Participating in the event were around 50 activists based in Balakan – heads of local NGOs, local office of the Red Crescent Society, resources centre on human rights, teachers, government and state officers, youth students, deputy chairman of the regional representative office of the ruling Yeni Azarbaycan Party (YAP) and the chairman of the opposition Mussavat Party and others – as well as Mr Asgar Ahmad, Ms Ruhangiz Huseynova, the chairman of the Solidarity among Women public union, and Mr Zohrab Ismayilov, in capacity of a speaker, the head of the Centre for the Support of Open Economy.

Opening the event, Mr Asgar Ahmad let the participants briefly introduce themselves and gave an insight into the topic, the significance of the meeting, the need for the Extractive Industries Transparency Initiative (EITI), the fundamental principles and philosophy of EITI. Then he passed the floor over to Mr Zohrab Ismayilov. In his presentation Mr Ismayilov analysed the situation with oil production in Azerbaijan, warning of a gradual decline in the annual output beginning from 2010 onwards, down to the level of 2003 in 2023. Shrinking production will likely set the net amount of oil incomes falling. He made an emphasis on the urgent necessity of the prudent use of oil incomes in order to avoid economic repercussions following a recession in production. Mr Ismayilov also said that the spending of petrodollars was a major problem on agenda for Azerbaijan.

In his presentation Mr Ibadoglu exposed economic and political reasons behind the oil contracts that had been signed with Azerbaijan, and provided information about the existing types of oil contracts and the corresponding kind of the agreement which had been preferred by Azerbaijan. Mr Ibadoglu also informed the audience of the subject and terms of oil agreements, the duties and responsibilities of the parties to the agreements, taxation regime, tax obligations of the relevant contractors and subcontractors, bonuses and the mechanisms for bonus payment, rules of arbitration, etc. Then he touched upon the issues related to the income which was made on the implementation of oil agreements, the formula of income distribution among the parties to the agreement, model(s) for the accumulation of incomes from the corresponding projects, and the methods of compensating the expenditures. Speaking of the areas of the spending of petrodollars in accordance with the 2007 state budget, he stressed the importance of channelling oil incomes into the prioritized sectors with respect to the future development of the country. At the end of his presentation Mr Ismayilov laid a stress on the crafting of an oil law and oil strategy to regulate the effective use of oil incomes and incorporate other issues related to oil.

Questions asked

Question 1: How much of oil incomes is allocated for the army?

Questions 2: Are there crafted the strategies for the sources of alternative income?

Question 3: How much is invested in human capital?

Question 4: What is the role of oil incomes in the development of the farmers?

Question 5: How can a citizen influence on the proper use of oil incomes?

Question 6: What is the extent of the influence of the Coalition on the proper use of oil incomes?

Observations

It became clear from the expressions by the participants of the event that residents of Balakan were aware of oil incomes. Indeed, the region benefited by petrodollars: the money was spent on the building up of a hospital, a school, the laying out of a park and development of tourism infrastructure.

The issue which the participants were interested in the most was about efforts to yet scale up the attention to the development of education and the farmers.

Meanwhile, citizens said that they were observing the entire process of the spending of petrodollars, but did not have any leverage over that process in general.

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Last correction date of the file: 24/7/2008 - 14:59:3

Other language version of the file: /az/