The courageous step of the Azerbaijani government, which was not afraid of the powerful donor, could be rather admirable, if not one factor: the principality of the authorities was dictated by the will to achieve a maximum freedom in manipulating with finances collected as taxes.
The harsh conditions of the IMF representatives in this case were because the government of Azerbaijan, despite the requirements of the tax code adopted in 2000, has decided to separate the State Oil Fund from the state budget and liberate its authorities from the obligation to be reportable before the parliament.
The IMF requirements concern also the differentiated approach to taxation of the enterprises operating in the capital city and the regions. Representatives of the fund think that this was introduced in order to create favorable conditions for corruption, as the officials will have the opportunity to support those who want to avoid paying taxes. “The government of Azerbaijan has always bypassed the rules. The approach of the government creates a threat for the macroeconomic stability,” the statement spread by the IMF representation reads.
The reaction of the IMF authorities was very clear – the deputy head of the IMF Second European Department John Wakemann-Linn, while arrived in Azerbaijan, said that there were no hopes not only for receiving new credits but also for the already approved tranches. We’ll note that at present programs worth $104 million financed by IMF are in the process of implementation. “It’s a pity to interrupt the implementation of a program,” IMF representative in Baku Michael Mered said stressing that the Azerbaijani government had very little time for thinking.
It is obvious that the unwillingness of the Azerbaijani government to “obey” to advises of the IMF does not have political but only a personal pretext connected with the mercantile interests of the Aliyev family. Meanwhile, the Azerbaijani society is being presented another version. The authorities try to blame the leadership of the fund for the failure of negotiations. They assure their compatriots that the confrontation with the IMF will not lead to negative consequences for the country’s economy. At the same time, Finance Minister Avez Alekperov said recently that they would be obliged to look for new sources of finances as the credit they were counting on would not be provided.
It is natural that the government of the country does everything so that the population does not understand the danger of the processes going on. However, the threats voiced by Michael Mered are very serious. In an interview to one of the Baku newspapers the IMF representative insinuated that the fund may use its mechanisms for impeding the financing of the Baku-Tbilisi-Ceyhan oil pipeline construction. “As you know, the IMF is a global institute and its approval will help in the relations with other institutes and investors including the World Bank,” Mered said.
Translating from the diplomatic language, this will mean that if you do not make up your mind, we will do so that you do not receive anything neither from the World Bank nor form the commercial structures.
So, this is another threat to the “project of the century”. This time it comes from an organization which is very influential. We hope this time it will be difficult for Baku to blame the Armenians for this situation.
