ADB reconsiders plans on Azerbaijan’s new policy

Business Materials 18 September 2012 13:32 (UTC +04:00)

Azerbaijan, Baku, Sept. 18 / Trend A. Akhundov /

The Asian Development Bank (ADB) will discuss the country's decision to reduce the foreign loan attraction under state guarantee unless it is necessary with the Azerbaijani government, head of ADB representative office in Baku Olly Noroyono told Trend on Monday

In his speech at the meeting of the Cabinet of Ministers dedicated to the socio-economic development in the first half of 2012 and the further challenges, President Aliyev said that Azerbaijan must be more cautious while attracting additional loans.

At present, international organisations specify the areas of activity in the country in line with the new approach of the Azerbaijani government.

"We will discuss how this policy will affect the country's ability at attracting foreign borrowing with the government, as the country will implement it in practice," he said. "Of course, we will adapt our operations to this policy."

He added that the Azerbaijani government's policy is normal and expected.

"Every country must do this," he said. "The country must assess its needs in developing, and encouraging financing from abroad and studying funding sources. Of course, we will reconsider the policy in this regard."

As the government source said earlier, there is no reason for the international financial organisations working with Azerbaijan to worry.

"Azerbaijan has always adhered to a conservative approach to the external debt," a source said. "The crisis in developed countries has shown that one of the main causes of negative shocks in the economy is the high level of external debt.

"This does not mean that Azerbaijan will not attract borrowing. If there are opportunities to draw loans on favourable terms, Azerbaijan will do this. However, Azerbaijan always keeps the maximum level of borrowing under control, and it will be always under control."

The World Bank told Trend earlier that the bank fully supports the government's new approach to the cautious policy of attracting foreign borrowings.

Azerbaijan has been a member of ADB since 1999. The ADB's active credit portfolio reaches $680 million. The bank allocated grants amounting to $13.122 million to the Azerbaijan government and local companies during the period of cooperation.