Major part of the funds of the State Oil Fund of Azerbaijan (SOFAZ), directed at the implementation of projects in the country, is used for resolution of problems of the refugees and internally displaced peoples, the Samir Sharifov the Executive Director of the State Oil Fund of Azerbaijan, said during his visit to Alaska St. of the Unites States on 10-14 July.
The visit targets familiarity with the work of the structural divisions of the Permanent Fund of Alaska. Established in 1976, the Permanent Fund of Alaska serves as a reserve for current and future generations. The major capita is distributed among residents and cannot be spent on other purposes without injecting changes in the Constitution of the State with simple majority of votes in the referendum. The SOFAZ, however, is fully under disposal of the President and in compliance with the Charter of the Fund the resources are allocated for human development and development of non-oil sector of the country. Oil incomes in the countries are directed at the implementation of projects on assistance to refugees, financing the country’s stake in the construction of the Baku-Tbilisi-Ceyhan main export oil pipeline, transfers to the public budget, as well as payment of services of foreign managers involved in managing the SOFAZ funds.
Thus, since the implementation of remittances to the State Fund for Social Development of Refugees and IDPs in compliance with the relevant presidential decree dated 2001 the SOFAZ has remitted 463bn manats, or $96m to cover needs of refugees and internally displaced people. The funds were directed at the construction of 6,411 houses for refugees and IDPs, while the construction of 2522 houses more is nearing to completion. Thus, 5 of 12 refugees camps have been already liquidated, while 3 camps more will be liquidated early 2006. However, it is necessary to establish an infrastructure for the new settlements, as they are located too far from the old settlements. Thus, the SOFAZ needs additional funds to establish elementary living conditions for residents of the new settlements.
In accordance with the SOFAZ budget in 2005 it is planned to direct 202bn manats or $43m at the improvement of social conditions of refugees and IDPs. However, even in mid-2005 the State Committee on refugees and IDPs appealed to the SOFAZ with request to increase the funds spent on the construction of settlements for refugees and IDPs by 100bn manats. Sharifov, however, does not rue out that the sum can be a bit exaggerated, as there are many cases of misappropriation. Besides, big funds allocated for such noble purpose accumulate in the pockets of some crooks through exaggeration of prices of construction materials or their quantity, the people participating the construction of the houses for refugees told on condition of anonymity. It is necessary to note here the strengthening of a control over equal use of oil revenues belonging to the Azerbaijani people.
If to share the funds accumulated at the SOFAZ as of end June 2005 ($1,085bn) among the Azerbaijani population of 8 million it will make only $129 per capita.
Late 2001 вЂ" early 2002 the desperate refugees regularly closed off the roads and demanded the authorities to improve their living conditions. Then ex-President Ilham Aliyev issued three decrees, stipulating the allocation of 359bn manats (around $73m) for the improvement of living conditions of refugees and IDPs. The houses built for IDPs are the state property, as after the liberation of occupied territory the residents of the houses will be repatriated to their native lands.
The SOFAZ always acted beyond the pressures of the IMF to implement the presidential decrees. Recommending the establishment of the State Oil Fund in the country in 1999 the IMF demanded to maintain oil dollars for future generations. The actions by the authorities which directed the funds at the construction of refugee towns excited critics in the IMF, which strictly called on avoiding the use of funds for financing the political actions. For instance the implementation of the IMF-funded State Program on Poverty Reduction and Gross Facility. IMF demanded from the government to take out the State Oil Fund from the President’s control and subordinate it to the parliament to ensure more transparent use of oil revenues, non-use for refugees, or commercial purposes, including the BTC.
Most local experts agree with the IMF, who urge that use of funds for improvement of the state of refugees means waste of funds. They stressed the necessity of directing the funds at the development of entrepreneurship, establishment of business bodies, and improvement of infrastructure. It will enable to additional profits in 2-3 years, which further could be spent on covering the need of the poor. However, it would be also more expedient to direct the funds at the opening of new jobs for refugees. The refugees are the category of people referred as poor, while struggle with the poverty is the priority of the government.
The SOFAZ explains its position with the fact that transfers to the public budget are directed at the development of infrastructure projects targeting the coverage of the interests of future generations. The government guides the resolution of more priority problems which are of tremendous significance for their further development.