Analysis Materials 28 December 2005 12:05

Last week the Azerbaijani Ministry of Finances completed work over distribution of fees in the public-political and international financial organizations (IFO)‚ the payments where will be implemented in 2006. The proposals have been submitted the Cabinet of Ministers for further adoption.

Azerbaijan is active participant of different integration unions and alliances. Azerbaijan’s participation in the international organizations costs from $6bn to $8bn a year, which approved from the public budget. It makes up less than $1 per capita. In exchange the country has growing position in the international arena and strategically important world bodies. Major part of the funds is directed at payment of membership fees. The sum of payment varies depending on the charter of the organizations and status of the organization in any of the integrated organization. Azerbaijan holds membership in 50 organizations.

According to the Ministry of Finances, our of a total of 8.4m new manats put in the 2006 public budget expenses 4.6m manats fall on IFOs‚ 3.1m manats вЂ" on public organizations. 0.6m manats was put as reserves. The success of their fulfillment will depend on the level of revenues of the public budget.

Azerbaijan’s biggest debt is owed to the Black Sea Bank for Trade and Development (BBTD), which comprises 1.3m new manats. The repayment of the sum will put an end to Azerbaijan’s subscription to the bank’s shares.

Taking into consideration the country’s debts to the EBRD on membership fees, in 2006 it is planned to settle part of them and 1.1m manats has been allotted in is respect. Azerbaijan will pay in 2006 225,000 manats for membership at the International Monetary Fund (IMF), while the World Bank вЂ" 900,000 manats.

The situation with the Asian Development Bank (ADB) is a bit different. The debts to the ADB reduced and in 2006 a total of 270,000 manats was approved in this respect. The payments to the Islamic Development Bank (IDB) comprise 90,000 manats.

The amount of payments in fees the public-political organizations are as follows: the Council of Europe вЂ" 760,000 new manats, 400,000 manats вЂ" CIS taken together with its bodies, the Islamic Conference Organization вЂ" 350,000 manats‚ 160,000 manats - UN, 120,000 вЂ" OSCE‚ 190,000 manats - UNIDO‚ 120,000 manats вЂ" the World Health Organization (WHO)‚ 80,000 manats вЂ" UNESCO.

The active financial participation of Azerbaijan in the international organizations defines the scale of its right of vote. For instance, the contribution of the member-countries to the UN is calculated on the base of gross national incomes of the country with consideration of foreign debts and amendments to community incomes.

The scale of fees is based on the principle of solvency. If the economy of a concrete country develops successfully, the amount of fees to the UN budget also grows. The Charter of the organization envisages payment of membership fees early in the year

Azerbaijan has become a model for many developed countries of the world and is one of the more disciplined members of the UN. During the 59th session of the UN General Assembly it was announced that as of 30 April 2005 only 18 member-states fully paid the fees and further participated in the peacekeeping operations. Azerbaijan was an only CIS country among them.

Azerbaijan’s major diplomatic efforts at UN are concentrated on the search of methods for the resolution of the Armenian-Azerbaijan conflict. Four resolutions of the (822, 853, 874, 884) of the UN Security Council requiring urgent repatriation of Azerbaijani refugees to their native lands which are under Armenian occupation. The 38th session of the UN Commission on women adopted a resolution, demanding the release of all women POWs captivated during the armed conflict.

Azerbaijan, excluding some fact facts, successfully copes with the timely payment of fees to different international organizations thanks to its state of budget well shaped due to high oil prices. According to the Ministry of Finances, in January to September Azerbaijan paid 19,975bn manats in membership fees ($4.34m) to the international organizations. 35.2% (7,023bn manats) of them was transferred to the international financial organizations вЂ" the European Union for Reconstruction and Development (EBRD), the Asian Development Bank, the Islamic Bank for Development, 64.8% (12,952bn manats) вЂ" to the Council of Europe, the OSCE, WTO, WHO, OIC, UNESCO and UNICEF.

As to overdue debts for membership fees the international organizations, the Finances Ministry continues work over definition of the sum of overdue debts. Thus, in compliance with the agreement achieved with the International Labor Organization, terms of repayment was prolonged for 20 years till 2025. Initially the debts were repaid in the following order: 35,000 Swiss franks in the first year and then 250,000 franks. Annual membership comprise 18,000 Swiss franks.

The country with the debts on membership fees can face who a problem of loss of a right of vote at representation in this organization. This, Azerbaijan was deprived of a right of vote at the WHO for non-payment of fees to the organization for a long time. The payment of membership fees to the organization was set up last summer at the president’s initiative in the amount of $3m. It enabled the country restore its right of vote.

Moreover, Azerbaijan owes to the World Tourist Organization (WTO). The fees to the WTO are determined on the statistics of in-going tourist and public budget revenues from this sector. If in 2004 the numbers of tourists, coming in Azerbaijan comprise 1.350m, in 2005 the figure reached roughly 1.5 million people and respectively, the size of the fee should coincide to the statistics. The membership fees of Azerbaijan made up $18,000 in 2005. The budget of the organization exceeds 10m euro. The WTO unites 140 countries, 7 territories and around 350 affiliated members, representing regional department on tourism, trade associations, education institutions and private companies, including the airlines, network of hotels and tourist operators.

The world community is quite right considering that the membership fees differ taking into consideration the potential of every country entering the organization. The member-countries possess equal rights of vote, while high membership fees pre-define the apportionment of forces in a definite organization. Thus, the OSCE receives major part of financial flows from France, Germany, Italy, and the UK вЂ" each 9.1% of the OSCE budget.

At present Azerbaijan is in talks on entrance to the WTO with a hope to improve the investment climate in the country and attraction of foreign investments for the upgrade of the private sector. Like all international organizations, the WTO also acts on the base of membership fees. Annual budget of the organization in the amount of approximately $100m is formed on the base of membership fees, the size of which depends on country’s share in the world trade. Azerbaijan will have to pay to WTO $30,000 a year after entrance to the WTO.

However, it does not fear Azerbaijan at all, as it is very important for Azerbaijan today to participate in all economic structures, which promote improvement of the situation in the country and economic integration with the world countries.