Alarming situation in human rights and civil society costed Azerbaijan its membership in the Extractive Industries Transparency Initiative (EITI), that put in danger not only civil ecosystem but the country’s economy as well
Domestic Policy: Azerbaijan leaves EITI
The latest developments in Azerbaijani NGO sector and civil society engagement issues alarmed not only the local experts and activists but the international partners too. Unsatisfying domestic situation became a reason for the suspension of the Azerbaijan’s membership in the Extractive Industries Transparency Initiative (EITI), an international transparency watch dog. The decision was taken on March 9, during the 36th EITI Board Meeting held in Bogota, Colombia, and made Azerbaijan immediately ask for its name removal from the list of the EITI members.
Azerbaijan’s revoking EITI membership will make the economy of the country less attractive for foreign investment.
The EITI membership was a key asset for the country’s oil and natural gas economy, and such ambitious energy projects as the Southern Gas Corridor (TAP&TANAP). Revoking of the EITI membership will make the economy less attractive for the foreign investments, which are vital for the economic reforms, and will limit the government’s capacities in its ambitious infrastructure development plans, connected with the Southern Gas Corridor project, in particular.
Exiting the EITI may also have negative effects on the domestic civil society environment. However, the current positive situation in EU-Azerbaijani relations brings hopes for a possibility to avoid any negative effect on the civil society.
Economy: New rules to support banks
In March, the Central Bank of Azerbaijan continued its rigid monetary policy, resulting in the national currency cash shortage in several commercial banks. Due to this, in March there was no currency rate raise tendency. Moreover, the Financial Market Supervisory Authority (FIMSA) in Azerbaijan introduced the new rules and tools to support the banks with undercapitalization.
The banks are inclined to meet these new requirements to become crisis-robust in the future. Those facing capital shortage must apply for the shareholders’ capital infusions. Failing to meet these rules will trigger the liquidation of the bank’s assets. The new legislation, revised by the Parliamentary Committee on Economic Policy, Industry and Entrepreneurship, also offers refunding for the systemically important banks with the public funds.
The former legislation base could not support the banks during crisis. Due to this, numerous banks had difficulties in 2015–2016 and lost their licenses. With the current changes, the government wants to bring the clearer rules to the public finance sector.
Besides, Azerbaijan works on the implementation of the earlier introduced Strategic road-map for the reforms. Within the road-map framework, some changes to legislation in various areas were already introduced.
Foreign Policy: President Aliyev visits France
On March 12, the President of Azerbaijan Ilham Aliyev made an official visit to France, that can be taken within the context of the EU – Azerbaijan rapprochement. Together with the President of France Francois Hollande, he met (1) the high-ranking officials of the French government and members of the Senate. Prior to the visit Aliyev received in Baku a delegation of France-Caucasus Friendship Group in the Senate of France.
In February 2017, Aliyev also visited Brussels and other EU countries, trying to bring the EU and Azerbaijan closer. This rapprochement is very important for the Azerbaijani economic development. Keeping structural economic and political reforms in the focus, Azerbaijan needs cooperation with the EU member states.
