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‘The Empty Bucket of the State Oil Fund of Azerbaijan: Profits and Profiteering’ Report Highlights the Heavy Dependence of the Azerbaijan’s Economy on Volatile Oil Prices

Washington, D.C., Release:  March 18, 2020  

The new report The Empty Bucket of the State Oil Fund of Azerbaijan: Profits and Profiteering co-authored and produced by Crude Accountability launches online March 18, 2020.

The report focuses on the economic, social, and political implications of Azerbaijan’s oil revenues for over two decades.  The report pays specific attention to the operations of the State Oil Fund of Azerbaijan (SOFAZ), established in 1999 in order to manage Azerbaijan’s oil wealth. To date, SOFAZ remains a strong influence on, and the main contributor to, the country’s economy.

The report provides an analysis of the Fund’s saving and investment practices, and Azerbaijan’s state budget and expenditures, and presents concrete policy and economic recommendations for the future.  The research findings are especially relevant today, as the global oil market crisis can have a detrimental effect on Azerbaijan’s economy, which is so heavily dependent on oil prices.

The report is co-authored by Gubad Ibadoghlu, visiting professor at Rutgers University and Senior Policy Analyst for social and economic studies at Azerbaijan’s Economic Research Center, a Baku-based NGO that promotes economic development and good governance.

“Right now, the Azerbaijani economy is facing the risk of being fiscally unsustainable, dependent on external shocks; the national currency is in danger of devaluation,” says Gubad Ibadoghlu.

“The primary purpose of the report is to demonstrate the poor management of oil and gas revenues in Azerbaijan, the unfair distribution of oil and gas revenues, and the risks of assets being invested without transparency and accountability,” adds Dr. Ibadoghlu.  

The report is divided into three parts: analysis of the SOFAZ budget, analysis of how oil profits are spent, and a look into the impacts of the spending on Azerbaijani society. In-depth analysis of the fund’s investments, and the country’s annual budget lead to conclusions that oil revenues have not reduced the unemployment rate, have not alleviated poverty, and have not liberalized, diversified, or modernized the national economy.

“This report answers a very basic question– what has been done with over $100 billion of oil money spent in Azerbaijan? Who has this $100 billion benefitted? Certainly not the Azerbaijani people. The Azerbaijani government, while hosting lavish international sports events, squandered a unique opportunity and responsibility to improve the socio-economic situation in the country for ordinary citizens. Instead, this money only fueled the fire of corruption and authoritarianism,” says Sonia Zilberman, South Caspian Energy and Environment Director for Crude Accountability.

The Empty Bucket of the State Oil Fund of Azerbaijan presents concrete policy recommendations that would improve transparency of oil revenues, reduce waste and corruption, and ensure the intergenerational equality of hydrocarbon profits.

The report is available online to view and download:

The executive summary:


Stay tuned for the report’s offline launch.

Sonia Zilberman, Director, South Caspian Energy and Environment, Crude Accountability,,, +1.202.320.6225

Elena Sorokina, Communications Manager, Crude Accountability,,