Round table discussion conducted on oil revenue management

Economic Research Center ( ERC) conducted round table discussion on “Management of oil revenues” within the framework of the project implemented with financial support of Revenue Watch Institute ( RWI) on May 08. 

GalibTogrul, the chairman of Management Board of ERC opened the event and informed the participants about the project and aim of the round table discussion. He noted that the similar discussion were held at four universities ( Caucasus University, Khazar University, Azerbaijan State Economic University and Azerbaijan University), 2 youth organizations and with representatives of diplomatic missions located in Baku.
The main aim was to study the feedbacks, opinions and recommendations in order to improve the document. The chairman mentioned that the main of ERC to conduct such discussions was to contribute to “ Strategy on long-term management of oil-gas revenues” and “ Azerbaijan 2020: view to the future”.
Afterwards, the program director of RWI on Azerbaijan FidanBagirova delivered speech and stressed the importance of effective usage from limited oil resources of Azerbaijan.
Then, ERC expert GubadIbadoglu delivered presentation on “Retrospective and perspective view to oil revenue management in Azerbaijan”. In his presentation, he touched upon the current situation related to oil production and revenues, official projections, regulations over management of oil revenues and fiscal rules, including demonstrated the recommendations prepared by ERC in this direction.
The expert noted that the assets of Oil Fund was 34,2 billion dollars as of January 01, 2013 and 49,7 billion dollars or 59,3 % of oil revenues have been already spent. He also brought world examples and experiences, such as permanent revenues, relative changeable transfers, stable market and constant transfers that are being periodically changed. G.Ibadoglu also talked about the recommendations prepared within the frames of the project.
The recommendations covered following fields:
- Adaptation of spending and management of oil revenues to fiscal rules
- Limitation of transfers from Oil Fund to state budget based on constant transfers that are being regularly updated
- Lowering the share of non-oil budget deficit over non-oil GDP gradually for short-term and mid-term period and minimizing it in the long-term
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- Creation of optimal balance between saving and consumption on management of funds of Oil Fund
- Saving of funds for future generations and provision the fair distribution of resrouces among generations
- Elimination the funding of infrastructure, social and investment projects directly from the budget of Oil Fund
- And other important recommendations were also covered.

After the presentation, GubadIbadoglu responded to the questions and later the feedbacks from experts were received. The head of Oil research Foundation IlhamShaban, economic experts NatiqJafarli, RovshanAgayev, MahammadiTalibli, including politicians ZardushtAlizada and other important figures provided their opinions over this topic.
It should be noted that the representatives of state agencies ( State Oil Fund, Ministry of Industry and Energy, Ministry of Communication and Information), scientific and academic circles ( Azerbaijan State Oil Academy, Azerbaijan State Economic University), international organizations ( World Bank, German International Cooperfation Organization, OXFAM, BP, “ Binagadi Oil”, Revenue Watch Institute), diplomatic missions ( Embassy of Kazakhstan, Embassy of Gatar, OSCE, Helsinki Citizen Assembly) and at the same time local NGOs specialized in this field ( Cente for Economic and Social Development, Extractive Industries Transparency Initiative, Oil Research Center, Center for Support to Economic Initiatives).