Page 49 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.73, # 1, 2016, pp. 45-51

Therefore, the amount of transfers to the state budget was reduced by 4.27
billion USD, or by 35.2% in 2015 compared with previous year.
As presented in the Diagram above, starting from 2006, the amount of
transfers from the Fund to the state budget rose rapidly, and reached its maximum in
2013. To put it another way, during the period 2005-2013 the volume of transfers
increased by 91 times. In 2014 the government reduced the amount of transfers with
the purpose of saving. Yet, the sharp decline in fuel prices in 2015 necessitated the
reduction.
Based on the information available on 2015 October 1, in the year 2015 the
assets of the Fund decreased by 6.38%, being equivalent to 34.7 billion USD
(01.01.2015, 37.1 billion USD, SOFAZ, 2016). Taking into consideration that only
the transfers to state budget from the Fund constituted 2.35 billion USD in the last
quarter of the year the depletion of assets continued in the fourth quarter as well.
Diagram 7. Assets of the Oil Fund, billion USD

Source: the State Oil Fund of the Republic of Azerbaijan, 2016
Economic crisis and reforms
Notwithstanding severe social and economic consequences, the crisis called
for new challenges, especially the necessity of economic reforms in the country. The
country has diverged from free market principles as monopolistic tendencies and
civil servants in business environment have been dominant for a long period.
Possessing large oil revenues gives the Government of Azerbaijan a unique
opportunity to effectively use this newfound wealth by investing in development
programs that can provide a lasting benefit to its citizens‘ social welfare, economic
growth, security, and overall quality of life. [Labour market reforms since the crisis]

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