Azerbaijan ready to assist poor countries through WB arm (UPDATE)
By Gulgiz Dadashova
Azerbaijan supports the initiatives to assist poor countries and ready to share its experience in this regard.
The Central Bank of Azerbaijan (CBA) reported that the country welcomed the offer of the World Bank (WB) to join the initiative of assisting the poorest countries.
The International Development Association (IDA) is the part of the WB that helps the world's poorest countries. IDA, being one of the largest sources of assistance for the world's 82 poorest countries, aims to reduce poverty by providing loans and grants for programs that boost economic growth, reduce inequalities, and improve people's living conditions.
Azerbaijan's joining IDA was mulled at a meeting of CBA President Elman Rustamov with a WB delegation led by Vice President for Concessional Finance and Global Partnerships of the IDA Joachim von Amsberg last week.
Joachim von Amsberg appreciated the dynamics of Azerbaijani economic development, social and economic reforms and large-scale infrastructure projects implemented in the country.
Rustamov, in turn, said that bilateral relations between the WB and Azerbaijan are being developed successfully.
Azerbaijan, within the framework of IDA, is ready to share its experience with other countries, together with other investors to finance projects and participate in new initiatives of international financial institutions, Rustamov said.
The sides discussed the results of the technical and financial support from the WB carried out within the cooperation framework, as well as the prospects of the Joint Economic Research Program (JERP).
Since its inception, IDA has supported activities in 108 countries. Annual commitments have increased steadily and averaged about $15 billion over the last three years, with about 50 percent of that going to Africa.
IDA lends money on concessional terms. This means that IDA charges little or no interest and repayments are stretched over 25 to 40 years, including a 5- to 10-year grace period. IDA also provides grants to countries at risk of debt distress.
According to local media, Azerbaijan filled the ranks of potential donor countries after it repaid $300 million of its liabilities to the IDA in 2013 ahead of schedule.
Early payments did not cause harm to the social and investment programs of the government. The early payments to the IDA were planned by the Finance Ministry in advance and spending for these purposes was taken into account in the law on 2013 state budget.
Over the past 10 years, Azerbaijan has managed to achieve unimaginable economic success. The gross domestic product has tripled, while industrial production has increased 2.5 times. Unemployment is being eliminated and poverty has declined from 50 to 6 per cent. Budget expenditure has increased almost 20-fold, while inflation is at the level of about 1 percent. During the mentioned period, more than $130 billion has been invested in Azerbaijan and a certain part of this investment accounted for foreign funds.
International credit rating agencies have upgraded the credit rating of Azerbaijan and the country's foreign debt accounts for only 7 per cent of the gross domestic product. In terms of competitiveness, Azerbaijan already ranks 46th in the world.
Azerbaijan has already developed the long-term development concept "Azerbaijan 2020: Vision of the Future", which aims to increase exports of the non-oil sector of the economy, reduce poverty, etc.
Experts say that if these goals are achieved, Azerbaijan will enter the list of countries with high average incomes of the population, and in the future -- the group of high-income countries.