Position paper: Second Committee Azeri, Irina and Chao

Committee: General Assembly Second Committee

Topic: Preservation of Macroeconomic Stability

Country: The Republic of Azerbaijan

Delegate: Irina Igel, Luo Shuchao, Forest Hills High School

In 1994, as a result of the National Oil Strategy, Azerbaijan Republic had successfully entered a new stage of its economic development in the world oil market. Foreign Direct Investments were attracted to the oil-related sectors allowing country to receive foreign currency from the export of oil and gas. However, keeping in mind a possibility of a complete exhaustion of deposits and the need for the maintenance of macroeconomic stability, Azerbaijan Government was constrained to pay more attention on a private sector of economy. The goal was to stimulate investing into development of the non-oil sector and improve living standards for the people.

The Law of Azerbaijan Republic on Protection of Foreign Investments guarantees “complete and absolute legal protection” for investors and their money. In the mean time the experts of the World Bank has created laws concerning investment activity in the Azerbaijan that will reinforce safety of the investments and introduce reasonable solutions to the debates occurred during the process of money investment. Foreign companies can also participate in the process of privatization. During the U.S.-Azerbaijan Chamber of Commerce conference held on April 18^th, 2005 minister of Economic Development of Azerbaijan, Farhad Aliyev said, “We are interested in attracting foreign investments, and in their transparent management. Law on investment activities, which will be adopted soon by the Parliament, will provide solid protection expected by investors.”

One of the most essential results in the development of non-oil sector will be reflected in the unemployment and poverty reduction on the social level and development of small private businesses on economic. State programs such as State Program for Development of Small and Middle Entrepreneurship and State Program for Reduction of the Poverty and Economic Development are the projects that will encourage implementation of state and United Nations Millenium Development goals.

Investing to the private sector will contribute money to a large -scale development of infrastructure and improvement of education system and health sanitation of society. One way to do so is to put money into building medical schools, hospitals, clinics and purchasing of equipment. The importance of this move will result in general improvement of public health and in the future will provide jobs to unemployed families. It’ll be bilaterally profitable to create sanatoriums and vacation spots as well.

Another way is to invest money into development of industry, construction, transport, agriculture and communication. This entrepreneurial insert of money guarantees to bring revenues to Azerbaijan in order to develop and to pay off the debt to investors. In 2004, about 68 % of over all GDP were gained from those spheres, pointing out its potential wealth.

In order for the Azerbaijan to maintain a strong and continually developing economy, it needs to focus its attention on developing of infrastructure and non-oil sectors of economy. Reformation of these spheres will improve standards of public living and cultural development. Republic looks forward and welcomes new investment in these fields as well as guarantees security and protection of investor’s rights.