates a mechanism for the public, government and international community to voice concerns about the allocation of oil revenues. Azerbaijan can learn valuable lessons from other oil rich nations—including that the most successful ones offer transparency and support an informed and vocal citizenry.
