Advisory Service Technical Project in Azerbaijan is extented

During its 20 years of independence, Azerbaijan, similar to other CIS (Commonwealth of Independent States) countries, faced many challenges namely economic distortion and contraction, deterioration in social services and infrastructure, and a rise in poverty. Although the poverty rate has been reduced in recent years due to revenue from oil production, the promise of widespread wealth resulting from the continued development of Azerbaijan's energy sector remains largely unfulfilled.

In line with the previous Advisory Service Technical Project in Azerbaijan CASE Fellows Alexander Chubrik and Mateusz Walewski (CASE Network Studies & Analyses No.417) have found that throughout the period household incomes were tightly correlated with oil GDP than with non-oil growth, employment was the most important source of income growth, and poorer households changed their coping strategies from subsistence agriculture to paid- and self employment. Although these changes led to a dynamic increase in incomes, it hardly changed the consumption basket, with food still constituting more than 65% of spending. Lastly, low effectiveness of social transfers and their even distribution among income deciles have played a negligible role in the income growth of the poorest households.

The project Advisory Service on Macroeconomic Management and Institutional Reform at the Ministry of Economic Development (MoED) of Azerbaijan is an extension of the completed Advisory Service on Macroeconomic Management and Institutional Reform at the Ministry of Economic Development, which started on 1 September 2008. The purpose of the one year CASE Advisory Service Technical Assistance Project, is to provide high-quality policy advising and training services to the Ministry of Economic Development of the Republic of Azerbaijan with the aim of upgrading the quality of economic policy-making process in this country and enhancing the institutional and human resources capacity of this key government agency. CASE experts will concentrate their work on the following three thematic topics:

1. macroeconomic policy, including monetary and fiscal policies, price stability, budget reform, macroeconomic forecasting, impact of oil prices and revenue on economic growth and other macroeconomic indicators, inflation;
2.  structural and investment policies;
3. social policy.

The project is supported by the Regional Development Initiative funded by British Petroleum, Statoil, SOCAR, TPAO, Total, LUKoil, NICO, Chevron, ExxonMobil, ITOCHU, Devon, Amerada Hess, ENI, ConocoPhillips and INPEX.