Public Finance Monitoring Center

	Nobel Laureate Speaks to Reporters About Need for Transparency of Oil Revenues
	Address: 69, Fizuly str., Baku 370601, Azerbaijan Phone/Fax: +(99412) 973172, 992014, 973089 E-mail: iakhmedov@online.az, farid@pfmc.az www.pfmc.az

November 19 - Nobel laureate Joseph E. Stiglitz told reporters Wednesday that nations should view oil wealth as part of the national endowment and as something that belongs to all citizens and generations, not exclusively to the current government or generation. Governments that use these resources for their own benefit are robbing their nations of a patrimony that belongs to everyone.

"Leaders inside and outside of government share a responsibility to promote this sense of stewardship in resource-rich countries," Stiglitz said. He added that "the desire by government leaders to control wealth generated by natural resources often discourages the development of democracy." Stiglitz was speaking at the opening of a three-day workshop for reporters on covering oil wealth and the impact it has on development.

Stiglitz, who was awarded the 2001 Nobel prize in economic science for his ground breaking work on the economic imbalances caused by asymmetric information, said that it's important for governments to release information about how much money they receive from selling natural resources and to tell the public how these monies are being spent. He also urged governments and international institutions to adopt accounting frameworks that would make it easier to trace whether economic growth is sustainable or whether it stems from the short term depletion of resources.

"Companies have strong incentives to maximize profits and the opacity that surrounds oil contracts and payments can lead to abuse and undermine stable economic development," warned Stiglitz, a professor at Columbia University in New York.

Professor Stiglitz was a member of the Council of Economic Advisors from 1993-95, during the Clinton administration, and served as CEA chairman from 1995-97. He then became Chief Economist and Senior Vice-President of the World Bank from 1997-2000. His book, Globalization and Its Discontents, (Norton June 2001) has been translated into 20 languages and is an international bestseller. His new book, The Roaring Nineties-A New History of the World's Most Prosperous Decade, was published in New York in October.

The event is being organized by the Initiative for Policy Dialogue, an international network of economists based at Columbia University in New York and by the Public Finance Monitoring Center in Baku.

Speaking during the morning session, Public Finance Monitoring Center director Inglab Akhmedov discussed "The Impact of Oil Income on the Economy of Azerbaijan."

Akhmedov also stressed the importance of transparency and said it's important for governments to work to diversify the economy so as to lessen national dependence on resource wealth.

Some 25 Azeri and Georgian reporters attended the event, held at the Radisson SAS Plaza. The discussions were moderated by Professor Sahin Alpay of Istanbul's Bahceshehir University and journalist Andrew Finkel, also based in Istanbul.

The conference is being held to help reporters enhance their coverage of the effects that resource wealth can have on Azerbaijan and to raise awareness about the need for improved transparency and corporate governance.

Managing oil wealth is a challenge for developing and transition countries that are lucky enough to have these resources. Nations need to decide how they can deal with influxes of large revenues without producing distortions of income inequality, corruption, misallocation of resources and macroeconomic imbalances such as high inflation and low growth. Reporters attending the workshop will participate in discussions about the effect that oil wealth can have on other countries and learn about how other countries have coped with these development challenges.

The event was being held on November 19, 20, 21 in Baku. The event is part of a series of workshops and meetings being planned by Caspian Revenue Watch. CRW is part of the Open Society Institute and in June released a report "Caspian Oil Windfalls: Who Will Benefit?" (The report can be found at www.eurasianet.org/caspian.oil.windfalls)

The Public Finance Monitoring Center was responsible for organizing the logistics of the meeting and inviting local reporters to participate. IPD journalism training director Anya Schiffrin prepared the program, invited the guest speakers and will be responsible for follow-up activities. IPD has a website for journalists who cover finance and economics which can be found on www.journalismtraining.net

The event is being funded by the OSCE, the Open Society Institute (courtesy of the East-East Program and the Network Media Program) and the Initiative for Policy Dialogue.