After the dissolution of the USSR, all the former Soviet republics found themselves in a situation of economic and social shock. Some managed to avoid such massive stress following the collapse of the superpower, but the majority failed to do so. Azerbaijan was among the majority. Clashes in Karabakh led to war by the early 1990s, with thousands victims and millions of refugees. In those days few people believed that Azerbaijan would overcome the situation: its army left Karabakh, Armenia occupied seven Azerbaijani regions. The result was human losses, devastated towns, chaos… In such a situation Heydar Aliyev became head of the country.
It is difficult to believe in it today. Azerbaijan begins with a modern airport, where airplanes fly hourly to all points of the world. Roads are modern and illuminated. When you arrive in Baku, you wonder whether it is East or West. On the one hand, the ancient city has narrow streets, ancient buildings, houses, mosques and caravansari unchanged from the times of the Silk Road. But if one goes to the embankment in the city center, one sees modern buildings similar to those in Singapore and the Emirates, houses like in Paris, illumination, fountains, exotic plants, Russian speech and incredible service. The state is absolutely secular.
It is thought that this beauty was created only as a result of Baku's oil. If a country has rich natural resources, no efforts to develop the economy need to be made. Azerbaijanis have another view. They think that the high economic indices were achieved due to effective state policy in the sphere of financing and distribution of income from oil and gas production. President Heydar Aliyev played the key role in this process. He established the state oil fund. To learn more about the Oil Fund, Moskovskij Komsomolets met its executive director, Shakhmar Movsumov.
- The Oil Fund proved its effectiveness in the sphere of asset management during the world crisis. In this difficult time the Oil Fund managed not only to preserve, but also to increase its assets. Azerbaijan maintains its tempo of economic growth and remains among the top countries according to pace of economic growth. At the period of establishment of the Oil Fund its assets accounted for up to $271 million. In 2008 this sum surpassed $10 billion, and in 2010 - $20 billion. Over the last three years the assets of the Oil Fund have grown 10 times larger. We forecast that in the next five years the assets will grow to $50 billion.
- What are revenues from the oil industry and valuable shares being spent on?
- According to the charter of the Oil Fund, one of main aims of the fund is financing of strategy infrastructure and social projects in Azerbaijan. During ten years 2.8 billion mantas were spent on these projects. At the same time, the state budget received 20 billion mantas, which are spent on state investment programs. As you know, after the Armenian-Azerbaijani conflict 20% of Azerbaijani territory is occupied. More than a million people became refugees. The first spending of the Fund was on arrangements for improving the social and housing environment of refugees. New villages with all necessary communal facilities have been built. Among other infrastructure projects financed by the Oil Fund is construction of the Baku-Tbilisi-Kars railroad, which may be called the Silk Railroad.
- Does the education program for Azerbaijani students abroad continue?
- Yes, the Fund is financing talented young people who have managed to enter foreign universities, including Russian ones. The only condition is that these students should return and work in Azerbaijan for at least five years. The idea of President Ilham Aliyev – turning the black gold into human capital – is being successfully implemented. This year the number of students will reach 1100.
- Aren’t you afraid that the students won’t return to Azerbaijan?
- We haven’t had such precedents yet. However, the authorities of the country don’t foresee great harm for the state in this situation. Compatriots with a brilliant education who achieve success abroad will help to form a positive image of their country.
- What is the difference between the Oil Fund of Azerbaijan and the Stabilized Fund of Russia?
- In Russia it is a bank account, in Azerbaijan it is an institute of high status. The head of the Fund is appointed on the direct order of the President, and the Fund itself is not within the jurisdiction of any structure, which makes it transparent. Spending is provided only within the framework of the annual budget of the Fund, which is adopted by the parliament. Each citizen participates in the development of the Fund’s budget through a deputy, who they elect.
- Yes, your organization took first place in the international ranking of transparency provision…
- It is so. Every three months the Oil Fund holds press conferences, where information on revenues and spending is presented. We publish it on our official web-site. Anyone can access the data.
- As for the Karabakh problem, doesn’t it threaten investors?
- The occupied territories of Azerbaijan are a big problem. The whole world sees our civilized approach. We hope that common sense will prevail and the problem will be settled through negotiations…
Baku-Moscow. MK
