xxxxxxxxxxWorld Bank: Azerbaijan's economy is instable because of dependence on oil prices

The World Bank's new report entitled "Diversified Development" expressed concern regarding the economy of Azerbaijan. In particular, they noted instability, reduce of use of labor resources and low productivity.

"The oil revenues are accumulated in the state budget and in the oil fund, but because there is no formal mechanism for revenue management the governmental revenues are associated with the current level of oil production, and as a consequence are dependent on unstable oil prices," the document reads.

According to the report, although the unemployment rate in 2002 fell from 10% to 5% in the 2012th, it took place due to the workforce reductions.

"And finally, although the productivity has increased tenfold within 10 years, its level is still below the average of middle-income countries," notes the WB.

According to the World Bank experts, Azerbaijan should reduce instability, create jobs and increase productivity.

It is noted that in Azerbaijan, the physical capital is low, probably due to the lack of contributions from the private sector, despite the fact that after the oil boom in 2005 the Government announced the infrastructural investments prior.

Besides, the World Bank emphasized the low level of training of the staff in Azerbaijan. The health care sphere in Azerbaijan brigs in only 1% of GDP, which is the lowest in Europe and Central Asia.

"Azerbaijanis are the least satisfied in the region in public services than, while the country is in the first place in corruption," concludes the World Bank.