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Weekly economic review

Analysis Materials 22 January 2008 12:02 (UTC +04:00)

The uncoordinated problem of Azerbaijan's debt to Turkmenistan, which has been lasting for 15 years, finally received a boost for settlement. Thus, last week the Governments of Azerbaijan and Turkmenistan have agreed to develop an agreement on the adjustment of the debts that appeared in 1991-92 due to the purchase of Turkmen gas.

The decision to develop an agreement was made, within the framework of the first meeting of the Azerbaijan-Turkmenistan Inter-Government Commission on the Economic and Humanitarian Cooperation that was held on 17 January in Ashgabat, the Cabinet of Ministers of Azerbaijan said.

The decision to develop an agreement was made, within the framework of the first meeting of the Azerbaijan-Turkmenistan Inter-Government Commission on the Economic and Humanitarian Cooperation that was held on 17 January in Ashgabat.

The legal basis for the adjustment of the debt to Turkmenistan is expected to be signed till the end of May, so as to sign it in the course of year.

" Azerbaijan is ready to entirely adjust the debt in cash till the end of 2008, since it is impossible to agree on the goods exchange in the existing conditions (many public industries are privatized)," the source in the Government said.

The representatives of the Ministry of Finance and the National Bank of Azerbaijan will determine the amount of the debt in the process of the development of the agreement, since the sides have not reached to any agreement on this issue. However, the Commission has reached an agreement in determining the sum.

The official Baku considers that Azerbaijan's debt for the purchase of the Turkmenistani gas was USA $18 bln., however Turkmenistan insists on USA $56 bln.- taking into consideration the interest of the payments.

Turkmenistan also does not take into consideration the goods sent from Azerbaijan in the 1990th in exchange of the purchased gas, as they were lost on the way. The Official Baku considers that Azerbaijan does not hold the responsibility for the losses.

It is not secret that paying off disputable $40mln (difference between versions) dose not present large difficulties for Azerbaijan. The Country is successfully realizing large-scale oil projects, and the favorable external economic conjuncture brings to the increase of the gold reserves. Simply the Government of Azerbaijan understands that the economic relations between the two countries are entirely comprised of agonizing process of talks and assertion of positions.

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