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AZERI PAPER SAYS AUTHORITIES SIMULATE TRANSPARENCY
IN OIL INDUSTRY
Excerpt from report by the Information and Resource Centre
of Azerbaijan's Oil Industry published in Azerbaijani newspaper
Azadliq on 28 August and headlined "Oil Fund and Oil
Company: Transparency Unavoidable"
An International Monetary Fund [IMF] mission is scheduled
to pay an official visit to Baku on 1 September. Since the
deputy director of the IMF department for the Middle East
and Central Asia, John Wakeman-Linn, has failed to file the
fourth report on Azerbaijan because negotiations with the
government have not been completed, more serious discussions
are expected to be held this time.
To recap, three of the issues that the sides have so far
failed to agree on are linked to the oil sector. A long-term
strategy on management of oil revenue has not been endorsed,
a mechanism for regulating oil prices has not been introduced,
and the revenue and expenditure budgets of state-owned enterprises
for 2004 have not been approved.
The government is making stir in the run-up to the mission's
visit. According to available information, Prime Minister
Artur Rasizada has already endorsed a long-term strategy on
management of oil revenue and submitted it to the presidential
administration. In accordance with the strategy, oil revenue
will be mainly spent on social needs and infrastructure. This
document was expected to have been adopted earlier this year.
Although there is no progress in this field, the government
intends to demonstrate to the IMF the work it has done in
the field of oil revenue transparency.
[Passage omitted: Minor details]
The Azerbaijani government, which is trying to demonstrate
transparency of the State Oil Fund, does not want to apply
this to state enterprises. One of the major issues that could
provoke disagreement in discussions with the IMF will be the
fact that the revenue and expenditure budgets of state-owned
enterprises for 2004 have not been approved. Despite direct
instructions given in a decree signed by the president last
January, the budget of SOCAR [State Oil Company of the Azerbaijan]
and a number of other major tax-payers has not yet been endorsed.
[Passage omitted]
Thus, the government has not yet established how much the
companies will earn and spend.
In fact, the issue is crystal clear. The government is trying
to create an impression of transparency. However, if society,
NGOs and the media unite their efforts, it will not succeed.
Source: Azadliq, Baku in Azeri 28 Aug 04 p 10
BBC Mon TCU 290804 sa
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