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Viewing cable 06BAKU510, CABINET OF MINISTERS REPORTS TO PARLIAMENT ON 2005

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Reference ID Created Released Classification Origin
06BAKU510 2006-04-04 09:14 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Baku
VZCZCXRO1398
RR RUEHFL RUEHLA RUEHMRE RUEHROV RUEHSR
DE RUEHKB #0510/01 0940914
ZNR UUUUU ZZH
R 040914Z APR 06
FM AMEMBASSY BAKU
TO RUEHC/SECSTATE WASHDC 0036
INFO RUCNOSC/ORGANIZATION FOR SECURITY COOPERATION IN EUROPE
UNCLAS SECTION 01 OF 02 BAKU 000510 
 
SIPDIS 
 
DEPT FOR EUR/CARC 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958:N/A 
TAGS: PHUM KDEM PREL PGOV ECON AJ
SUBJECT: CABINET OF MINISTERS REPORTS TO PARLIAMENT ON 2005 
RESULTS 
 
 
SENSITIVE BUT UNCLASSIFIED - HANDLE ACCORDINGLY 
 
1. (SBU) SUMMARY: On March 14 the Prime Minister presented 
the Cabinet of Minister's report on its 2005 activities, 
similar to a "State of the Union" address. As expected, the 
GOAJ comments and data were very positive: GDP and average 
salary increased, government reforms continued, state 
credits continued to be successfully channeled to the 
development of entrepreneurship, privatization yielded 
positive results and more schools were built, thereby 
developing the education sector. The report lacked substance 
beyond economic data and offered little in the way of new 
policy objectives or political analysis.  Hinting at a more 
activist approach, new Speaker of Parliament Osadov called 
upon the GOAJ to change the report's format and be more 
responsive to issued raised by MPs.  While some opposition 
MPs criticized the GOAJ for leaving out key sectors in the 
report, the general public seemed to take little notice of 
the Cabinet's accounting.  END SUMMARY. 
 
2005: ANOTHER SUCCESSFUL YEAR 
----------------------------- 
 
2. (U) The Prime Minister reported that GDP increased in 
2005 by more than 26 percent (USD 12.6 billion) due to 
successes in the oil sector and agricultural production. The 
GOAJ also reported that about 169,000 new jobs were created, 
out of which almost 80,000 were permanent. Poverty decreased 
from 40 percent to 30 percent (NOTE: The decrease in poverty 
levels may be tied to recent adjustments in poverty 
calculation methodology.) Aggregate currency reserves of the 
State Oil Fund and the National Bank increased 30 percent, 
equaling USD 2.4 billion. External debt levels fell to 12 
percent of GDP, from 22 percent of GDP in 2004. The Prime 
Minister said that these figures all indicated the 
successful policies of the GOAJ during the year and that the 
current path of reform should continue in order to keep 
Azerbaijan on its positive trajectory.  The majority of the 
report focused on rote economic statistics with little new 
policy plans or analysis of the political arena.  Notably 
absent were reports from the security ministries, including 
the Ministry of Defense, Ministry of National Security, 
Ministry of Justice, and Ministry of Internal Affairs. 
 
LOYAL MPS APPLAUD THE REPORT 
----------------------------- 
 
3. (SBU) Ruling Yeni Azerbaijan Party (YAP) and pro- 
government independent MPs used their allocated time to 
commend GOAJ activities and express their satisfaction with 
the report itself. Only a few MPs, including Siyavush 
Novruzov (a leading YAP MP), pointed out minor problems such 
as a shortage of information other than purely economic 
data. Despite the positive comments from pro-governmental 
MPs, Speaker of Parliament Ogtay Asadov said he was 
disappointed that the report did not include solutions for 
the existing problems; he also noted that it is not clear 
how effectively the Cabinet addresses issues raised by 
Parliament.  In a heartening show of independence, Asadov 
called for a change in format of the report and asked that a 
separate chapter be included devoted to the issues MPs raise 
during hearings. 
 
OPPOSITION CONSIDERS REPORT INCOMPLETE 
-------------------------------------- 
 
4. (SBU) The few opposition MPs in Parliament were the only 
ones who gave extensive, concrete critiques of the report. 
Some complained that problems faced last year with energy 
supplies, the agricultural sector, and price increases were 
not covered by the report. Others, including Jamil Hasanli 
(former PFP member, elected from the Azadliq Bloc) also 
criticized the Cabinet of Ministers for not including 
reports from law-enforcement ministries, therefore 
preventing a public debate of their activities.  The Speaker 
defended this approach, saying that the country is still in 
a state of war, so an open discussion would be 
inappropriate.  However, the Speaker did offer to entertain 
the idea of a closed-door hearing with those ministries. 
 
5. (SBU) Igbal Agazadeh from the opposition Umid (Hope) 
Party criticized last year's activities of the Cabinet of 
Ministers. He said the GOAJ did nothing to solve problems in 
the energy, education, agriculture, or other sectors of the 
economy. Agazadeh specifically said that the agricultural 
sector has great potential but is still not utilized to its 
full extent. Agazadeh was also concerned with the recent 
increase in prices and inaction of GOAJ to prevent 
 
BAKU 00000510  002 OF 002 
 
 
inflation. In general, he called the report a document on 
"success stories" that does not address the problems facing 
Azerbaijan. 
 
6. (SBU) In an interesting note, Gudrat Hasanguliyev (a pro- 
governmental small party MP) expressed concern about the 
GOAJ's level of readiness to deal with the potential inflow 
of refugees if Iran were attacked by the United States. 
Hasanguliyev called on the Foreign Ministry to report on its 
activities to address this problem. 
 
REPORT ON ANOTHER "SUCCESSFUL" YEAR 
----------------------------------- 
 
7. (SBU) The report was approved with only 10 votes against 
from opposition MPs.  While the report created a day's worth 
of debate in Parliament, the general public took little 
interest.  Some speculate the lack of interest is because 
the reports exaggerate facts and offer few solutions to the 
problems facing the country.  As a result, the GOAJ's annual 
report received poor coverage in the media and few were 
heard discussing it on the streets of Baku. 
 
HARNISH