Economy 15:37 18/02/2013 Azerbaijani authorities use up Oil fund

The Government of Azerbaijan has turned into a lazy element and the hope and confidence in stability of the State Oil Fund revenues have transformed the government into club of oligarchs and consumers in the same time, the Azerbaijani information portal says.

“Since last year, the Oil Fund actively purchases properties in overseas. In the near future more than a billion dollars will be spent on the purchase of real estate. Considering the fact that the global economic crisis continues unabated, new waves of crisis occur each year, and experts say that the real improvement will not arrive up to 2020, these steps of the Fund appear to be very risky. As we know, during the crisis the property prices go down in the first place,” the article says.

According to the author, on the other hand, taking into consideration the fact that "with what appetite the authorities of the country use up the Fund through different grand, magnificent and little profitable projects, then it would be better of them to buy property which they we hope will pass to coming generation, and the loss of the price will not be as huge and palpable, as the loss of the Fund means within the country.”

It is noted that in 2013, the cost of the Oil Fund will exceed revenues for the first time, the expected revenues will be $ 15 billion, while expenses - 17.2 billion, that is, 2.2 billion more, and this is a very troubling tendency.

"It seems that the authorities want to finish off Oil Fund reserves quickly and under various pretexts. This fact seams surprising for the election year. Do not they believe in their future?” the portal writes.

Another disadvantage, according to the author, is that the government, relying on the Oil Fund will not be able to a flexible policy.
“Figuratively speaking, the government has become a lazy element, and the hope and confidence in the stability of the translational motion of the Fund’s means has transformed the government into the club of oligarchs and consumers at the same time.

The author compares State Oil Fund of the Republic of Azerbaijan (SOFAZ) with an optimal analogous structure that exists in the world which is Oil Fund of Norway, and stresses that's a long way off Norway. The assets of this Fund that reach $ 300 billion, may be increased to $ 500 billion in about three years and even exceed $ 800 billion in 10 years,” the writer says and notes that the Norwegian government has set a target to use the Oil Fund as little as possible, and leave the money for future generations and for providing a decent senility of its citizens,” the article says.

“In 2003 each inhabitant of Norway was getting 35,360 dollars and today, this figure is close to threshold of 100 thousand. And what we will leave to future generations? If it continues like this, there will be only nuts...” he concluded.

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