Azerbaijan to build on its macroeconomic management

9 September 2008

BP on behalf of its co-venturers in Azerbaijan and the Ministry of Economic Development (MoED), recently signed a memorandum of understanding (MOU) for the implementation of an advisory programme on macroeconomic management and institutional reform. 

The objective of this project is to assist the MoED in managing high economic growth, achieving macroeconomic stability, and implementing efficient structural reforms. This assistance will mainly include advisory service and technically sound analyses to shape the macroeconomic policy formulation by the Ministry. Overall, the project is designed to support MoED’s efforts to enhance the efficiency of its activities and increase its capacity to plan, implement and monitor the processes aimed at sustainable economic growth in Azerbaijan. 

“We are pleased to have this opportunity to support the Ministry of Economic Development by contributing to the development of capability in areas of macroeconomic analysis, institutional reforms planning, and policy formulation. The project will also provide recommendations and assistance in structural reforms planning and implementation processes through leading international advisory services. The entire project has been designed in close co-ordination with the Ministry, and we strongly believe once successfully implemented, it will benefit the country,” says Bill Schrader, President of BP in Azerbaijan. 
“We welcome this project, which covers a range of areas that are very important for planning Azerbaijan’s economic growth at this stage. These include implementation of economic analyses, evaluation of key economic data and preparation of long-term macroeconomic projections, advice on enhancing structural reforms, including institutional development, building analytical and planning capacity within MoED for the adoption of comprehensive public investment policies, enhancement of MoED capacity in preparing a concept paper for the annual budget submissions and strengthening of statistical data analysis to monitor macroeconomic conditions and evaluate the impact of structural reforms on economic growth. All of these are priority activity directions ensuring Azerbaijan’s dynamic development in the near future”, says Heydar Babayev, Minister of Economic Development of Azerbaijan. 

The duration of the project is two years. 

Notes to editors: 

BP as the operator of Azerbaijan’s major oil and gas development and transportation projects on behalf of its partners has set an ambitious target to continually increase the value of contracts placed with Azerbaijan-owned companies. To reach this target, BP and its co-venturers have opened the Enterprise Centre in Baku to support local companies and encourage their participation in BP projects. In 2007 BP on behalf of its co-venturers spent $111m directly with local Azerbaijani small and medium size enterprises (SMEs) – a significant increase from the 2006 spend. The driving force behind these initiatives is BP and its co-venturers’ commitment to the sustainable economic development of Azerbaijan. 
As part of this commitment BP and its co-venturers: 
  • are funding the Enterprise Development and Training Programme (EDTP) – a multi-million initiative aimed at increasing the local content of BP and co-venturers contracts in Azerbaijan and thereby contributing to the healthy and transparent development of local economy;
  • are funding the Supplier Finance Facility (SFF) – a unique initiative in support of local enterprise development in Azerbaijan. The SFF is a joint credit facility established by BP on behalf of its co-venturers, International Finance Corporation (IFC) and the Micro Finance Bank of Azerbaijan (MFBA). This $15-million project is designed to give greater access to finance for Azerbaijan's local oil and gas industry supplier and service enterprises;
  • are sponsoring the Best of Business local enterprise awards to encourage local business development and excellence in performance. The awards recognize outstanding local and international companies and business personalities whose entrepreneurial skills contribute to the success of BP-operated oil and gas projects and make a lasting impact on the local business environment;
  • are supporting in cooperation with the European Bank for Reconstruction and Development (EBRD) and IFC private sector development in Azerbaijan through creating transparent and effective access to commercial finance for local businesses including SMEs and micro-enterprises;
  • are funding together with IFC, a member of the World Bank Group, and the Swiss State Secretariat for Economic Affairs (SECO) the Azerbaijan Business Enabling Environment Project. This five-year program is designed to support the efforts of Azerbaijan’s government to improve the business environment and ensure sustainable and diversified economic growth;
BP also leads a number of other significant initiatives to encourage the non-oil sector and support enterprise development throughout Azerbaijan through Regional Development Initiative, Community and Environmental Investments and Cultural Heritage Programmes, educational and other capacity-building sponsorships. 


For further information please contact:
Tamam Bayatly, BP Baku Press office, telephone:      994 (0) 12 599 4557