Keep Us Strong WikiLeaks logo

Currently released so far... 251287 / 251,287

Articles

Browse latest releases

Browse by creation date

Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z

Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
AEMR ASEC AMGT AE AS AMED AVIAN AU AF AORC AGENDA AO AR AM APER AFIN ATRN AJ ABUD ARABL AL AG AODE ALOW ADANA AADP AND APECO ACABQ ASEAN AA AFFAIRS AID AGR AY AGS AFSI AGOA AMB ARF ANET ASCH ACOA AFLU AFSN AMEX AFDB ABLD AESC AFGHANISTAN AINF AVIATION ARR ARSO ANDREW ASSEMBLY AIDS APRC ASSK ADCO ASIG AC AZ APEC AFINM ADB AP ACOTA ASEX ACKM ASUP ANTITERRORISM ADPM AINR ARABLEAGUE AGAO AORG AMTC AIN ACCOUNT ASECAFINGMGRIZOREPTU AIDAC AINT ARCH AMGTKSUP ALAMI AMCHAMS ALJAZEERA AVIANFLU AORD AOREC ALIREZA AOMS AMGMT ABDALLAH AORCAE AHMED ACCELERATED AUC ALZUGUREN ANGEL AORL ASECIR AMG AMBASSADOR AEMRASECCASCKFLOMARRPRELPINRAMGTJMXL ADM ASES ABMC AER AMER ASE AMGTHA ARNOLDFREDERICK AOPC ACS AFL AEGR ASED AFPREL AGRI AMCHAM ARNOLD AN ANATO AME APERTH ASECSI AT ACDA ASEDC AIT AMERICA AMLB AMGE ACTION AGMT AFINIZ ASECVE ADRC ABER AGIT APCS AEMED ARABBL ARC ASO AIAG ACEC ASR ASECM ARG AEC ABT ADIP ADCP ANARCHISTS AORCUN AOWC ASJA AALC AX AROC ARM AGENCIES ALBE AK AZE AOPR AREP AMIA ASCE ALANAZI ABDULRAHMEN ABDULHADI AINFCY ARMS ASECEFINKCRMKPAOPTERKHLSAEMRNS AGRICULTURE AFPK AOCR ALEXANDER ATRD ATFN ABLG AORCD AFGHAN ARAS AORCYM AVERY ALVAREZ ACBAQ ALOWAR ANTOINE ABLDG ALAB AMERICAS AFAF ASECAFIN ASEK ASCC AMCT AMGTATK AMT APDC AEMRS ASECE AFSA ATRA ARTICLE ARENA AISG AEMRBC AFR AEIR ASECAF AFARI AMPR ASPA ASOC ANTONIO AORCL ASECARP APRM AUSTRALIAGROUP ASEG AFOR AEAID AMEDI ASECTH ASIC AFDIN AGUIRRE AUNR ASFC AOIC ANTXON ASA ASECCASC ALI AORCEUNPREFPRELSMIGBN ASECKHLS ASSSEMBLY ASECVZ AI ASECPGOV ASIR ASCEC ASAC ARAB AIEA ADMIRAL AUSGR AQ AMTG ARRMZY ANC APR AMAT AIHRC AFU ADEL AECL ACAO AMEMR ADEP AV AW AOR ALL ALOUNI AORCUNGA ALNEA ASC AORCO ARMITAGE AGENGA AGRIC AEM ACOAAMGT AGUILAR AFPHUM AMEDCASCKFLO AFZAL AAA ATPDEA ASECPHUM ASECKFRDCVISKIRFPHUMSMIGEG
ETRD ETTC EU ECON EFIN EAGR EAID ELAB EINV ENIV ENRG EPET EZ ELTN ELECTIONS ECPS ET ER EG EUN EIND ECONOMICS EMIN ECIN EINT EWWT EAIR EN ENGR ES EI ETMIN EL EPA EARG EFIS ECONOMY EC EK ELAM ECONOMIC EAR ESDP ECCP ELN EUM EUMEM ECA EAP ELEC ECOWAS EFTA EXIM ETTD EDRC ECOSOC ECPSN ENVIRONMENT ECO EMAIL ECTRD EREL EDU ENERG ENERGY ENVR ETRAD EAC EXTERNAL EFIC ECIP ERTD EUC ENRGMO EINZ ESTH ECCT EAGER ECPN ELNT ERD EGEN ETRN EIVN ETDR EXEC EIAD EIAR EVN EPRT ETTF ENGY EAIDCIN EXPORT ETRC ESA EIB EAPC EPIT ESOCI ETRB EINDQTRD ENRC EGOV ECLAC EUR ELF ETEL ENRGUA EVIN EARI ESCAP EID ERIN ELAN ENVT EDEV EWWY EXBS ECOM EV ELNTECON ECE ETRDGK EPETEIND ESCI ETRDAORC EAIDETRD ETTR EMS EAGRECONEINVPGOVBN EBRD EUREM ERGR EAGRBN EAUD EFI ETRDEINVECINPGOVCS EPEC ETRO ENRGY EGAR ESSO EGAD ENV ENER EAIDXMXAXBXFFR ELA EET EINVETRD EETC EIDN ERGY ETRDPGOV EING EMINCG EINVECON EURM EEC EICN EINO EPSC ELAP ELABPGOVBN EE ESPS ETRA ECONETRDBESPAR ERICKSON EEOC EVENTS EPIN EB ECUN EPWR ENG EX EH EAIDAR EAIS ELBA EPETUN ETRDEIQ EENV ECPC ETRP ECONENRG EUEAID EWT EEB EAIDNI ESENV EADM ECN ENRGKNNP ETAD ETR ECONETRDEAGRJA ETRG ETER EDUC EITC EBUD EAIF EBEXP EAIDS EITI EGOVSY EFQ ECOQKPKO ETRGY ESF EUE EAIC EPGOV ENFR EAGRE ENRD EINTECPS EAVI ETC ETCC EIAID EAIDAF EAGREAIDPGOVPRELBN EAOD ETRDA EURN EASS EINVA EAIDRW EON ECOR EPREL EGPHUM ELTM ECOS EINN ENNP EUPGOV EAGRTR ECONCS ETIO ETRDGR EAIDB EISNAR EIFN ESPINOSA EAIDASEC ELIN EWTR EMED ETFN ETT EADI EPTER ELDIN EINVEFIN ESS ENRGIZ EQRD ESOC ETRDECD ECINECONCS EAIT ECONEAIR ECONEFIN EUNJ ENRGKNNPMNUCPARMPRELNPTIAEAJMXL ELAD EFIM ETIC EFND EFN ETLN ENGRD EWRG ETA EIN EAIRECONRP EXIMOPIC ERA ENRGJM ECONEGE ENVI ECHEVARRIA EMINETRD EAD ECONIZ EENG ELBR EWWC ELTD EAIDMG ETRK EIPR EISNLN ETEX EPTED EFINECONCS EPCS EAG ETRDKIPR ED EAIO ETRDEC ENRGPARMOTRASENVKGHGPGOVECONTSPLEAID ECONEINVEFINPGOVIZ ERNG EFINU EURFOR EWWI ELTNSNAR ETD EAIRASECCASCID EOXC ESTN EAIDAORC EAGRRP ETRDEMIN ELABPHUMSMIGKCRMBN ETRDEINVTINTCS EGHG EAIDPHUMPRELUG EAGRBTIOBEXPETRDBN EDA EPETPGOV ELAINE EUCOM EMW EFINECONEAIDUNGAGM ELB EINDETRD EMI ETRDECONWTOCS EINR ESTRADA EHUM EFNI ELABV ENR EMN EXO EWWTPRELPGOVMASSMARRBN EATO END EP EINVETC ECONEFINETRDPGOVEAGRPTERKTFNKCRMEAID ELTRN EIQ ETTW EAI ENGRG ETRED ENDURING ETTRD EAIDEGZ EOCN EINF EUPREL ENRL ECPO ENLT EEFIN EPPD ECOIN EUEAGR EISL EIDE ENRGSD EINVECONSENVCSJA EAIG ENTG EEPET EUNCH EPECO ETZ EPAT EPTE EAIRGM ETRDPREL EUNGRSISAFPKSYLESO ETTN EINVKSCA ESLCO EBMGT ENRGTRGYETRDBEXPBTIOSZ EFLU ELND EFINOECD EAIDHO EDUARDO ENEG ECONEINVETRDEFINELABETRDKTDBPGOVOPIC EFINTS ECONQH ENRGPREL EUNPHUM EINDIR EPE EMINECINECONSENVTBIONS EFINM ECRM EQ EWWTSP ECONPGOVBN
KFLO KPKO KDEM KFLU KTEX KMDR KPAO KCRM KIDE KN KNNP KG KMCA KZ KJUS KWBG KU KDMR KAWC KCOR KPAL KOMC KTDB KTIA KISL KHIV KHUM KTER KCFE KTFN KS KIRF KTIP KIRC KSCA KICA KIPR KPWR KWMN KE KGIC KGIT KSTC KACT KSEP KFRD KUNR KHLS KCRS KRVC KUWAIT KVPR KSRE KMPI KMRS KNRV KNEI KCIP KSEO KITA KDRG KV KSUM KCUL KPET KBCT KO KSEC KOLY KNAR KGHG KSAF KWNM KNUC KMNP KVIR KPOL KOCI KPIR KLIG KSAC KSTH KNPT KINL KPRP KRIM KICC KIFR KPRV KAWK KFIN KT KVRC KR KHDP KGOV KPOW KTBT KPMI KPOA KRIF KEDEM KFSC KY KGCC KATRINA KWAC KSPR KTBD KBIO KSCI KRCM KNNB KBNC KIMT KCSY KINR KRAD KMFO KCORR KW KDEMSOCI KNEP KFPC KEMPI KBTR KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG KNPP KTTB KTFIN KBTS KCOM KFTN KMOC KOR KDP KPOP KGHA KSLG KMCR KJUST KUM KMSG KHPD KREC KIPRTRD KPREL KEN KCSA KCRIM KGLB KAKA KWWT KUNP KCRN KISLPINR KLFU KUNC KEDU KCMA KREF KPAS KRKO KNNC KLHS KWAK KOC KAPO KTDD KOGL KLAP KECF KCRCM KNDP KSEAO KCIS KISM KREL KISR KISC KKPO KWCR KPFO KUS KX KWCI KRFD KWPG KTRD KH KLSO KEVIN KEANE KACW KWRF KNAO KETTC KTAO KWIR KVCORR KDEMGT KPLS KICT KWGB KIDS KSCS KIRP KSTCPL KDEN KLAB KFLOA KIND KMIG KPPAO KPRO KLEG KGKG KCUM KTTP KWPA KIIP KPEO KICR KNNA KMGT KCROM KMCC KLPM KNNPGM KSIA KSI KWWW KOMS KESS KMCAJO KWN KTDM KDCM KCM KVPRKHLS KENV KCCP KGCN KCEM KEMR KWMNKDEM KNNPPARM KDRM KWIM KJRE KAID KWMM KPAONZ KUAE KTFR KIF KNAP KPSC KSOCI KCWI KAUST KPIN KCHG KLBO KIRCOEXC KI KIRCHOFF KSTT KNPR KDRL KCFC KLTN KPAOKMDRKE KPALAOIS KESO KKOR KSMT KFTFN KTFM KDEMK KPKP KOCM KNN KISLSCUL KFRDSOCIRO KINT KRG KWMNSMIG KSTCC KPAOY KFOR KWPR KSEPCVIS KGIV KSEI KIL KWMNPHUMPRELKPAOZW KQ KEMS KHSL KTNF KPDD KANSOU KKIV KFCE KTTC KGH KNNNP KK KSCT KWNN KAWX KOMCSG KEIM KTSD KFIU KDTB KFGM KACP KWWMN KWAWC KSPA KGICKS KNUP KNNO KISLAO KTPN KSTS KPRM KPALPREL KPO KTLA KCRP KNMP KAWCK KCERS KDUM KEDM KTIALG KWUN KPTS KPEM KMEPI KAWL KHMN KCRO KCMR KPTD KCROR KMPT KTRF KSKN KMAC KUK KIRL KEM KSOC KBTC KOM KINP KDEMAF KTNBT KISK KRM KWBW KBWG KNNPMNUC KNOP KSUP KCOG KNET KWBC KESP KMRD KEBG KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG KPWG KOMCCO KRGY KNNF KPROG KJAN KFRED KPOKO KM KWMNCS KMPF KJWC KJU KSMIG KALR KRAL KDGOV KPA KCRMJA KCRI KAYLA KPGOV KRD KNNPCH KFEM KPRD KFAM KALM KIPRETRDKCRM KMPP KADM KRFR KMWN KWRG KTIAPARM KTIAEUN KRDP KLIP KDDEM KTIAIC KWKN KPAD KDM KRCS KWBGSY KEAI KIVP KPAOPREL KUNH KTSC KIPT KNP KJUSTH KGOR KEPREL KHSA KGHGHIV KNNR KOMH KRCIM KWPB KWIC KINF KPER KILS KA KNRG KCSI KFRP KLFLO KFE KNPPIS KQM KQRDQ KERG KPAOPHUM KSUMPHUM KVBL KARIM KOSOVO KNSD KUIR KWHG KWBGXF KWMNU KPBT KKNP KERF KCRT KVIS KWRC KVIP KTFS KMARR KDGR KPAI KDE KTCRE KMPIO KUNRAORC KHOURY KAWS KPAK KOEM KCGC KID KVRP KCPS KIVR KBDS KWOMN KIIC KTFNJA KARZAI KMVP KHJUS KPKOUNSC KMAR KIBL KUNA KSA KIS KJUSAF KDEV KPMO KHIB KIRD KOUYATE KIPRZ KBEM KPAM KDET KPPD KOSCE KJUSKUNR KICCPUR KRMS KWMNPREL KWMJN KREISLER KWM KDHS KRV KPOV KWMNCI KMPL KFLD KWWN KCVM KIMMITT KCASC KOMO KNATO KDDG KHGH KRF KSCAECON KWMEN KRIC
PREL PINR PGOV PHUM PTER PE PREF PARM PBTS PINS PHSA PK PL PM PNAT PHAS PO PROP PGOVE PA PU POLITICAL PPTER POL PALESTINIAN PHUN PIN PAMQ PPA PSEC POLM PBIO PSOE PDEM PAK PF PKAO PGOVPRELMARRMOPS PMIL PV POLITICS PRELS POLICY PRELHA PIRN PINT PGOG PERSONS PRC PEACE PROCESS PRELPGOV PROV PFOV PKK PRE PT PIRF PSI PRL PRELAF PROG PARMP PERL PUNE PREFA PP PGOB PUM PROTECTION PARTIES PRIL PEL PAGE PS PGO PCUL PLUM PIF PGOVENRGCVISMASSEAIDOPRCEWWTBN PMUC PCOR PAS PB PKO PY PKST PTR PRM POUS PRELIZ PGIC PHUMS PAL PNUC PLO PMOPS PHM PGOVBL PBK PELOSI PTE PGOVAU PNR PINSO PRO PLAB PREM PNIR PSOCI PBS PD PHUML PERURENA PKPA PVOV PMAR PHUMCF PUHM PHUH PRELPGOVETTCIRAE PRT PROPERTY PEPFAR PREI POLUN PAR PINSF PREFL PH PREC PPD PING PQL PINSCE PGV PREO PRELUN POV PGOVPHUM PINRES PRES PGOC PINO POTUS PTERE PRELKPAO PRGOV PETR PGOVEAGRKMCAKNARBN PPKO PARLIAMENT PEPR PMIG PTBS PACE PETER PMDL PVIP PKPO POLMIL PTEL PJUS PHUMNI PRELKPAOIZ PGOVPREL POGV PEREZ POWELL PMASS PDOV PARN PG PPOL PGIV PAIGH PBOV PETROL PGPV PGOVL POSTS PSO PRELEU PRELECON PHUMPINS PGOVKCMABN PQM PRELSP PRGO PATTY PRELPGOVEAIDECONEINVBEXPSCULOIIPBTIO PGVO PROTESTS PRELPLS PKFK PGOVEAIDUKNOSWGMHUCANLLHFRSPITNZ PARAGRAPH PRELGOV POG PTRD PTERM PBTSAG PHUMKPAL PRELPK PTERPGOV PAO PRIVATIZATION PSCE PPAO PGOVPRELPHUMPREFSMIGELABEAIDKCRMKWMN PARALYMPIC PRUM PKPRP PETERS PAHO PARMS PGREL PINV POINS PHUMPREL POREL PRELNL PHUMPGOV PGOVQL PLAN PRELL PARP PROVE PSOC PDD PRELNP PRELBR PKMN PGKV PUAS PRELTBIOBA PBTSEWWT PTERIS PGOVU PRELGG PHUMPRELPGOV PFOR PEPGOV PRELUNSC PRAM PICES PTERIZ PREK PRELEAGR PRELEUN PHUME PHU PHUMKCRS PRESL PRTER PGOF PARK PGOVSOCI PTERPREL PGOVEAID PGOVPHUMKPAO PINSKISL PREZ PGOVAF PARMEUN PECON PINL POGOV PGOVLO PIERRE PRELPHUM PGOVPZ PGOVKCRM PBST PKPAO PHUMHUPPS PGOVPOL PASS PPGOV PROGV PAGR PHALANAGE PARTY PRELID PGOVID PHUMR PHSAQ PINRAMGT PSA PRELM PRELMU PIA PINRPE PBTSRU PARMIR PEDRO PNUK PVPR PINOCHET PAARM PRFE PRELEIN PINF PCI PSEPC PGOVSU PRLE PDIP PHEM PRELB PORG PGGOC POLG POPDC PGOVPM PWMN PDRG PHUMK PINB PRELAL PRER PFIN PNRG PRED POLI PHUMBO PHYTRP PROLIFERATION PHARM PUOS PRHUM PUNR PENA PGOVREL PETRAEUS PGOVKDEM PGOVENRG PHUS PRESIDENT PTERKU PRELKSUMXABN PGOVSI PHUMQHA PKISL PIR PGOVZI PHUMIZNL PKNP PRELEVU PMIN PHIM PHUMBA PUBLIC PHAM PRELKPKO PMR PARTM PPREL PN PROL PDA PGOVECON PKBL PKEAID PERM PRELEZ PRELC PER PHJM PGOVPRELPINRBN PRFL PLN PWBG PNG PHUMA PGOR PHUMPTER POLINT PPEF PKPAL PNNL PMARR PAC PTIA PKDEM PAUL PREG PTERR PTERPRELPARMPGOVPBTSETTCEAIRELTNTC PRELJA POLS PI PNS PAREL PENV PTEROREP PGOVM PINER PBGT PHSAUNSC PTERDJ PRELEAID PARMIN PKIR PLEC PCRM PNET PARR PRELETRD PRELBN PINRTH PREJ PEACEKEEPINGFORCES PEMEX PRELZ PFLP PBPTS PTGOV PREVAL PRELSW PAUM PRF PHUMKDEM PATRICK PGOVKMCAPHUMBN PRELA PNUM PGGV PGOVSMIGKCRMKWMNPHUMCVISKFRDCA PBT PIND PTEP PTERKS PGOVJM PGOT PRELMARR PGOVCU PREV PREFF PRWL PET PROB PRELPHUMP PHUMAF PVTS PRELAFDB PSNR PGOVECONPRELBU PGOVZL PREP PHUMPRELBN PHSAPREL PARCA PGREV PGOVDO PGON PCON PODC PRELOV PHSAK PSHA PGOVGM PRELP POSCE PGOVPTER PHUMRU PINRHU PARMR PGOVTI PPEL PMAT PAN PANAM PGOVBO PRELHRC

Browse by classification

Community resources

courage is contagious

Viewing cable 06BAKU407, MANAGING AZERBAIJAN,S LOOMING ECONOMIC STORM

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs

Understanding cables
Every cable message consists of three parts:
  • The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
  • The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
  • The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
To understand the justification used for the classification of each cable, please use this WikiSource article as reference.

Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #06BAKU407.
Reference ID Created Released Classification Origin
06BAKU407 2006-03-15 13:03 2011-08-30 01:44 CONFIDENTIAL Embassy Baku
VZCZCXRO9484
RR RUEHDBU
DE RUEHKB #0407/01 0741303
ZNY CCCCC ZZH
R 151303Z MAR 06
FM AMEMBASSY BAKU
TO RUEHC/SECSTATE WASHDC 9858
INFO RUCNCIS/CIS COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 1532
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEKJCS/SECDEF WASHDC
RUEAIIA/CIA WASHINGTON DC
RUEKDIA/DIA WASHDC
RUEKJCS/JOINT STAFF WASHDC
RHMFISS/CDR USEUCOM VAIHINGEN GE
RHMFISS/CDR USCENTCOM MACDILL AFB FL
C O N F I D E N T I A L SECTION 01 OF 05 BAKU 000407 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 03/16/2016 
TAGS: ECON EFIN EAID ETRD PREL PGOV AJ
SUBJECT: MANAGING AZERBAIJAN,S LOOMING ECONOMIC STORM 
 
 
Classified By: Ambassador Reno L. Harnish III per 1.4 (b,d). 
 
1. (C) SUMMARY: Azerbaijan faces a massive economic challenge 
over the near-term.  With oil revenue projected to reach USD 
42 billion by 2010, Azerbaijan has the opportunity to 
transform from a cash-poor developing nation into an 
economically confident regional leader.  While the GOAJ in 
theory has the right tools in place to make this transition, 
we see troubling signs that the GOAJ is moving in the wrong 
direction.  Quick GOAJ action is needed in its economic 
decision-making structure, anti-inflationary measures and 
banking reform.  Over the medium-term, the GOAJ also must 
take action on the business climate, anticorruption measures 
and increasing citizen oversight of GOAJ activities. 
Continued, high-level engagement by the U.S. and the 
international community will be key to convincing the GOAJ to 
take these hard steps.  END SUMMARY 
 
EXPANDING ECONOMY PRESENTS DIFFICULT CHALLENGES 
--------------------------------------------- -- 
 
2. (C) Azerbaijan,s rapidly expanding economy poses a 
massive challenge tQhe GOAJ.  With oil revenue projectQto 
reach USD 42 billion by 2010, Azerbaijan must apply a 
balanced approach to fiscal and budgetary policy that 
maintains macroeconomic stability while allowing sustainable 
capital investment and infrastructure development.  While the 
GOAJ in theory has many of the right tools in place to manage 
this transition -- including an internationally audited State 
Oil Fund and an economic reform program -- we see increasing, 
troubling signs that the GOAJ is moving in the wrong 
direction.  With a whopping 70 percent increase in the state 
budgQor 2006, there is a real danger that the combination 
of weak monetary tools and sharply increased public 
expenditures as petro-dollars flood into a weak economic 
environment could lead to higher inflation and the potential 
for economic and political instability. 
 
3. (C) The GOAJ has yet to show sufficient respect for the 
economic and financial perils that can come with an economy 
reliant on oil, i.e. Dutch Disease.  The onset of Dutch 
Disease would only worsen Azerbaijan,s already large poverty 
problem, with 40 percent of the population currently under 
the poverty line.  While the international community 
continues to be engaged on economic issues, our ability to 
maintain pressure on the GOAJ to continue reforms, control 
inflation, and diversify the economy will decrease as GOAJ 
revenues increase.  The GOAJ already has not hesitated to 
break off negotiations with IFIs if the lending conditions 
prove too stringent or the conditions of the financing do not 
meet the government,s satisfaction.  IFIs are also worried 
that anti-reform elements appear to be gaining the upper hand 
within GOAJ economic decision-making circles. 
 
4. (C) Azerbaijan,s economic policy drift over the last 
decade could be remedied by GOAJ action in its economic 
decision-making structure, renewed attention to 
anti-inflationary measures and banking reform.  Over the 
medium-term, the GOAJ also must take action on the business 
climate, anticorruption measures, trade and increasing 
citizen activism and oversight of GOAJ activities.  All of 
these measures are necessary to prevent the onset of Dutch 
Disease. 
 
5. (C) The U.S. is deeply engaged in promoting economic and 
legal reform through our assistance programs and, on a policy 
level, through regular dialogue via the Revenue Management 
Group and the Joint Economic Task Force.  Given the urgency 
of economic reform and its key role in preserving stability 
in Azerbaijan, sustained, higher-level dialogue on these 
issues over the coming year will be critical to protecting 
our interests in this strategically important, energy-rich 
Muslim country in the heart of the Greater Middle East.  The 
U.S. and U.K. ambassadors lead the locally-formed Revenue 
Management Group (RMG), a high-level group of international 
donors that carries significant political and economic clout 
within the GOAJ.  A key priority of the RMG is to increase 
GOAJ awareness of revenue management and economic reform. 
Members of the RMG work to coordinate directly the various 
economic reform and assistance efforts of USAID and the IFIs 
as well as provide strategic guidance to high-level GOAJ 
officials on economic and fiscal policy items.  In 
coordination with the RMG, the U.S.-Azerbaijan Joint Economic 
 
BAKU 00000407  002 OF 005 
 
 
Task Force provides a valuable mechanism for U.S. and 
Azerbaijan economic decision makers to discuss bilateral 
economic priorities and goals.  The November 2005 meeting, 
which included the Minister of Finance, Minister of Economic 
Development and the Chairman of the National Bank, brought 
together the key GOAJ officials that directly affect economic 
policy decisions.  Continuing the active participation of 
senior U.S. and GOAJ is critical to encourage the GOAJ to 
follow a more reformist path. 
 
COORDINATION OF U.S. ASSISTANCE GOALS 
------------------------------------- 
 
6. (C) Using the U.S. Azerbaijan assistance strategy 
statement as a road-map, the U.S., in conjunction with the 
international donor community, will continue its efforts to 
lead the GOAJ towards reform and sustainable development. 
U.S. assistance objectives in Azerbaijan will focus on 
growing and developing competitive private enterprises, 
supporting a more representative, participatory and better 
functioning democracy and expanding the use of quality health 
care services and practices.  The U.S. leads all 
international donors in Azerbaijan striving to transform 
Azerbaijan's economic growth and potential into economic 
prosperity for all its citizens.  U.S. assistance targets 
improving the efficiency and accountability of public 
expenditures, improving access to credit and improving the 
business environment as well as working with the most 
vulnerable segment of the population.  Working to combat 
corruption, improve fiscal policy, develop the financial 
sector and business environment as well as working with 
grass-roots non-governmental organizations provides one of 
the most effective manners to reach underdeveloped 
Azerbaijanis in need.  Indeed, the U.S. needs to expand its 
assistance to NGOs, business associations and other civil 
society groups that are taking innovative steps to combat 
corruption, improve the business and investment climate, and 
expand government transparency. 
 
GOAJ NEEDS AN ECONOMIC ADVISORY BODY 
------------------------------------ 
 
7. (C) An easy, yet critical reform that the U.S. and the RMG 
have been pushing the GOAJ to adopt is a formalized economic 
advisory body to advise the President on economic issues. 
This body, comprised primarily of the Ministers of Economic 
Development and Finance, along with the Chairman of the 
National Bank, should take the lead in developing 
macroeconomic and budgetary policies.  Current economic and 
budgetary decision-making is disjointed, lacking in 
transparency, not properly informed and does not appear to 
include all the relevant actors.  More often than not, the 
key budgetary ministries and agencies, including the Ministry 
of Finance and Ministry of Economic Development, are not 
consulted on the budget and public investment program as 
dictated by Azerbaijani law.  Using existing U.S. assistance 
programs at the Ministry of Finance and the Ministry of 
Economic Development, and its role in the RMG, the U.S. will 
endeavor to convince the GOAJ of the importance of an 
economic advisory body before any detrimental economic 
effects occur in the economy.  Delivery of this message 
during high-level visits also would be helpful. 
 
BANKING REFORM 
-------------------- 
 
8. (C) Strengthening Azerbaijan,s banking sector is critical 
to prepare for the "Tsunami" of money coming from oil and gas 
revenues over the next decade.  The U.S. is already working 
with the National Bank of Azerbaijan to improve its banking 
supervision capabilities, but the GOAJ needs to do more to 
ensure that the National Bank plays a strong role in 
regulating and controlling the banking system.  Large 
state-owned banks, such as the International Bank of 
Azerbaijan, make it difficult for the well-managed mid-tier 
banks to be successful.  IBA,s market position also stifles 
competition and has limited the growth of banking products 
and services available to customers.  Additionally, the GOAJ, 
in coordination with the National Bank, needs to develop and 
nurture the stock market and growing securities market. 
 
9. (C) In addition to reforming the commercial banking 
sector, the GOAJ needs to take steps to strengthen the 
 
BAKU 00000407  003 OF 005 
 
 
overall role of the National Bank.  The National Bank,s job 
to combat inflation has been undercut by a 70 percent 
increase in public expenditures in 2006.  The GOAJ did not 
closely coordinate with the National Bank to determine 
economically safe levels of government expenditures prior to 
drafting the budget.  As a result, many economic and 
financial observers are expecting much higher inflation in 
the second half of 2006 and early 2007.  In addition, the 
ability of the National Bank to effectively control inflation 
using monetary policy is limited and the National Bank risks 
damaging the non-oil sector with further appreciation of the 
manat.  Senior U.S. economic policy makers need to warn GOAJ 
officials about the growing potential for a banking crisis 
and uncontrolled inflation if the system is not strengthened. 
 Visits to the U.S. for educational purposes and meetings 
with senior officials at the Treasury Department and U.S. 
Federal Reserve also would be useful. 
 
IMPROVING THE BUSINESS CLIMATE & INCREASING U.S. INVESTMENT 
--------------------------------------------- -------------- 
 
10. (C) Improving the business and investment climate is 
another goal that will promote Azerbaijan,s sustainable 
development.  Increasing competition in the economy will 
translate to decreasing costs for consumers and increasing 
opportunities for Azerbaijani entrepreneurs and international 
companies.  Court reform aimed at eliminating corruption in 
the judiciary and an emphasis on enforcement of contracts and 
judgments are important elements of improving business 
climate.  In addition, the USG should push the GOAJ to 
implement the changes in legislation and practice already 
recommended by the AmCham in its December 2005 White Paper, 
which was presented to President Aliyev.  Many of the changes 
suggested in this document would improve the business climate 
for foreign and local enterprises, and would reinforce a USG 
message that government's policies must be linked into 
feedback by civic groups, be they economic or social.  Senior 
level engagement in this area would be helpful. 
 
11. (C) The structured privatization of select public 
interests, including the national airline AZAL, the 
International Bank of Azerbaijan, and elements of State Oil 
Company (SOCAR) would begin to open the domestic market to an 
infusion of international investment, technology and 
know-how.  Senior U.S. visitors need to push GOAJ officials 
to take the hard decisions now to improve the business and 
investment climate.  One payoff for the GOAJ,s efforts would 
certainly be increased U.S. investment in the non-oil sector. 
 As in many developing countries, privatization of key state 
companies and sectoral reforms will prove intensely 
difficult.  In Azerbaijan, international financial 
institutions have attempted to table several initiatives to 
privatize key companies only to have their efforts die a slow 
death due to government inactivity.  In addition, efforts to 
diversify the banking sector have been thwarted.  By again 
leading the privatization efforts with the RMG and 
international community, the U.S. will open up additional 
markets to U.S. goods and services while strengthening the 
Azerbaijani economy. 
 
WTO ACCESSION 
------------------ 
 
12. (C) In the near-term, the GOAJ would like to join the 
World Trade Organization.  Azerbaijan,s interest may offer 
an opportunity to push for reforms while holding out a carrot 
in WTO membership.  Active engagement by U.S. trade officials 
on WTO membership may offer an incentive for the GOAJ to push 
for necessary reforms if it believes its efforts will be 
rewarded.  Any WTO reforms would have an immediate positive 
effect on the business and investment climate and would 
signal Azerbaijan,s willingness to move towards a more 
market economy.  Currrently, Azerbaijan has a fourth working 
party meeting scheduled for March 30 in Geneva.  All of the 
preparatory documents have been sent to the WTO.  While some 
weaknesses persist in the documents, Post's USTDA-funded 
accession advisor believes that the documents will allow for 
progress in the working party meetings.  Separately, Post has 
learned that USTR has agreed to begin bilateral negotiations 
on tariffs, an important step.  Azerbaijan may be planning 
other bilateral negotiations on the margins of the working 
party, perhaps with Turkey and Georgia, as well.  While the 
pace of accession is up to Azerbaijan, Post's target of 2008 
 
BAKU 00000407  004 OF 005 
 
 
remains a real possibility. 
 
REDOUBLING INTERNATIONAL ANTI-CORRUPTION EFFORTS 
--------------------------------------------- --- 
 
13. (C) Combating corruption in all its forms and supporting 
rule of law go hand-in-hand with improving the investment and 
business climate.  Corruption and non-competition practices 
through state monopolies and monopolization in many sectors 
of the economy by political-economic elite remain serious 
threats to economic growth and democratic stability in 
Azerbaijan.  The Parliament and the government have passed 
laws to combat corruption but on-the-ground inaction by 
government officials have made most laws ineffective. 
 
14. (C) The U.S. will continue to be actively engaged with 
the GOAJ to improve its record on combating corruption.  The 
government has not made a high profile arrest due to 
corruption and most corruption charges against government 
officials or individuals are politically motivated.  The 
government will need to do more to elevate the attention it 
gives to this problem, and take real action against egregious 
violators.  Senior U.S. policy makers need to highlight this 
point to the GOAJ and push for more government action.  The 
lack of transparency and accountability in public 
expenditures and abuse of government offices for personal 
gain are having a very negative effect on the growth of 
investment.  The government has also used its various 
services, for example tax department auditors, for political 
purposes. 
 
15. (C) Key to combating corruption is the strengthening of 
the state institutions that ensure the accountability and 
transparency of public expenditures such as capital 
expenditures, treasury operations, international controls in 
budget agencies, the supreme state auditor and the state 
procurement agency, all of which are deplorably weak and 
under-resourced.  This effort will prove additionally 
difficult, as the government,s Anti-Corruption Commission 
chief, Ramiz Mehdiyev, has been widely rumored to be 
associated with corrupt activities, such as using political 
influence to benefit personally.  Ironically, this person is 
also one of the few political actors that can improve 
Azerbaijan's anti-corruption record. 
 
AGRICULTURE'S ROLE IN POVERTY REDUCTION 
--------------------------------------- 
 
16. (C) Agriculture remains Azerbaijan's second largest 
sector after oil and gas, and is perhaps the best hope for 
medium-term poverty reduction in the rural regions.  However, 
development of the agricultural sector is hampered by a 
clumsy bureaucracy that at times appears unable to facilitate 
worthy development projects, as well as the legacy of a land 
privatization program that all but ensured no farmer received 
enough land to be commercially-viable.  U.S. assistance is 
active is the commercial agriculture sector with projects 
focusing on improving the business practices of pocessors 
and exporters and bringing farmers moreinto the marketing 
chain.  Post has high hopes tat three commercial farm pilot 
projects by U.S. irrigation firm Valmont will catch the full 
attention of the GOAJ.  With GOAJ support, Valmont's 
methodology has the potential to develop value-added 
agriculture in the regions and assist poverty reduction.  At 
the same time, such a success would open a large market for 
U.S. exports. 
 
ROLE OF CONSTRUCTIVE CITIZEN ACTIVISM 
------------------------------------- 
 
17. (C) Coupled with international efforts to strengthen the 
economy, improve the investment climate and fight corruption, 
is the important role Azerbaijani citizens could play in 
demanding greater government accountability and transparency. 
 Increased citizen awareness about the government,s use of 
the country,s natural resources appears to be a good 
starting point to push for full government transparency. 
Already some civil society activists are studying ideas to 
establish mechanisms to oversee governmental budgetary 
expenditures.  These groups have experience working with the 
State Oil Fund within the Extractive Industries Transparency 
Initiative and will require some backing and support from the 
international donor community.  International efforts to 
 
BAKU 00000407  005 OF 005 
 
 
increase transparency and government accountability will be 
enhanced when Azerbaijanis add their voices to the mix. 
 
COMMENT 
------- 
 
18. (C) In the short-term, Azerbaijan's wealth will continue 
to grow as more oil and gas is extracted from the Caspian and 
shipped through new pipelines to Western markets.  This 
wealth presents unique challenges to a country as poor and 
loosely regulated as Azerbaijan.  The potential for economic 
mismanagement and widespread corruption by 
government-connected elites will increase.  The U.S., in 
close coordination with the international donor community, 
will continue its efforts to lead the GOAJ towards reform and 
sustainable development.  Whether Azerbaijan is a success or 
failure over the next decade will be influenced by the amount 
of pressure the U.S. and the international donor community 
can apply to secure reforms that will lead to a stable and 
prosperous development.  In addition, Azerbaijan,s 
leadership will need to be held accountable for the proper 
administration of the country,s wealth and sustainable 
development.  A strong political will to enact hard reforms, 
along with active U.S. engagement, will be necessary in order 
for Azerbaijan to be securely on the path to an economically 
stable country. 
HARNISH