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JULY, 2002
UNDP seeks to help Azerbaijan develop non-oil sector,
redistribute wealth
UNDP Director of the Regional Bureau for Europe and the CIS
Mizsei Kalman has said that Azerbaijan faces a difficult task
in ensuring that the whole country benefits from its oil wealth.
He said the republic's poverty reduction programme has been
drawn up with UNDP help and the main emphasis should be on
developing "human potential" to speed up development
of the non-oil sector of the economy and thus achieve the
desired redistribution of wealth. The following is the text
of an F. Asim report by the Azerbaijani newspaper Zerkalo
on 18 July entitled "Few countries can turn oil wealth
into the nation's property,":
Director of the UNDP Regional Bureau for Europe and the CIS
Mizsei Kalman said in an exclusive interview with Zerkalo
during a visit to Baku.
UNDP Assistant Secretary-General and Director of the Regional
Bureau for Europe and the CIS Mizsei Kalman, who is in Azerbaijan,
has given an exclusive interview to Zerkalo newspaper about
this international organization's policy. The UNDP resident-coordinator
for Azerbaijan, Marco Borsotti, also took part in this interview.
[Correspondent] You took part in the signing of a memorandum
between the UNDP and the Ministry of Economic Development.
What is the UNDP's role in this process and what are you planning
to do?
[Kalman] The UNDP resident-coordinator for Azerbaijan, Marco
Borsotti, signed a three-year memorandum on mutual understanding
with Minister of Economic Development Farhad Aliyev.
The memorandum consists of four main components: increasing
the potential of the Ministry of Economic Development; monitoring
implementation of the state poverty reduction and economic
development programmes; creating an electronic map of Azerbaijani
enterprises and finally, implementing economic development
programmes for Azerbaijan's regions.
The poverty reduction programme is a strategic document drawn
up at national level and the UNDP was involved in preparing
this. The aim of this programme is the dynamic development
of Azerbaijan and also speeding up development of the non-oil
sector to ensure that income from the development of the economy
is spread more evenly among the population. This is an important
task for a country like Azerbaijan, where a significant proportion
of GDP is concentrated in the oil sector.
There are few countries in the world which have managed to
turn oil wealth into the property of the whole nation. This
is a very important task and we see the main ways of achieving
this programme as lying in reinvesting this income into such
strategic spheres as education, infrastructure development,
particularly roads and communications, environmental protection,
rehabilitation of polluted territories and improving welfare
provisions for refugees and internally displaced persons.
[Correspondent] The UNDP resident-coordinator in Azerbaijan,
Marco Borsotti, said during the presentation on the poverty
programme that the Azerbaijani government should appeal less
for aid from donor organizations. Is that the position of
the local resident-coordinator, or UNDP policy?
[Borsotti] Firstly, you have not interpreted my words correctly.
The gist of my statement was that the Azerbaijani government's
share in these projects should be increased. I did not mean
that donor aid from international organizations should be
reduced.
[Kalman] What Borsotti said is a UNDP general directive.
In many countries where we work we really believe that the
effectiveness of the development programme in these countries
depends directly on the financial investment made by the countries
themselves who implement these programmes. If a government
participates financially in a project, this raises the level
of responsibility, emphasizing the programme's importance
for the country. We know from experience that programmes like
this have greater prospects.
[Correspondent] Norway uses Oil Fund money fairly well to
serve its people. How can our funds be used as part of the
poverty reduction programme?
[Kalman] Firstly what must be achieved is that the process
of spending funds is transparent to increase public trust
in the government. In addition to the spheres I have mentioned
- education, infrastructure and environmental protection -
I can further add development of information and communication
technologies. The funds should be used to develop human potential.
[Correspondent] Why does the UNDP devote more attention to
the problems of developing human potential than the problems
of economic development?
[Kalman] Economic growth and poverty reduction are two sides
of the same coin. If GDP increases, naturally it is easier
to redistribute wealth, resolving the problem of poverty.
As I said, there is a serious problem in Azerbaijan of producing
and allocating the domestic product, which is chiefly concentrated
in the oil sector. The task facing Azerbaijan is to find ways
and means to redistribute the domestic product from one sector
to another.
You mentioned the experience of Norway as a country which
probably ranks as one of the countries which has best made
use of its oil wealth to serve the general development of
the economy. The potential sectors I have identified would
also help to make Azerbaijani goods more competitive on both
the local and international market. This can be achieved by
raising the professional level in Azerbaijan. Opting to increase
human potential is a more advanced method of development than
subsidizing prices or providing grants etc. Improving the
infrastructure, access to information technology, a higher
level of education help the population achieve a greater surplus
value. In this way it is possible to achieve a higher level
of income for people in Azerbaijan.
[Correspondent] What has prompted the start of reforms in
the UNDP? What effect might these changes have on the implementation
of projects in Azerbaijan?
[Kalman] The aim of the reforms is to turn the UNDP from
a simple structure providing aid to countries for their development
into a more effective mechanism which can pass on know-how
to developing countries. By creating a network of experts
throughout the world we can help countries by sharing with
them the most advanced experience in development. In this
way we can better match the national development interests
of each country. We are doing the same in your country. We
are providing the most up-to-date experience and know-how
and attracting the best experts to work in Azerbaijan.
[Correspondent] What are the UNDP's immediate plans in the
region?
[Kalman] For Eastern Europe and the CIS I can tell you: it
is to complete the transition from a soviet type system of
running things as quickly as possible and to completely leave
behind in the past the legacy of the planned economy, going
over to market conditions. The main directions are to complete
the transition to market conditions for the economy, democratization
and the social sphere.
In the social sphere what is envisaged is a redistribution
of income so that all parts of the population can benefit
from the market reforms carried out.
[Correspondent] In general what is the UNDP's mandate and
to what extent are projects in Azerbaijan complete in this
sense? In other words, what spheres of the UNDP's mandate
is Azerbaijan not covered by today and why?
[Kalman] The UNDP's mandate envisages cooperating in the
process of democratization and developing human potential
i.e. the areas I have spoken about. I should say that the
UNDP in Azerbaijan is working in all these directions.
[Correspondent] What are the main problems in the region,
in particular in the Caucasus?
[Kalman] I think that the human potential in the region,
including education etc. is very high, despite the fact that
the soviet economy had reached a dead-end by the time it collapsed.
But the socio-economic level of people living in the region
is very low. It is enough to just look at GDP indices. But
we hope that this sub-region will succeed in successfully
integrating into the world community, resolving as it does
so the problems which it faces.
Source: Zerkalo, Baku, in Russian 18 Jul 02 pp 1,4
BBC Mon TCU 190702
EBRD President Urges Greater Transparency in Kazakhstan
(RFE/RL July 9, 2002) European Bank for Reconstruction and
Development (EBRD) President Jean Lemierre told journalists
in Astana on 4 July following talks with Kazakhstan's President
Nursultan Nazarbaev that Kazakhstan must make democratic and
economic processes more transparent, Interfax reported. He
added that the press must play a stronger role in the battle
against corruption. After a meeting on 5 July of the Foreign
Investors' Council affiliated to the presidential apparatus,
Lemierre commented that Kazakhstan has succeeded in stabilizing
its economy and creating more favorable conditions for investors
than other CIS states. According to an EBRD press release
dated 3 July, the bank will loan $100 million to two Kazakh
banks to enable them to on-lend to agricultural businesses.
NGOs Challenge Oil Company Over Oil-Export Pipeline
("RFE/RL Newsline," 2 July) Some 64 predominantly
European NGOs have appealed to the World Bank, the European
Bank for Regional Development, and other major financial institutions
to impose stringent conditions before agreeing to finance
the planned Baku-Tbilisi-Ceyhan export pipeline for Caspian
oil, according to the "Asia Times" on 28 June, as
cited by Groong. They called on British Petroleum (BP), which
heads the consortium formed to build the pipeline, to demonstrate
that the project will benefit the impoverished population
of the regions through which it will run, rather than compound
existing tensions. Caucasus Press on 30 June quoted BP's David
Woodward as assuring Georgian President Eduard Shevardnadze
that construction of the pipeline will begin within three
months.
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