President of Azerbaijan oil fund: Government bad businessman

The State Oil Fund of Azerbaijan (SOFAZ) was created to manage oil and gas revenues of Azerbaijan as the National Welfare Fund. At present the Fund’s assets equal to half of Azerbaijan’s GDP and it is becoming a big international investor, SOFAZ President  Shakhmar Movsumov said in his interview to British Independent newspaper.

He said there are two ways for the government to diversify the economy. The first one is the leading role, when the government is in the vanguard building plants and diversifies its manufacture. The second one is the stimulating role, when the government invests capital into infrastructure and creates better conditions for the private sector.

“We have tried the first method in the Soviet Union for 70 years and it did not work. The government is a bad businessman and it should not be involved into production of goods and services. It must create conditions. For this reason the government invests capital into the basic infrastructure,” explained SOFAZ President.

Asked about the perspectives of the South Gas Corridor and its influence on the SOFAZ’s incomes, Movsumov said that revenues from gas sales will not be as big as from oil sale.

He said gas is political more important and for Azerbaijan it is a strategic project. “We would like to become part of the project of energy diversification and we are happy that we will be able to open resources of Azerbaijan as well as the entire region for Europe,” Movsumov concluded.

* By October 1, 2013 SOFAZ’s assets totaled $35.8 billion.—0—