By Ayya Lmahamad
Azerbaijan’s State Oil Fund (SOFAZ) has become one of the top five most transparent sovereign funds in the world, the fund’s press service reported on March 6.
SOFAZ has been ranked fifth with 92 points among 64 sovereign wealth funds on transparency and accountability for 2019 by the US-based Peterson Institute for International Economics in its report in February 2021. The institute evaluates the performance of sovereign wealth funds in terms of transparency and accountability.
The 2019 evaluation schedule was based on an assessment of various areas, such as global sovereign wealth fund governance, governance, sustainability, transparency and accountability, and application of the Santiago Principles. SOFAZ scored near the maximum points in each category in the 2019 assessment.
The top five funds in the list are Norway Government Pension Fund-Global (with 100 points), New Zealand Superannuation Fund (with 94 points), U.S. Permanent Wyoming Mineral Trust Fund (with 93 points), Chile Economic and Social Stabilization Fund (with 92 points) and Azerbaijan State Oil Fund (with 92 points).
SOFAZ was established in December 1999 by the Presidential Decree and is a sovereign wealth fund of Azerbaijan, which accumulates and preserves the nation's oil and gas revenues for future generations. The fundamental mission of SOFAZ is to ensure intergenerational equality with regard to the country's oil wealth and to accumulate and safeguard the oil revenues for generations to come.
The Fund accumulates income from the sale of oil contracts, and in 2003 it started to make transfers to the state budget of Azerbaijan. As for now, SOFAZ contribution to the country’s GDP is over 80 percent.
The Fund was established by Azerbaijani leader Heydar Aliyev as an important part of the successful oil strategy to ensure the fair distribution of oil and gas revenues between the present and future generations.
SOFAZ, playing an important role in the country’s socio-economic, has been recognized worldwide as an exemplary fund in the areas of asset management, corporate governance, institution building, accountability and transparency and has received high awards since the beginning of its operation.
Moreover, the Fund has made a significant contribution to the preservation of the country’s high prestige.
Ayya Lmahamad is AzerNews’ staff journalist, follow her on Twitter: @AyyaLmahamad
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