30 July 2004
The Azerbaijan Country Updates provide information about recent developments, decisions, civil society concerns and recommendations related to Multilateral Development Bank (MDB) involvement in Azerbaijan including that of the World Bank (WB), International Finance Corporation (IFC), European Bank for Reconstruction and Development (EBRD) and Asian Development Bank (ADB). The updates are emailed to a list of individuals and civil society organizations in Azerbaijan and abroad who are interested in monitoring MDB investment and project impacts in the country. If you would like to be included or removed from the list, please email the moderator, Heike Mainhardt-Gibbs at . Correspondence with BIC may be conducted in Russian.
The Bank Information Center (BIC) is an independent, non-profit, non-governmental organization that aims to empower citizens in developing countries to influence World Bank and other Multilateral Development Bank (MDB) activities in a manner that fosters social justice and ecological sustainability. BIC advocates for greater citizen participation, transparency, and public accountability. For more information about BIC, see www.bicusa.org
Recent News and Developments
IMF insists Azerbaijan should raise fuel prices
Interfax news reports that the IMF insists that Azerbaijan raise fuel prices to align domestic fuel prices with world market prices in order to increase tax revenue. However, the Head of Economic Legislation in the Azerbaijani parliament believes that such a raise would create problems for Azerbaijanis. The Azerbaijani government agreed that it would consider adjustments to domestic prices when world market prices change by 20 percent based on quarterly reports. (Interfax, 10.03.2004, http://www.interfax.com)
EBRD announces participation in Extractive Industries Transparency Initiative (EITI)
In a public announcement on 11 March 2004, the EBRD stated they “will actively participate in the work of the EITI and will encourage adoption of the EITI principles in its countries of operation and by its corporate partners.” The EITI is an initiative launched by UK Prime Minister, Tony Blair, with the objective of increasing transparency over payments and revenues in the extractive industries on a voluntary, country-by-country basis. Click on the EBRD statement if you would like to read it. Azerbaijan joined the EITI on 17 June 2003. On 13 May 2004, the Open Society Institute (OSI) will host a meeting on Azerbaijan’s commitment to the EITI for interested NGOs. For registration and more information go to http://www.osi-az.org/indexen.asp or contact OSI at telephone 98-69-10 (Baku) or
Azerbaijan invites EBRD to buy into more banks
Azerbaijan’s government has invited EBRD to buy shares in Universal Joint Stock Bank, the country’s second biggest state-run bank, and other banks. Currently, EBRD is finalizing the purchase of 20 percent of the state-owned International Bank of Azerbaijan. (Interfax, 28.04.2004, http://www.interfax.com)
WB findings on business-related corruption in Eastern Europe and Central Asia
A World Bank new report, titled “Anticorruption in Transition 2: Corruption in Enterprise-State Interactions in Europe and Central Asia 1999-2002,” analyzes corruption trends in business-government interactions in 26 economies of the region. The study claims that the magnitude and impact of corruption on business may be declining. The World Bank and the EBRD co-sponsored the survey of 6,500 firms for this report. To read more, click on the report title above.
Civil Society Activities
BTC among issues highlighted by NGOs at EBRD Annual General Meetings (AGM)
European, Central Asian, and US NGOs held several meetings with EBRD department staff, country directors, and President Lemierre during the EBRD AGM in London, 18 – 19 April. The main issues pressed by NGOs included: 1. Human rights – support for EBRD’s continued implementation of human rights benchmarks in Uzbekistan and request for broader application in Central Asian countries; 2. Energy – leading role by EBRD in implementing the WB EIR recommendations and renewable energy targets for the updated Energy Policy; 3. BTC pipeline – human (oil workers’) rights violations, corruption (SOCAR), and mismanagement of the Azerbaijan Oil Fund; 4. Sakhalin II – human rights violations, endangered gray whales, pollution, and local roads destruction; and 5. K2R4 nuclear reactors – concerns over safety standards and antidemocratic processes. In addition, the EBRD announced that the BTC monitoring group report would be released during the first half of May.
Civil Society Meets with World Bank President on Extractive Industries Review (EIR)
On 22 April, World Bank President Wolfensohn held a meeting to discuss the EIR with a group of international civil society organizations that had gathered in Washington, DC for the World Bank Spring Meetings. Civil society was represented by organizations from Kazakhstan, Kyrgyz Republic, Nigeria, Peru, Bolivia, the Philippines, Germany, Italy, United Kingdom, Netherlands, and the US. Executive Vice President of the IFC, Peter Woicke, as well as other senior Bank management also participated in the discussion. Civil society representatives focused on the issues of governance, revenue transparency, human rights, renewables, and free, prior informed consent (FPIC). President Wolfensohn agreed on the importance of these issues and gave explicit support for recognizing the right to free and prior informed consent of affected communities and the establishment of “no-go” areas. Whether the Bank will make any meaningful commitments is still unclear. Wolfensohn said that the World Bank Group was willing to continue dialogue with civil society to formulate specific proposals that could be used in the Bank’s response to the EIR expected sometime in July. For more information on civil society activities around the EIR contact Andrea Durbin ().
Open Society Institute to co-ordinate NGOs monitoring BTC
On 22 April the Open Society Institute (OSI) signed an agreement with BP to co-ordinate local NGOs in Azerbaijan monitoring the BTC pipeline. NGO monitoring will focus on environment, social problems (particularly labor and land rights), conservation of historical monuments, and use of local resources. Local NGOs have until 4 May to register as participants. For registration and more information go to http://www.osi-az.org/indexen.asp or contact OSI at telephone 98-69-10 (Baku) or
MDB Project Activities
EBRD Board approves SOCAR – South Caucasus Gas Pipeline and affirms Shah Deniz gas field
On 9 March the EBRD Board of Directors approved the SOCAR – South Caucasus Gas Pipeline (SCP) project for US $60 million. Once the agreement is signed, the project will provide financing to the State Oil Company of Azerbaijan (SOCAR) for expenditures on the gas pipeline construction, which is being built to export gas produced from the Shah Deniz gas field. SCP will follow the BTC pipeline route through Azerbaijan, Georgia, and Turkey. For more information, read the EBRD Project Summary Document and the Environmental Impact Assessment. In addition, Interfax reports that the EBRD Board has given “preliminary” approval for a US $170 million credit to SOCAR to finance its share in Phase 1 of the Shah Deniz gas field development. (Interfax, 13.04.2004, http://www.interfax.com)
EBRD loan for Azeri real estate sector development
Neptune Ltd and Lybra Ltd, owners and operators of Landmark I and II commercial office buildings near Baku, received a $10.2 million loan from the EBRD. The purpose of the loan is to help companies reorganize their existing debt and obtain long-term financing otherwise unavailable in Azerbaijan’s property sector. Click on this press release to see the full version on the EBRD website.
EBRD Procurement Notice: Reconstruction of the Gazi Mammed to Kyudamir Road
The Bank has opened pre-qualification and tendering for contracts to firms and joint ventures of firms from any country. The pre-qualification documents have been available since 26 April. For more information regarding this notice please click on the link.
EBRD’s new program to overcome poverty in seven poorest countries of operation
The EBRD will increase its investment in Azerbaijan, Armenia, Georgia, the Kyrgyz Republic, Moldova, Tajikistan and Uzbekistan if donor countries agree to raise the amount of grant funding for use in these ‘Early Transition Countries’ (ETCs). Emphasis in the Bank’s ETC initiative is on private-sector investment, particularly banking services for micro, small and medium-sized businesses, and public services such as transport, power, heating and waterworks. For more information, click on ETC initiative above.
WB Poverty Reduction Support Credit (PRSC)
On 1 March the WB released the Project Information Document (PID) for a proposed US $20 million PRSC in support of the Azerbaijan government’s State Program for Poverty Reduction and Economic Development (SPPRED). The PRSC is slated to go to the Board on 10 June. To read the document, please click on PID.
WB releases PID and environmental management plan for Rural Investment Project
The Bank has released the Project Information Document (PID) and environmental management plan for the Azerbaijan Rural Investment Project. The management plan outlines mitigating measures to be adopted for possible impacts associated with various micro projects such as rural roads, irrigation systems, slaughterhouses, water supply, and vegetable processing plants. For more information, please click on the document titles above.
New WB Project Information Documents and scheduled Board approval dates
New Project Information Documents (PID) are now available for the Pension and Social Assistance Project, Board date 27 May; the Market Services Development Project, Board date 27 May; and the Power Transmission Project, Board date 3 June. To read the PIDs, please click on the project titles above.
WB implementation reports for Institution Building and Gas System Rehabilitation
The Implementation Completion Reports assessing the outcomes of the Institution Building Technical Assistance and the Gas System Rehabilitation Project are now available on the Bank’s website. To read them, just click on the project titles above.
MDB Consultations and Policy Updates
World Bank releases draft adjustment lending policy for public comment
Three years ago the WB began a process to revise its policy governing structural adjustment lending. Between June 2002 and January 2003, the Bank held regional consultations based on an ‘Issues Paper’ that mapped out the general content of the policy revision. On 1 April 2004, the WB released the draft structural adjustment lending policy and is accepting public comments until 30 June 2004. NGOs that wish to participate in a video-conference on the new policy should contact Stefan Koeberle (). International NGOs met with Bank staff during the WB Spring Meetings (21 April) in Washington to express concern over the draft policy. To begin, the draft policy ignores a direct recommendation of the Extractive Industries Review regarding social and environmental assessment requirements. Other areas of concern include lack of guidance on forest impacts and public participation. To view the draft policy and the Issues paper (in Russian), click on the Adjustment Policy Revision or contact Heike Mainhardt-Gibbs (). Please see BIC’s write-up on the draft policy at www.bicusa.org
ADB releases draft disclosure policy for comment
After months of deliberation, the ADB has released a first draft of its new disclosure policy or “Public Communications Policy” (PCP). Although the draft policy is an improvement from the Bank’s current disclosure standards, it does not address many of the recommendations the bank received from civil society (For more on this see BIC’s webpage on ADB Transparency). The ADB is accepting comments on the draft policy until 28 May 2004. Starting in late April, the ADB will begin face-to-face consultations in 12 cities, including Bishkek, Kyrgyzstan on 9 July 2004. For more information on civil society activities around the review contact Mishka Zaman () in Washington or Sameer Dossani () in Manila. For more information about the review process or to see the draft policy, go to www.adb.org/disclosure.
IFC disclosure & safeguard policies consultations
IFC is reviewing its 1998 Policy on Disclosure of Information. Public comments that were accepted through March 12 can be viewed on the IFC’s website. For more information on this process, click here. If you have any questions, please contact BIC’s Transparency Program Associate Jen Kalafut at . The IFC is also reviewing and updating its 1998 Safeguard Policies. The process will include public consultation with external stakeholders beginning in June 2004. To learn more about the Safeguard Policies update, click on this link. If you have any questions contact BIC’s Policy Director Bruce Jenkins at .
ADB approves Japan Fund for Public Policy Training (JFPPT)
On 12 March, the ADB approved the establishment for Japan Fund for Public Policy Training (JFPPT). The purpose of JFPPT is to enhance capacity building for public policy management in developing member countries. Mid-career to senior level government officials engaged in economic management at national and sub national levels will be eligible to participate in the program. For more information, click on the name of the program above.
Archive
Previous Updates and related reports can be found on BIC’s website including: Azerbaijan Country Update #1, March 1, 2004 in English and Russian. For a summary of active MDB projects in Azerbaijan, read BIC’s report, “Multilateral Development Bank Investment in Azerbaijan: through September, 2003.” Also available in Russian.