Weekly actual topics in Azerbaijan (nov. 21-26)

Professionalism of Azerbaijani banks wins over customers

The bank system of Azerbaijan faces a difficult task in becoming the key component issuing credit to the economy and being the catalyst for the growth of the non-oil sector development.

Market competition has long demanded that Azerbaijani banks should expand the list of services they offer and improve their technology. Many of them are successful in carrying out leasing operations and issue mortgage credits and credits to consumers.

In an effort to keep the level of incomes relevant to credit activity, banks increased the volume of credits to production, trade and services and have intensified efforts to assist retail business.

According to the Central Bank of Azerbaijan (CBA), that of the total credit investments in the Azerbaijani economy during first nine months of this year, 29.8 per cent went to trade and services, 7.6 per cent to construction and real estates, 5.8 per cent to industrial production, 4.8 per cent to agriculture and refining; 4.4 per cent to transport and communications and 3.1 per cent to power engineering, chemistry and natural resources development. The dominant 32.5 per cent or 3146.2 million manat were assigned in loans to households.

The bank retail business has been growing rapidly as part of the development of the network of bank branches, exploration of new credit products and the increase of competition in the deposit market. The latter has become possible thanks to a growth of trust in banks from the consumer which as a result is helping the volume of Azerbaijani citizens' bank deposits to keep growing.

The CBA reports that customers' deposits to banks in Azerbaijan totalled 3622.4 million manat on October 1, 2011, an increase of 29.4 per cent against 2798.3 million manat on the respective date last year. People's trust in banks grew substantially after the law 'On Insurance of Bank Deposits' took effect.

In addition, banks tightened competition in the market of high-tech services such as plastic cards and immediate money transfer systems. This contributed essentially to development of such operations and, on top of that, caused technical modernisation and enhancement of all fields of banks' operations such as new technology, software and naturally, a logistics base.
The CBA continues to raise the improvement ceilings for local banks. It is not going to offer new minimum capital requirements but, works to promote further capitalisation of banks.

The capitalisation of the Azerbaijani bank sector reached to 2345 million manat on October 1, 2011, up 0.7 per cent and 8.1 per cent from September 1, 2011 and the beginning of the year, respectively.

As the CBA reported, the number of banks with capital exceeding 10 million manat reached to 42 following the results of September, an increase of one bank against August, but did not change compared to the end of 2010. The share of this category of banks in the consolidated bank capital was 99.4 per cent following the results of September versus 98.9 per cent in August and in the beginning of the year.

In September 2011, the number of Azerbaijani banks operating with profit was 32, up one from August and two from the respective month of 2010.

Following the results of September, total profit of the banking system reached 128.71 million manat, up 7.1 per cent from August, but down 4.5 per cent from the respective month of last year.

The growing economy of Azerbaijan produces corresponding needs and requires rapid development of retail operations and consolidation of bank capital to meet demand, so credit institutions as well as businesses can react to these requirements adequately and professionally.

What disturbs Azerbaijan on its path toward full financial transparency?

The problem of effective control of state expenditures has always been urgent for independent Azerbaijan. International organizations, since they came to the country, staked basically at the strengthening of institutional bases, revision of old legal provisions and adoption of new ones. It has to be recalled that the IMF from the very beginning expressed its deep concern over Government's rather "impudent treatment" of revenues accumulated at the State Oil Fund of Azerbaijan (SOFAZ). As then viewed by the IMF, oil export revenues should have served as a wealth for the next generations and never be spent for refugees and infrastructural businesses.

However, firmness of the Government, which thought problems of refugees were of paramount importance and so was the construction of oil pipeline Baku-Tbilisi-Ceyhan, led to that the IMF refused to assign another loan to Azerbaijan for struggle with poverty. Compromise was found after the IMF in a rather strict form demanded from the Government that the state budget should be inclusive of all expenditures of non-budgetary funds, including the SOFAZ.

The time when the Azerbaijani Government had to do something upon dictation of international organizations is now left behind. Certainly, following the inflow of oil export revenues to the country, the problem of state finances has become principally important for the community so the Government makes particular efforts to provide enough transparency in this issue.

An illustrative example is the annual growth of state budget and SOFAZ budget. The assets of the SOFAZ increased by 41.6 per cent against $22,766.8 million in the beginning of the year to $32,242.5 million on October 1, 2011. The assets of the SOFAZ, at the date of its establishment, were equivalent to $271 million.

Azerbaijan's state budget-2012 revenues and expenditures are forecasted as 16,436.4 million manat and 16,984.4 million manat, respectively. For comparison: state budget-2003 revenues and expenditures were equivalent to 1,226 million manat and 1,234 million manat, correspondingly.

At the moment, large-scale revenues really need to be controlled in a reliable way.

Having joined the Extractive Industry Transparency Initiative (EITI) in 2003, Azerbaijan made a big step toward the reputation of transparent country. Increase of the level of transparency and awareness of oil export revenues will allow citizens and organizations to control Government's actions. This will complicate abuses and use of money for purposes not relating to the provision of sustained development. As supposed, companies will only win from more equal economic relations, more predictable conditions of economic activity, and possibility of a more efficient provision of energy security. Inter alia, today, not all oil and gas companies operating in Azerbaijan issue their reports separately as they consider it a commercial secret, disclosure of which would violate contractual terms.

In 2009, the Central Bank of Azerbaijan established a Financial Monitoring Service, which is the central body in the field of struggle with the financing of terrorism and money laundering. The Service this year has become the full member of Egmont Group, an organization resembling Interpol but specialized in the field of financial relations. Egmont Group has established its news center under the name of "Egmont Security Network". Some 60 countries-members of the organization exchange information of suspicious financial operations and ways of legalization of criminal incomes, and counteract jointly their across-the-border trafficking. In October 2011, the Financial Monitoring Service received 21,398 data relating to suspicious and current operations.

A more important aspect of evolution of financial control system is bill entitled "On State Financial Control", which has not yet become the law. It is essential to pass this law to increase transparency of the system of state budget forecasting and performance, and tighten control of budgetary spending. Second, the bill specifies issues of state financial regulation and a stricter division of powers amongst state financial control bodies.

As is known, financial control in Azerbaijan is currently subdivided into internal control and external control with the Finance Ministry and the Accounting Chamber, an independent state financial control body, responsible for them, respectively. Their key task at the moment is to improve the efficiency of state financial control actions and avoid unnecessary dubbing of financial-control activities.

Worthy of a note is the operation of the Azerbaijani Accounting Chamber, which, as an independent financial control body, is specialized solely in checkup of state expenditures. The Chamber submits its annual report to the Parliament traditionally in May. As viewed by foreign consultants, the very practice of Chamber's report examination in the Parliament is legally not irreproachable and is not complied with the Rome Declaration's provisions on independency of high state audit body.

Efficient financial control of state expenditures is the most important factor of strengthening of public trust in state power, and consolidates power and the society in achievement of the common goal: the provision of wealth of citizens and stability of state power.

Caspian gas: Bulgaria first

Europeans better agree with its Eastern partners on a bilateral basis than on behalf of the whole EU. The example is Bulgaria, which really, as Bulgarian President Georgy Pyrvanov reported, showed Europe how it is possible to deal with Azerbaijan.

Following the results of Bulgarian President's visit to Baku on November 14-15, the sides actually completed transaction envisioning annual sale of 1 billion cubic meters of gas from Azerbaijan to Bulgaria by 2015, the supposed completion date of Greece-Bulgaria Interconnector. Other news was released several days later. Bulgarian news agencies reported that the Energy Ministers of Bulgaria and Turkey, at a recent meeting, signed a political agreement, which envisions construction of a 77-kilometer across-the-border gas pipeline with the annual throughput capacity of 1 billion to 3 billion cubic meters that can subsequently be doubled in future. The sides underscored the project's strategic importance for the two sides. In a report, the Energy Ministry of Bulgaria said this gas pipeline, along with the Greece-Bulgaria Interconnector and compressed natural gas supply to a gas terminal near Varna, Bulgaria, will pave the way for Caspian gas to Bulgaria and all neighboring countries. The new gas pipeline, which requires comparatively insignificant investments, will benefit greatly Bulgaria and the whole region, the Ministry reported.

Thus, Bulgaria, after having agreed with Azerbaijan and Turkey, probably will become the first European country to receive Azerbaijani gas directly before the Shah Deniz Phase 2 is over.

According to Western news reports, Energy Ministers of a series of Central and Eastern European countries, at a meeting in Brussels yesterday, should have signed a Plan of Actions on the North-South Gas Corridor at the sidelines of the European Commission-adopted investment plan of improvement of the EU transport and energy infrastructure. The document will specify gas projects to become a priority under the new Trans-European Energy Program valued at 9.1 billion euro. A group of experts led by EU Energy Commissar Gunther Oettinger made a special report on this occasion.

Officials of Bulgaria, the Czech Republic, Hungary, Poland, Romania and Slovakia think the priority gas import routes are gas pipeline Nabucco and Interconnectors Turkey-Bulgaria, Greece-Bulgaria, Greece-Italy, and Italy-Albania. There are also other priority projects, particularly, a new Interconnector leading from the Czech Republic to the Baumgarten gas station in Austria, gas terminal in Romania's Constanta, etc.

They are the very "missing links" in EU general gas infrastructure mentioned by European Commission Chief Jose Manuel Barroso, who announced that the European Commission adopted a 50 billion euro investment plan of improvement of transport and energy infrastructure.

Europeans understand that they need to refurbish and link together their internal gas infrastructure by a time when the South Gas Corridor is put into full operation.

Austria interested in further promoting economic co-op with Turkmenistan
Austria interested in further promoting economic co-op with Turkmenistan
Turkmenistan plans to increase natural gas supplies to China
Turkmenistan plans to increase natural gas supplies to China
Assessment of Turkmenistan's hydrocarbon resources published
Assessment of Turkmenistan's hydrocarbon resources published
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Azerbaijan increases tea imports from Georgia
VTB Bank Kazakhstan's parent bank expected to facilitate bank's growth plans for 2020-2021
Azerbaijan appeals to UNICEF regarding Armenia's terror against Barda's civilians
Facebook gains court backing in document row with EU regulators
Commissioning of desalination plant in Kazakhstan's semi-desert zone postponed
Number of debit cards in Azerbaijan continues to grow
Georgia reduces imports of construction materials from Azerbaijan
Azerbaijan reduces import of cigarettes from Georgia
Residents of Barda fully confident in Azerbaijani army - Executive authority
Georgia increases oil import from Azerbaijan
Azerbaijan reveals details of casualties, injuries in Tartar inflicted by Armenian troops
Electricity production using renewable energy sources increases in Kazakhstan
Azerbaijan increases import of passenger cars from Georgia
Kazakhstan decreases imports from Austria
Precious metal prices in Azerbaijan down
Austria interested in further promoting economic co-op with Turkmenistan
People like Vladimir Yevseev call on Armenia to commit war crimes - Israeli expert
Ronaldinho films video message in support of Azerbaijan
Missile-hit area of Azerbaijan's Barda city targeted purposefully - Executive Office
Armenian military-political leadership to be punished soon – Azerbaijani prosecutor general
Kazakhstan, Spain trade down nearly threefold amid COVID-19
Bashkortostan boosts fuel export to Uzbekistan
President Ilham Aliyev calls President Recep Tayyip Erdogan
Azerbaijan confirms 483 more COVID-19 recoveries
Small industrial zone to be created in Uzbekistan’s Tashkent
First Vice-President Mehriban Aliyeva congratulates brotherly people of Turkey on 29 October-Republic Day
Kazakhstan, Austria agree on Action Plan of Kazakhstan-Austrian Business Council for 2021
Armenian leadership shelled Tartar ignoring visit of diplomats - President's aide
Azerbaijani currency rates for Oct. 29
China's premium car buyers drive VW back to profit
Iran reveals its COVID-19 data for October 29
Kraft Heinz third-quarter sales beat estimates
Bahar Azadi gold coin price again rising in Iran
Georgia has record high grape harvest in past 30 years
Int'l journalist sends Letter to Joe Biden in regards to his statement on Karabakh
Armenia shells Goygol district, fire breaks out in forest - Ministry of Emergency Situations
Joint technical committee to be set up related to Khudafarin & Giz Galasi hydro junctions
ADB approves loan to support Georgia’s economic recovery
Azerbaijan's Nakhchivan increases value of its agricultural production
Turkmenistan plans to increase natural gas supplies to China
Armenian servicemen, who fire at civilians in Azerbaijan’s Barda, killed on battlefield (VIDEO)
Azerbaijan shoots down two Su-25 of Armenia – Defense ministry
Aircraft of Azerbaijani Armed Forces not involved in today's battles - Defense Ministry
Turkish Airlines to launch multiple charter flights to Georgia
Georgia's economic growth rate to up
Armenia used cluster bombs prohibited by all int'l conventions to attack civilians in Barda - Assistant to First Vice President of Azerbaijan
Azerbaijan’s all Smerch multiple rocket launchers fully operational – Defense ministry
Azerbaijan's Zangilan city liberated not long before 27-year anniversary of its occupation
Azerbaijan hands over bodies of soldiers, captured civilians to Armenia - president's aide
Azerbaijan bombing maternity hospital in Nagorno-Karabakh's Khankendi - fake
Top Iranian cleric condemns Armenia killing innocents in Azerbaijan's Barda city
Azerbaijan to become regional leader in energy efficiency - EU4Energy manager
Assessment of Turkmenistan's hydrocarbon resources published
Barda is beautiful and strong with reinforced determination - top official
Azerbaijani MPs to observe parliamentary elections in Georgia
Georgian vegetable oil company Qarva expanding its business
Assistant to Azerbaijani president, foreign diplomats visit Tartar
Kazakh-Chinese bitumen plant opens tender to buy electric materials
Neighboring countries increase demand to buy subsidized Iranian products
IFRC president makes statement on death of volunteer following Armenia's Barda shelling
Azerbaijan gives update on civil casualties, damages, following Armenia's attacks
Eni’s capex almost halves year-on-year
Criminal case opened on fact of Armenia's missile attack on Azerbaijan's Barda
Destroying historical monuments in Karabakh - against cultural identity of Azerbaijanis
Azerbaijani prosecutor general discloses number of victims of Armenian terror
OSCE MG either unable or uwilling to solve Karabakh conflict - Erdogan
IFRC Europe Office makes statement on Azerbaijani volunteer killed as result of Armenian shelling
Launch process for water and electricity facilities in Iran continues
Azerbaijani Armed Forces driving away Armenian troops like dogs – Assistant to president
Armenian Armed Forces cowardly flee from battlefield – Assistant to Azerbaijani president
Kazakhstan’s Intergas Central Asia opens tender for equipment maintenance
Generation capacity Iran's power plants grows
Armenia hostile to entire Islamic world, says Algerian analyst
LUKOIL optimistic about prospects for co-op with Turkmenistan
Heavily injured in Armenia's attack on Azerbaijan's Barda, brought to Baku
Azerbaijani FM’s visit to Geneva postponed
Foreign diplomats arrive in Barda, which is still under fire by Armenian troops (VIDEO)
Azerbaijan condemns publication of Charlie Hebdo about Turkish president - Assistant to Azerbaijani president
Azerbaijani oil prices decrease
New refrigeration facility for food opens in Georgia's Kakheti region
To liberate occupied lands, Azerbaijani Army striking military targets, but without harming civilians - MoD
Eni increases natural gas production at its Kazakhstan-based fields
Winter wheat planting completed in Turkmenistan’s Akhal region
Armenian leadership to be held accountable - Prosecutor General (PHOTO)
Loans to entrepreneurs increased in Azerbaijan's Nakhchivan
ANAMA reveals details of Armenian attacks on Azerbaijan's Barda
Central Banks of Iran announces volume of foreign currency put up for sale
Assistant to Azerbaijani President arrives in Barda, Tartar together with diplomatic corps (PHOTO)
Foreign exchange reserves of Azerbaijan's CB increase
Ambassador of France in Azerbaijan makes statement on Armenian missile attack on Barda
Industrial production increased in Azerbaijan's Nakhchivan Autonomous Republic
Certain facilities launched in Iran’s water and electricity sectors
Belarusian airlines announces another suspension of flights to Turkmenistan
New York Times prepares article covering Armenian missile attack on Azerbaijani Barda
Eni lowers oil&gas output amid COVID-19, OPEC+ commitments
Azerbaijani General Prosecutor's Office assessing damage in liberated territories
Iran to boosts gas production
Armenia grew narcotic plants in occupied Azerbaijani territories - Ecology Ministry
Debris of missiles fired at Azerbaijani Barda (PHOTO)
Targeting innocent civilians shows that Armenia prefers cruel, hideous methods of warfare - Azerbaijani embassy in US
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