Azerbaijan Received More Than 60% of International Loans under State Guarantee

At the beginning of the year the amount of the loan agreements signed by Azerbaijan under the state guarantee and serviced by the state budget was $ 10 billion 211,300,000, 65.9% or $ 6 billion 676 200 000 of which was already received on the accounts of the beneficiaries.

As stated in the report of the government on the eve of the 48^th meeting of the Board of Governors of the Asian Development Bank in Baku, last year $ 2 billion 144.9 million of these funds was spent. In the form of principal debt $ 1 billion 146.6 million was returned to the lenders.

The residual amount of foreign debt on the basis of statements of beneficiary organizations by January 1 was $ 6 billion 478.2 million, which is $ 675.3 per capita. The ratio looks like 7.3% of the guaranteed public external debt raised for up to 10 years, 60.2% - from 10 to 20 years, still 32.5% - for a longer period of time. Moreover, almost two-thirds (63.9%) of the debt were raised in accordance with the variable interest rate.

According to local media, yesterday the Minister of Finance Samir Sharifov said the government has not exclude the need for external borrowing. "Last year, we placed the first government bonds in foreign markets, and before that all external borrowing was associated with important projects, but not with commercial operations," he said.

As you can see from the report, the largest share in the currency structure of external debt to the top of the year fell to US dollars - 64.8%, the euro - 21.4%, the Special Drawing Rights of the IMF - 9.9%, and the Japanese yen - 2 1%. In the currency structure there are also the Saudi dinars - 0.7%, the Kuwaiti dinars - 0.2% and AED - 0.5%.

Traditionally, the majority (59.5%) of the "hanging" external debt accounts for infrastructure projects that cannot be the really checked by representatives of civil society. More than a third of used loans ($ 2 billion 341.6 million) for Azerbaijan were issued on a preferential basis.

As can be seen from the document, money is mainly allocated to the development of non-oil sector in order to diversify the economy, but its real sector has not yet been developed, which is reflected in the range of products in the food and non-food market as well as in the service sector. The devaluation of the manat and falling oil prices created conditions for more expensive imported goods, whose share in the domestic turnover is about 80%.

International organizations in 2006 strongly recommended the local government to diversify the economy, but it prefers relatively "easy" oil dollars, hoping for a rise in oil prices and growing exports of natural gas. -17D-