Baku, Azerbaijan, July 22
Trend:
The World Bank Group's Board of Executive Directors has discussed and endorsed the 2015-2020 Country Partnership Framework (CPF) for Azerbaijan, said the message posted on WB website.
This CPF represents a five year joint strategy of the World Bank Group comprising the International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC), and Multilateral Investment Guarantee Agency (MIGA). It aims at supporting Azerbaijan on its path toward sustainable, inclusive and private sector-led growth.
The CPF is underpinned by the Systematic Country Diagnostics (SCD) for Azerbaijan, the World Bank Group's comprehensive analysis of economic conditions, challenges and constraints that the country faces in the short and longer term. It proposes a program that will help address a selected set of those constraints, and which is well aligned with Azerbaijan's own development priorities and the World Bank Group's global twin goal of reducing poverty and boosting shared prosperity.
Over the past decade, Azerbaijan has made remarkable progress in reducing poverty and boosting shared prosperity. Poverty incidence declined from close to 50 percent of the population in the early 2000's to about 5 percent in 2013, accompanied by growth of the middle class from about 4 percent to 29 percent of the population during the same period. These achievements were largely accounted for by a stellar economic performance with an economic growth rate of 13 percent on average and substantial public spending from oil revenues. In the current environment of low oil prices, slowdown of oil production and uncertain regional economic prospects, Azerbaijan is looking for a new growth model in which the private sector will play a central role.
"The World Bank Group's new Country Partnership Framework is coming at a challenging yet opportune time for Azerbaijan. In the turbulent global economic environment which calls for efficiency in public spending and for a new model of growth, the CPF will help Azerbaijan maintain and enhance its achievements on the twin goals and strengthen the country's resilience to external shocks", said Henry Kerali, World Bank Group Regional Director.
The CPF focuses on two areas: Public Sector Management and Service Deliveryand Economic Competitiveness, which are supported by eight specific objectives. Under the CPF's first focus area, the World Bank Group will help the country strengthen public resource management, facilitate public service delivery and improve the quality of environmental assets. Under the second focus area, the World Bank Group will provide support for improving selected infrastructure networks, increasing the country's financial inclusion, reducing regulatory burden on the private sector, and supporting economic activities in rural areas. The themes of governance and gender are recognized as critical for effective management of resources, social inclusion and accumulation of diversified assets and, as such, will be duly addressed across the whole CPF program.
The CPF objectives will be achieved through a number of ongoing operations and new interventions, both as investment lending and technical assistance. Advisory and analytical work that will be carried out by the World Bank Group will underpin the proposed lending projects as well as cater to the government's emerging needs with "just-in-time" responses.
IFC's primary focus will be on supporting the CPF's economic competitiveness agenda, continuing and strengthening initiatives to boost financial inclusion and improvements in the business environment. IFC will also seek investment and advisory opportunities to support the real sector, including critical infrastructure projects, agriculture, and other export-oriented sectors.
"We are committed to helping Azerbaijan's private sector create new jobs and contribute to growth. IFC's investments and advisory services in the financial sector will remain a strategic priority, helping to increase access to finance for businesses across the country. We will also help reduce regulatory barriers for businesses and support the government to leverage public-private infrastructure finance mechanisms," said Jan van Bilsen, IFC Regional Manager for the South Caucasus.
Azerbaijan joined the World Bank in 1992 and IFC in 1995. The World Bank commitments to the country over the last two decades have totaled over $3 billion for 55 projects. The current World Bank investment portfolio in Azerbaijan includes 16 projects with a total commitment of $2 billion. Since 1995, IFC has invested more than $365 million in 54 long-term finance projects and mobilized $74 million from other lenders. IFC has also supported trade worth about $77 million through its trade finance program, and implemented advisory projects focused on private sector development.