Restructuring or Degradation of the Energy Sector
By Sona Taghiyeva, Oil Workers Rights Protection Organization
The creation of the Tariff Council in the frame of Ministry of Economic Development has become
a result of the policy on restructuring Azerbaijan’s energy sector. This step was widely welcomed
by the International Financial Institutions, such as the Asian Development Bank (ADB). This Council has been given the right to formulate and apply tariffs on all consuming energy resources and all public utilities. From the beginning of its activity, electricity tariffs were increased three times but the quality of the services remained the same.
The poor were forced to deprive themselves of electricity. During winter, it became a reason for the felling of numerous trees which has been the “green” basis of Azerbaijan. Accordingly, ADB’s policy has been directed to the restructuring of the country’s energy sector, accompanied with tariff increase, which not only threatens social security but the ecology as well.
As a result of IFIs’ projects, many state bodies became joint-stock companies where all the assets belong to the government. The structure, institutional basis and activities of these joint-stock companies have become even less transparent to the public than it were before. At the same time, essential positive changes were not observed.
We suggest that the ADB should participate in the modernization and restructuring of governmental bodies into joint-stock companies by purchasing of shares during financing of the energy sector. It can help in internal administration as well as in fighting corruption. After making the company competitive in the market economy, the ADB will sell the shares back to the government for the same price as it was before the restructuring.
Regional cooperation
In connection to ADB’s support for interregional energy trade, it is important to note that special attention should be given to the promotion of ecological safety of the Caspian Sea when it comes to financing projects directed towards strengthening the cooperation between Azerbaijan and Central Asian countries.
Since the ecological condition of the Caspian Sea is under threat for being the main transportation route for energy supply, it is suggested that the ADB should come up with a special strategy which would consider all the difficulties and nuances of the region. In particular, special attention should be paid for the conservation and protection of the biodiversity of the Caspian Sea. Although, not all five Caspian countries are members of the ADB, it would still be possible to come up with a common strategy for the three-member countries, namely: Azerbaijan, Kazakhstan and Turkmenistan.