IMF Recommendations for Azerbaijan
Concluding Statement of the 2011 Article IV Consultation Mission shows that
the key challenges in the period ahead are: (i) keeping inflation low, especially if overheating pressures intensify; (ii) preserving financial stability while addressing banking sector issues; and (iii) reorienting the economy away from its heavy dependence on oil-financed public spending, and toward private sector-led growth that is both sustainable and employment generating.
The mission recommends:
o Restraining budgetary spending to contain demand pressures that could emerge in the near term, and committing to medium-term fiscal consolidation to allow better sharing of hydrocarbon wealth across generations;
o Allowing greater exchange rate flexibility to counter inflation and lower macroeconomic volatility, and strengthening monetary policy over the medium term;
o Addressing issues at the International Bank of Azerbaijan (IBA) promptly, strengthening supervision and taking steps to deepen the financial system over the long term;
o Improving the business environment and eliminating governance constraints on private sector-led growth, especially for small and medium enterprises (SMEs).
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Doing Business in Eurasia?
Doing Business 2012 report published by the World Bank assesses regulations affecting domestic firms in 183 economies and ranks the economies in 10 areas of business regulation, such as starting a business, resolving insolvency and trading across borders. Overall ranking for the Eurasian countries are shown below. While Georgia tops the list as an outlier, most of the countries are piled up in the 60-90 range. Ukraine and Uzbekistan appear as the outliers at the bottom of the list.
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