Azerbaijan : Public Expenditure Review

World Bank

Azerbaijan : Public Expenditure Review

2003

World Bank

Azerbaijan has experienced robust economic growth during the past seven years, aided by its oil sector development. Nevertheless, poverty is still pervasive and social indicators have deteriorated. The oil and gas windfall will be of undoubted benefit to the country and its citizens if combined with a very careful macroeconomic policy and fiscal stance, as well as steadfast implementation of the structural reform program and poverty reduction strategy. The experience of other resource rich countries has often been disappointing and left large strata of the population in continued poverty. The main challenge for Azerbaijan is to design and implement a policy agenda that leads to poverty reduction and improves incomes as well as equity, while maintaining macroeconomic and financial stability. This Public Expenditure Review (PER) focuses on the public expenditure part of the overall policy agenda. Its main objective is to provide a framework for more efficient use of public resources and more effective poverty reduction efforts. This framework is designed to be consistent with the maintenance of overall macroeconomic stability and with sustainable economic growth in the non-oil sector. The macroeconomic achievements over the past five years have been encouraging. Continuing these achievements, however, may present a greater challenge to the authorities in the coming decade. The relatively speedy accumulation of fiscal revenues related to the oil and gas windfall will create heavy spending pressures. Using these funds unwisely or out of the context of a sound vision of the country's sustainable economic development path will create macroeconomic instabilities, inefficient and non-competitive non-oil activities, or both. The basic conclusion and simple recommendation of this PER is that Azerbaijan follow a fiscal strategy consistent with sustainable development of the non-oil sector, while over time mending institutional weaknesses and structural deficiencies, and investing in its people.

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AGROVOC Keywords

balance of payments capacity building cash transfers civil society data collection debt development economics development policies economic development economic growth employment exchange rate external debt extreme poverty fiscal policies gas extraction gnp growth rate human capital income inflation institution building institutional reform interest rates living standards local government mineral oil fields oil production petroleum pipeline poverty reduction productivity public expenditure public finance public investment public sector public services resource allocation rural areas rural poverty savings social indicators social protection social services structural adjustment structural change sustainable development urban areas

Bibliographic information

Publisher

World Bank, Washington, DC

Other Subjects

Oil companies; Gas exports; Financial intermediation; Institutional framework; Hard budget constraints; Institutional arrangements; Analysis process; Empirical evidence; Business environment; Fiscal management; Oil price; Priority areas; Rural infrastructure; Gas projects; Poverty reduction strategy; Enterprise restructuring; Macro policy; Fiscal decentralization; Gas reserves; Social sectors; Gas sector development; Sectoral allocations; Fiscal revenues; Financial mechanism; Health status; Sector reforms; Poverty line; Currency unit; Public expenditures; Technical assistance; Poverty comparisons; Poverty rate; Economic cooperation; Fiscal revenue; Reducing poverty; Oil prices; Oil and gas; Fiscal deficit; Transition process; Fiscal stance; Poor children; Ministry of finance; Public expenditure management; Institutional capacity; Oil and gas sector; Economic management; Institutional reforms; Cpi; Foreign exchange; Productivity growth; Foreign direct investment; Rich countries; Medium term; Execution; Macroeconomic policy; Rent-seeking behavior; Labor market; Poverty assessment; Government revenues; Authority; Capital investment; Social expenditures; Political economy; Policy measures; Exchange rates; Gas prices; Public °° sector; Real exchange rate; Resource constraints; Gas development; Adjustment policies; Policy framework; Resource curse; State procurement; Gas sectors; Monetary stabilization; Donor community; Government expenditures; Macroeconomic framework; Public procurement; Macroeconomic stabilization; Government spending; Tax revenues; Formal economy; Human development; Private consumption; Citizens; Budgetary expenditures; Public resources; Asset management; Policy choices; Economic performance; Policy stance; Financial sector; Public finances; Expenditure analysis; Gas output; Fiscal sustainability; Oil; Governmental organization; Growth rates; Oil sector; Macroeconomic management; Fiscal; Budget system; Barrel; Public expenditure review; Institutional weaknesses; Expenditure cuts; Urban workers; Price stability; Gas field; Exploitation; Macroeconomic conditions; Audits; Gas pipeline; Gas resources; Development goals; Real interest rates; Macroeconomic stability; Oil company; Nations; Budget management; Analytical work; Fiscal policy; Annual growth; Market economy; Real terms; Public spending; Reform program; Structural reform; Long run

License

http://hdl.handle.net/10986/13825http://creativecommons.org/licenses/by/3.0/World BankCC BY 3.0 Unported

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