Page 124 - Azerbaijan State University of Economics

THE PUBLIC INVESTMENTS IN AZERBAIJAN: THEORETICAL AND PRACTICAL ASPECTS

Nowadays the investment activity of the government is covered by

the Public Investment Program. This program considers the financing and
maintenance of commercial and non-commercial investments by the

means of the state budget or other source during next and subsequent three
budgetary periods. Investment expenditures are expenses directed to

increase of assets in state and non-budgetary organizations and funds

[Rules on establishment, execution, monitoring and evaluation of the State
Investment Program of Azerbaijan Republic, 2010]. As we can see

expenses directed to increase of assets within the public agencies forms
the public investments. In our opinion, such approach covers the concept

of public investments in wider range. At the same time identification of

the “government investment” in this way abstracts it more. Thus, the State
Oil Fund of Azerbaijan Republic may have extensive assets in form of

foreign currency. For example in 2010 the State Oil Fund had foreign
currency balance in different banks around the world in amount of 101.6

mln. AZN [State Oil Fund of Azerbaijan Republic, 2010: 92]. Cash cannot
be considered as investment, due to the fact that it is affected by the

inflation and does not participate in the revenue generation process

[Gitman, 1997: 10]. At the same time the public investments cover only
investments done by the public agencies and under the public guaranties.

From this point of view investments implemented under the State
Investment Program are financed by State Oil Fund and the state budget or

by external debt financing. At the same time investments made under the
program are ultimately transferred to the ownership of the respective

public agencies. Thus, limited liability companies like “Azerenergy”,

“Azersu”, “Azeryolservis”, State Oil Company, Baku Metropolitan and
other similar institutions are provided by financing from the state budget

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