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Economic Opportunities Bulletin
J uly 2 0 0 2
GOVERNMENT NEWS
United States of America Will Provide
$54,9 Million Assistance to Azerbaijan
United States of America will continue
assisting Azerbaijan in the sphere of
democracy and governance, economic
reforms, security and humanitarian
assistance in 2002. The US budget for the
2002 fiscal year has allocated $54,9 million
for these purposes.
$15.9 million of this sum will be channelled to democracy and
governance programs, $10.2 million for economic development projects‚
$13.6 million for security strengthening programs‚ $12.7 million for
humanitarian assistance and $2.5 million for cross-sectoral activities. The
assistance for economic development mainly targets accelerated growth
of small and medium businesses. The US humanitarian assistance for
Azerbaijan aims to increase community development efforts to integrate,
resettle, provide credit and business development services, and health
care to IDPs and the conflict affected population within Azerbaijan. The
US Department of State will provide Azerbaijan with additional
humanitarian aid worth over $ 20 million.
IDA Credits State Investment, Poverty Reduction
and Social Support Programs in Azerbaijan
The World Bank has ratified the $ 9.450 million second phase of the
Institutional Building and Technical Assistance (IBTA) program. The
credit line for the second phase of the program has been opened through
the International Development Association (IDA) for a 35-year term with
the grace period of 10 years at an annual rate of 0.75 per cent.
The second phase of IBTA is designed to support development of state
investment‚ poverty reduction‚ social support programs of the
government and privatisation of gas & water supply systems in
Azerbaijan. To achieve its goals the IBTA program will closely work
with the Ministry of Economic Development, Ministry of Education,
Ministry of Health, Ministry of Labour and other government bodies.
Websites
- www.microcreditsummit.org
This is the web site of the Micro Credit Summit, which is to take place
on 10th-14th November 2002 in New York. The summit is expected to
bring together more than 3,000 delegates from 140 nations to discuss
best practices and lessons learned in the micro finance area. According
to the web site, micro credit institutions reached 30.7 million clients, by
the end of 2000, 19.3 million of whom were among the very poor when
they took their first loans.
Vo lume I
No . 2 7
Economy in January-May 2002
During January-May 2002, Azerbaijan’s GDP made up $2,04
billion, up 8.35% from the 2001 period. Services, oil, and
industry sectors were major contributors to the GDP growth. The
share of the services sector in GDP stood at 42,1%, while the oil
sector’s percentage in the GDP structure was at 22.3%.
In January-May 2002, the gross industrial output rose by 1%
against the respective period of 2001. While food, mining, and
oil industries grew, processing and oil refining sectors have seen
sharp declines.
This year is unfavorable for plant growing. Cool April and
pelting rains in May severely damaged crops. Areas with winter
crops were partially lost. In this connection, the harvest of
cereals may be lower this year. The Ministry of Agriculture’s
statistics show that the overall area under crops was lower by 4%
than that a year ago. As to separate agriculture plants, the areas
were lessened considerably – by 3.2 times for cereals, 28% for
cotton and 76% for tobaccos.
In January-May 2002, fixed investments were $711,3 million, up
two times from the respective period in 2001. Foreign
investments made up 82.7% of overall investments.
Per capita incomes of population in January-May 2002 were
$42.3 a month. During the same period disposable incomes were
$40.7 a month. The current inflation rate exceeds that in
January-May 2001 by 1%. In January-May of 2002 the GDP
deflator was +0.8%. In this period, exports dropped by 32.9%
while imports increased by 29.5%.
Major macroeconomic
indicators
January - May 2002
AzM bn to respective period of
GDP
9,832.0
3,848.3
Industrial production
Agriculture
478.7
Investments
3,429.7
Foreign trade and Current account ($ mil):
Export, January- April
545.5
Import, January- April
491.9
Balance
+53.6
Current account
-173.6
the last year+, -%
+8.3
+1.0
+3.2
+100.0
-32.9
+29.5
X
-1.5
Source: State Statistics Committee
Sources used:
“Profile", ”Sharq” & Guba Region
Agricultural Show Association
-www.managementhelp.org/fp_progs/org_dev.htm
This is the web site of the Free On-Line Non-profit Organization and
Development Program (Free Non-profit Micro eMBA). The program is a
12-module, on-line and for free program designed for nonprofit leaders,
managers, staff, volunteers and service providers.
Feel free to submit your own articles or lessons learned
Please pass the EO Bulletin on to any interested parties
4 Magomayev Str. Icheri Sheher, Baku-370004, Azerbaijan Tel:97-51-72 Fax:97-76-65 E-mail:[email protected]
www.mercycorps.az
FINANCE
IFC Provides Financial Services To Small
and Medium Enterprises
the enterprise. Currently the SOF is discussing detailed
implementation of this project with the Ministry of Finance and
Ministry of Economic Development. The SOF has plans to draw
some other international financial institutions into the potential Fund
for Development of Small and Medium Enterprises, too.
Credit Pool Is On The Horizon
International Financial Corporation (IFC) has
decided to continue its partnership with
Azerigazbank and Rabitabank within the
framework of the small and medium enterprise development
program. In addition to these banks, IFC plans to involve two other
banks in the small and medium business crediting component of the
program.
IFC opened a $800,000 credit line for Azerigasbank and Rabitabank
in 1998 in the framework of the mentioned program. However,
these banks could utilize only half of the given funds. For the
current stage of cooperation, IFC plans to increase credit volume to
these banks in the light of their increased branch network and
capability since 1998.
IFC is also planning to be one of the founders of the Micro-finance
Bank that is to emerge in autumn of 2002. The other partners of the
Bank include KfW, IFC, EBRD and LFS –Financial Systems
GmbH.
PROGRAMS
Seminars on Commercial
Proposals and Tenders
Citizens Democracy Corps (CDC) has
started a chain of seminars on Writing
Commercial Proposals and Participating in
Tenders for local entrepreneurs in Azerbaijan. The main aim of the
seminars is to improve the skills and abilities of local entrepreneurs
for writing commercial proposals to and participating in tenders of
oil companies. Similar seminars have already been organized in
Baku, Ali-Bayramil and Ganja.
This autumn, the organization plans to start seminars on topics
including contractors’ conditions and development of personnel,
environment and health policies. The seminars target improved
cooperation and business relations between local entrepreneurs and
oil companies.
CDC conducts these trainings within the $4,5 million Business
Development Project funded by the United States Agency for
International Development.
Agricultural Show in Guba
The Guba Region Agricultural Show Association will hold an
agricultural show in Guba on 24th-25th August. Long Forest, Land
O’Lakes, ACDI-VOCA, and British Embassy sponsor the show.
The show is designed to facilitate exchange of expertise, expansion
of business contacts and access to resources on a regional level
between farmers, entrepreneurs, International and Local NGOs,
Government and municipality representatives. The event is expected
to result in the development of sustainable market chains, and
business relations. For participation at or more information about
the show, you can contact Guba Region Agricultural Show
Association at [email protected].
State Oil Fund Will Fund Small
and Medium Enterprise Development
The State Oil Fund (SOF) plans to set up a new fund to support
small and medium enterprise development in Azerbaijan. Such a
fund is expected to provide small loans to enterprises or to invest in
The National Bank of Azerbaijan (NBA) and the Ministry of
Economic Development are working together to create a credit pool
to fund small and medium enterprise projects in Azerbaijan.
According to NBA, this pool is necessary because of the increase of
demand for credit and lack of adequate credit resources in the
country. The envisioned credit pool will attract the financial
resources of banks, international donors and organizations and other
sources.
Currently, the government plans to add to the pool non-utilized
resources of the Agrocredit Fund. In addition untouched funds
envisioned for support of small and medium entrepreneurship are
also under consideration to be channelled to the pool. The National
Bank will also invest its resources in the pool.
BSC Opens Regional Offices
In June 2002 the UNDP Private Sector Support Project funded
Business Support Centre (BSC) opened its second regional office,
the Family and Women's Business Centre in Ganja. Additionally
BSC plans to open its third regional office in Jalilabad in 2002.
The priority of the Ganja Centre will differ from the one opened in
Guba last year. It will mainly focus on its services to women and
youth. The Centre will provide them with business development
services including business trainings, consultations and support in
business planning.
According to a source at BSC, every year the organization provides
business development services to more than 12‚000 clients from
200 private companies in Azerbaijan.
SFDI Has Completed Selection of Organizations
to Provide Financial Services to IDPs
In June 2002 the Social Fund for Development of IDPs (SFDI) has
selected the last organizations to provide financial services to IDP
entrepreneurs. They will credit IDPs in Baku, Sumgait, Absheron,
Khizi, Siyazan, Devechi, Guba, Gusar and Khachmaz. These
organizations include two credit unions, Nicat and Komek and
international humanitarian organization, Norwegian Refugee
Council (NRC).
SFDI selected organizations to offer credit to IDPs in southern
regions in March 2002. They were Finca, Relief International,
World Vision, and credit unions including Agro-invest, Alinazarli
and Amin.
SFDI’s financial services project plans to increase Employment
Opportunities for IDPs and will use $2.1 million out of Fund’s $10
million for providing loans to IDPs. These projects will continue
until March 2003. The loan amount within these projects is
expected to range between $500 and $2000.
US Eximbank Targets Infrastructure Development in Azerbaijan
The US Eximbank has recently launched a new round of negotiations with Azerbaijani companies on the funding of new joint projects. The bank’s priority in Azerbaijan is to improve infrastructure.
For this purpose Eximbank looks for cooperation both with private
and public companies.
In the last three years Eximbank has provided $865 million credit to
projects in Newly Independent States‚ including $65 million for
Azerbaijan. The bank began cooperating with Azerbaijan in 1997.
Economic Opportunities
Contributors to this issue of Economic Opportunities Bulletin are:
William Holbrook
Kamran Abdullayev Chingiz Mammadov
Ramil Maharramov
Sue Leonard
Bulletin