Azerbaijan, Baku, Nov. 2 / Trend A.Akhundov /
Azerbaijan has achieved great success in fulfilling its obligations on the Initiative Extractive Industries Transparency (EITI), the ambassador of Norway to Azerbaijan Erling Skjonsberg stated.
"In terms of fulfilling EITI obligations, Azerbaijan is ahead of many countries, including Norway," the ambassador said in his speech in Baku, at a seminar on problems of sustainable development in oil rich countries.
According to him, such countries are faced with four major challenges in oil and gas consumption.
"The first is the threat of the volatility of the economy, the second the possibility of 'Dutch disease', the third covers investments in the non-oil sector and lastly effective use of oil revenues. Assuming that the economy will grow in leaps and bounds, it can lead to failure.
As for the 'Dutch disease', it can cause over-investment in oil revenues of the country which in turn leads to higher inflation and increased economic dependence on the oil sector. When it comes to the third challenge, if the countries with large oil and gas revenues forget about the importance of the non-oil sector, it will eventually lead to serious problems, "Skjonsberg said.
According to him, currently 22 per cent of GDP and 40 per cent of exports account for the Norwegian oil sector.