Azerbaijan: Less Oil, More Dependence on Oil Money | EurasiaNet.org

You might not think that money from oil would be a problem for Azerbaijan, one of the former Soviet Union’s largest energy producers. But when oil production drops, and election-year demands for money increase, the picture changes.

Next year, for the first time in its history, the country’s State Oil Fund will post a multi-billion-dollar deficit. For economists, the question is what to do about it.

Azerbaijan’s 2013 budget, up for a parliamentary vote on November 30, is expected to increase by roughly 12 percent to 19.15 billion manats or $24.4 billion. As it has since 2009, the State Oil Fund (SOFAZ), which oversees investment of the country’s oil revenues, will provide the lion’s share (59.3 percent) of that sum, via a direct transfer of 11.4 billion manats, or $14.5 billion.

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