TRANSPARENCY SNAPSHOT

Azerbaijan was among the first countries to endorse the Extractive Industries Transparency Initiative. An NGO coalition to improve EI transparency was formed in 2004, and it quickly became a part of the global Publish What You Pay (PWYP) coalition. The government has taken another important step toward transparency by publishing annual reports from the State Oil Fund of Azerbaijan (SOFAZ).

Despite this progress, many local activists acknowledge that the implementation of the EITI has yet to provide adequate information to hold the government fully accountable. Recent efforts at economic modernization have been hampered by continued increases in public spending, and slowness to improve the business climate or deepen financial intermediation. And though EITI membership makes SOFAZ the government's most transparent body, Azerbaijan remains in the bottom fifth in corruption rankings by the World Bank and Transparency International. Furthermore, 29% of the population continues to live in poverty, including 8% in extreme poverty, according to the World Bank.
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EXTRACTIVE INDUSTRIES

Azerbaijan's main natural resources are petroleum and natural gas. In 2007, oil production rose to approximately 860,000 bbl/d and net oil exports exceeded 700,000 bbl/d, making Azerbaijan the largest contributor to non-OPEC supply growth in 2006-2007. However Azerbaijan remains a net importer of natural gas. In 2006 natural gas production was estimated at 241 billion cubic feet while domestic gas consumption totaled 400 Bcf. Combined, Azerbaijan's mineral economy represents roughly 46% of the country's GDP and 90% of merchandise exports.
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