World Bank launches new partnership strategy with Azerbaijan

The Country Partnership Strategy is a central document defining the World Bank Group's support to Azerbaijan to meet the country's key development challenges, including reducing poverty, modernizing infrastructure, and improving governance and social services. The CPS guides all Bank operations in the country – lending, analytical work and technical assistance.

The new partnership strategy covers a four year period from 2007 to 2010, and envisages a lending program of US$1.26 billion, both in IDA and IBRD financing, as well as an active IFC program. Knowledge-sharing, analytical and advisory activities and development partnerships will reinforce these investments.

"This Country Partnership Strategy comes at a juncture when Azerbaijan is experiencing an important natural resource boom which is enabling it to move rapidly from lower income to middle income country status. This provides tremendous opportunity, but also presents major challenges for the country," said Donna Dowsett-Coirolo, Country Director for Azerbaijan, Armenia and Georgia.

"The CPS is a demand-driven partnership plan based on the needs and priorities defined by the Government of Azerbaijan, which is determined to move quickly and decisively in using its increasing wealth to deliver clear results on the ground to its population. This will involve accelerating structural reforms, strengthening public sector governance and institutional capacity, and careful prioritization and efficient execution of a now much larger public investment program, and the World Bank and other international partners can be helpful in supporting this agenda."

The CPS supports the main objective of the government's long-term program to reduce poverty and achieve the Millennium Development Goals (MDGs) by fostering economic diversification and growth, particularly in the non-oil sector, while maintaining macroeconomic stability; improving health, education and infrastructure services; strengthening social protection; and addressing important environmental issues and implementation of the climate change agenda.

The Bank Group's new Country Partnership Strategy reflects the objectives of the State Program for Poverty Reduction and Sustainable Development (SPPRSD) for 2006–2015, and rests on four pillars:

Pillar I: Improving the quality and transparency of public sector governance, by maintaining a stable macroeconomic framework that makes prudent use of oil revenues; improving public expenditure planning and management; strengthening financial management and procurement systems; establishing proper public sector and corporate governance, accounting, and auditing; creating an administrative and regulatory environment conducive to growth; and strengthening the judicial system.

Pillar II: Supporting sustainable and balanced growth of the non-oil economy, by expanding access to financial services; improving the business environment and, through IFC, providing direct investments and technical assistance to strengthen the private sector; developing essential infrastructure and services, with special attention to both the rural economy and Central Asia-South Caucasus-Black Sea regional transit routes; and, strengthening the financial viability and efficiency of the utility sectors.

Pillar III: Increasing the quality of and access to social services, by expanding coverage of good-quality health care services; developing a modern education system and globally competitive knowledge economy; effectively targeting social assistance; creating a more transparent, affordable, and sustainable pension system; and improving living conditions and economic opportunities for internally displaced people.

Pillar IV: Improving environmental management and furthering the climate change agenda, by cleaning up legacy pollution, reducing carbon emissions, and promoting biodiversity; supporting more sustainable natural resource management in selected areas; and strengthening natural disaster management.

The CPS contains a detailed monitoring framework, with clear indicators and benchmarks against which the success of implementation of the program will be measured in close consultation with the government, private sector, civil society and other international partners. APA