IFAD President: We expect to increase financing to Azerbaijan

How do you assess the food security situation in the world and, particularly, in Azerbaijan?

First, I must say that this was a fruitful visit to Azerbaijan, as there was an opportunity to meet with the agriculture minister, prime minister and Azerbaijani president. Thus, I have a good picture of the efforts made in the development of the country's agriculture.

I am very impressed with the progress achieved in Azerbaijan in a very short time - since the country became an independent. Although the country's wealth was formed by the proceeds from oil and gas sector, the agriculture, as Azerbaijani President Ilham Aliyev said, is a priority for the development of non-oil sector. The strategy is essentially to invest massively in the agricultural sphere, as almost 45 percent of Azerbaijan's population lives in rural areas.

Is IFAD ready to expand operations in Azerbaijan? How much the fund intends to invest in the country in the medium term?

To date, we have financed four projects in Azerbaijan, the implementation of two of which have already been completed, and two - still in progress. Total cost of these four projects was $111 million. We have new projects that are expected to be launched. The IFAD Board of Directors is expected to adopt one of them in December. IFAD will provide $20 million for this project, IDB - $ 65 million and the remainder accounted for the participation of the Azerbaijani government in the project. Thus, we expect the implementation of new agricultural program worth nearly $100 million. The project will start in 2011. The document will be approved and signed as soon as we finish our discussion with Azerbaijan.

How do you assess the development of agriculture and food security in Azerbaijan in terms of the ongoing crisis?

Azerbaijan is much focused on the development of a strong agricultural base. The country has the ability to produce various kinds of foodstuffs and crops, as your country has nine climate zones. Thus you have the ability to grow any kind of crop (grain). There are also countries around you that have needed your farm products. Thus, you have not only markets for agricultural products, but also opportunities for domestic demand. Therefore, the potential for the development of your agriculture is very high.

The country has a very solid foundation in the form of oil revenues. But despite this, the government believes in long-term investment in agricultural development. I believe you have a very good position to expand your development as in the oil, and as well as in non-oil sector, agriculture, industry, transport, roads and other infrastructure with this philosophy and strategy. Today, Azerbaijan carries out the construction of two large reservoirs to ensure access to water, which is very important for agriculture.

Have the global economic crisis affected the fund's activities and the funding volumes on the part of your organization?

We agreed the funds that we need to implement programs and projects in the period from 2010 to 2012 with the IFAD members in December 2009. This allows us to implement several programs and projects worth $ 3 billion in the world. The potential impact of the current crisis will be from 2012 to 2015. We forecast that we may fail to achieve the same level of investment if the crisis will continue in 2012 due to financial and fiscal problems in the world. But at this time, it had no impact on our commitments and the programs in Azerbaijan or in other parts of the world.

Even before the global crisis, IFAD announced about suspension of favorable funding for projects in Azerbaijan, referring to the level of economic development in the country. Is it possible that after the crisis your organization will again return to this issue?

No changes are expected in terms of the fund's financing in Azerbaijan in the next five years. Azerbaijan has a possibility to obtain funds for a joint program of IFAD with IDB. This program is designed for 5 years at a total cost of $ 100 million. In addition, IFAD is expected to allocate $20 million for the period from 2010 to 2012, while the country received $5 million from 2007 to 2009. I can not predict what will happen in subsequent years - from 2013 to 2015. Funding of operations in Azerbaijan could increase, or may fall. The funding levels will be reduced if the member countries, which invest in IFAD, waive fees.


/Trend/