IMF MISSION, AZERI OFFICIALS DISCUSS USE OF OIL INCOME

Text of report by Azerbaijani news agency Media-Press

Baku, 27 May: The IMF mission has discussed in Baku the long-term strategy of management of oil income in Azerbaijan, the reform of the country's financial system and the raising of the price of domestic oil to be level with world prices. John Wakeman-Linn, head of the IMF department for the Middle East and Central Asia, said at a news conference.

The aim of the mission was to reach a agreement with the Azerbaijani side regarding these issues, Wakeman-Linn said. It is planned, he said, to use oil income to improve economic infrastructure - roads, irrigation, health and education facilities. Oil income might lead to tax reduction in the non-oil sector of the economy, he added. Reforms in the financial sphere will first of all be aimed at reducing monopolies and developing competition in banking, he went on to add.

The reform of the National Bank is aimed at ensuring the bank's independence and a transparency in its activities, Wakeman-Linn said. The mission also discussed the terms of bringing the domestic oil price up to match world prices. The current system of forming domestic oil prices, which is based on subsidies, will be replaced, he said. Particularly, there will be a transfer from the misuse of subsidies and funds to the gaining of real income which in turn will be aimed at achieving specific purposes. "These measures will lead to the reduction of poverty in the country," Wakeman-Linn said.

Source: Media-Press news agency, Baku, in Russian 1000 gmt 27 May 04

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