Kazakhstan, Astana, 24 April /corr. Trend K.Konirova / Exclusive interview by Trend Special Correspondent in Astana with Azerbaijan's Minister of Economic Development, Heydar Babayev, who is on a visit to Kazakhstan to attend the meeting of the Azerbaijan-Kazakhstan Inter-Governmental Commission for Economic Co-operation. Babayev is the Co-chairman of the Commission from the Azerbaijani side.
Question: In addition to participation at the meeting, is your visit to Astana connected with solving the grain issue?
Answer: Our position is to clarify the situation. If the Government of Kazakhstan decided to impose, I would not call it 'ban', but limit the grain export, it is productive for the Country's national interests. We respect the decision made by the Country, but we have several issues which should be specified. Before imposing a ban, contracts were concluded between the Kazakh companies and Azerbaijan and 100% pre-payment was made on them. These companies ask us, and we, as a Government, should answer them on how to settle the situation and whether the funds will be repaid. As you know, according to international practice, the ban cannot be referred to those contracts which have been pre-paid. It cannot be explained through force-majeure, and we would like the Kazakh side to reply to these questions. Reponses have already been made to several questions.
Question: How did the worldwide financial crisis affected Azerbaijan's economy?
Answer: The level of inflation in Azerbaijan is higher than Kazakhstan. I would like to compare the activities of the governments of the two countries, but the expenditure part of Kazakhstan's budget increased less as compared to Azerbaijan, and inflation pressure was higher in Azerbaijan. We do not produce grain. The grain is linked with many products, especially if we speak about inflation today, it is food inflation and Kazakhstan has many opportunities to regulate the prices for foodstuff.
The financial market of Azerbaijan suffered least of all from the worldwide financial crisis. There are subjective reasons for it - the mortgage business has not strongly developed in Azerbaijan, The state acted minimally in this regard and the commercial banks were less involved. In order to mitigate the impact of the worldwide financial crisis on Azerbaijan's banking system, the National Bank of Azerbaijan (NBA) strengthened the control and applied standards of obligatory reserving. As a result, no Azerbaijan bank suffered.
Question: In summer last year, ideas were expressed to construct a new pipeline on a par with the existing Baku-Tbilisi-Ceyhan pipeline.
Answer: A parallel pipeline can be constructed. Principally we are interested in it. As more energy resources pass through Azerbaijan, the more it will be beneficial for the Country economically and I think politically as well.
Question: How is the work going on to establish the Kazakhstan Caspian Transport System?
Answer: Azerbaijan's policy and responsibility is limited outside the Country. Within the Country, we will create technical possibilities and an infrastructure which will provide fraternal countries, including Kazakhstan, with an opportunity to transport their energy resources to the markets via Azerbaijan. However, we are prepared to support, but not persuade.
If Kazakhstan decides to transport its oil and gas, Azerbaijan is prepared for this. We understand how it is beneficial to have a status of transit country and we are technically ready. Today we have the Baku-Tbilisi-Erzurum (South Caucasus Pipeline) an Erzurum is the gas distributing network of Turkey. There is the Baku-Tbilisi-Ceyhan pipeline which has a satisfactory capacity, and it is easy to increase its carrying capacity. There is the Baku-Supsa pipeline which Kazakhstan may use in addition to the Baku-Tbilisi-Ceyhan. We are realizing a railway project which connects Azerbaijan, Georgia and Turkey (Baku-Tbilisi-Kars). All these are alternatives and our target is to create alternatives. We do not say, transport only via Azerbaijan and we do not create competition, but alternatives.
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