Diminished Returns: Managing Oil Revenues in Azerbaijan

This is one in a series of case studies that illustrates the principles of the Natural Resource Charter.

Oil-rich Azerbaijan has failed to avoid the risks associated with oil producing countries. Revenues are accumulated in a national oil fund, set up in 1999 to effectively manage the country’s oil wealth. Despite its transparency, the fund lacks accountability. The main risk is the government’s spending, which is too high and of poor quality. With oil and gas revenue expected to decline in 2015, the government will be hard pressed to finance its current expenditure and achieve sustainability in the future.