Mortgage Lending in Azerbaijan: State Agency’S Role

2/ 2010 THE US-EDUCATED AZERBAIJAN ALUMNI ASSOCIATION MORTGAGE LENDING IN AZERBAIJAN: STATE AGENCY’S ROLE INEKE BOTTER: “BAKCELL IS A VIBRANT PLACE FOR YOUNG PEOPLE TO WORK” URBAN RESTRUCTURING OF BAKU CITY CENTER: PROBLEMS AND APPROACHES EURO 2 STANDARDS IN AZERBAIJAN: FROM PLANS TO ACTIONS ELEMENTS OF ALTERNATIVE ENERGY POLICY AND IMPLEMENTATION IN AZERBAIJAN THE US-EDUCATED AZERBAIJAN ALUMNI ASSOCIATION 2/ 2010 EDITOR’S LETTER 3 Editor-in-Chief: ELEMENTS OF ALTERNATIVE ENERGY POLICY AND IMPLEMENTATION IN AZERBAIJAN Dr. Anar Valiyev by Randall Baker 4 Editorial Board: Fuad Aliyev LONG-TERM ECONOMIC DEVELOPMENT Vusal Khanlarov PROSPECTS AND CHALLENGES OF AZERBAIJAN Emin Huseynzade by Ramil Maharramov 10 Yusif Axundov Parvana Bayramova Vugar Allahverdiyev MORTGAGE LENDING IN AZERBAIJAN: Fuad Jafarli STATE AGENCY’S ROLE Fariz Huseynov by Fariz Huseynov 18 Art-Director Iman Huseynov “BAKCELL IS A VIBRANT PLACE FOR Photo YOUNG PEOPLE TO WORK” Interview: Ms. Ineke Botter, CEO, Bakcell Ltd. 24 Tofig Babayev URBAN RESTRUCTURING OF BAKU CITY CENTER: PROBLEMS AND APPROACHES © AAA. The thoughts and by Leyla Sayfutdinova 26 opinions of the authors does not represent AAA’s opinion AZERBAIJANI BUSINESS IN 21st CENTURY: FROM CORPORATE PHILANTHROPY TO CORPORATE AAA Office at American Center, SOCIAL RESPONSIBILITY Azerbaijan University of Languages, by Ahad Kazimov 32 1st Floor, 60 Rashid Behbudov St., AZ1014, Baku, Azerbaijan EURO 2 STANDARDS IN AZERBAIJAN: FROM PLANS TO ACTIONS Tel.: (+99412) 441 01 72 by Rza Aliyev 36 E-mail: [email protected] www.aaa.org.az “ECOLOGICALLY CLEAN” PRODUCT by Nailya Aliyeva 38 EDITOR’S LETTER 2/ 2010 Dear Readers It is my great pleasure to introduce the second issue of Context magazine published by the American Alumni As‐ sociation. As you know 2010 was declared the Year of Eco ‐ logy in Azerbaijan. The government of Azerbaijan, public and private organizations have been implementing several large‐scale projects across the country. In order to raise awareness to the problem of environment in Azerbaijan, Editorial Board has decided to dedicate several articles of the current magazine to environmental issues. In his article Professor Randall Baker from New Bulga ‐ rian University touches on problems of alternative energy and policies that Azerbaijan should implement in order to diversify its energy production and protect environment. Leyla Saifutdinova’s article gives us good overview of urban restructuring of Baku and problems of green space and urban transformation. Rza Aliyev in his article tried to analyze policy implications for Azerbaijan to switch to Euro‐2 standards. The last but not least article on that topic is dedicated to ecologically clean products. Written by Nailya Aliyeva, article helps us to understand the advan‐ tages of production of organic goods. Other articles are also interesting for general reader. Fariz Huseynli’s piece on mortgages analyzes this market in Azerbaijan and gives his recommendations. Ramil Maharramov’s article on eco‐ nomic development brings our attention to necessity to invest into non‐oil sector in order to diversify economy and insure the country’s economy from future economic turmoil. Ahad Kazimov’s article on corporate social respon‐ sibility gives useful recommendations on how to forge cooperation between corporations and public sector. Editorial Board of Context welcomes all readers and hope that the second issue of the magazine would shed the light on some problems, challenges and opportunities facing our society. Dr. Anar M. Valiyev, Editor‐in‐Chief CONTEXT | 3 ELEMENTS OF ALTERNATIVE ENERGY POLICY AND IMPLEMENTATION IN AZERBAIJAN ELEMENTS OF ALTERNATIVE ENERGY POLICY AND IMPLEMENTATION IN AZERBAIJAN Randall Baker, PhD, Distinguished Professor, New Bulgarian University, Sofia Emeritus Professor, School of Public and Environmental Affairs, Indiana University, Bloomington, USA 4 www.aaa.org.az 2/ 2010 INTRODUCTION Following the volatile changes in the price of oil on the world market in the middle of the first decade on this century, and the concerns about the possible cli‐ mate‐change implications of the continued burning of fossil fuels putting more “greenhouse gases” into the atmosphere, there has been a surge of interest in the introduction and expansion of alternative and renewable energy (ARE) in many countries. Despite the perceived failure of the Copenhagen Conference on Climate Change in 2009, countries are proceeding with national policies. The UK, for instance, intends to produce 40% of its electrical energy this way by the year 2020, and has introduced a carbon‐based budget‐ ing system. The problem is, however, not national but global, and those producing most of the carbon dioxide and other greenhouse gases are not necessarily those that will suffer most. The case of small‐island, low‐lying states such as the Maldives face possible obliteration and produce almost no greenhouse gases. This is a classic case of trying to tackle a global problem in a world made up of some 200 national sovereign states, often thinking first about their own interests or finding Randall Baker is a Distinguished Professor what they see as equity in a global solution. The at the New Bulgarian University in Sofia, Bul‐ contrast ing perspectives of China and the USA are garia. He was born in Wales in 1944 and is holds very significant in this regard. There is no executive a PhD from London University based on research global management system, and that is unlikely to in East Africa during the mid 1960s. He went on change in the near future. to become a co‐founder and dean of the School of Other factors inhibiting a major and global change Development Studies at the University of East include: Anglia in the UK, and was also affiliated with • The enormous amount of sunk costs and existing Cambridge University. infrastructure built on the exploitation of fossil fuels. He became Professor and Director of Interna‐ This adds an element of inertia to the present situation tional Programs at Indiana University’s School of and distorts the economics of introducing new sys‐ Public and Environmental Affairs in 1985. He tems in a world equipped to run on such fossil energy. spent time with the World Bank, Asian Develop‐ The introduction of ARE competes with exploration ment Bank, Unesco and helped create schools and for more oil supplies, for instance in West Africa, the departments of higher education in Bulgaria, Falkland Islands etc, to keep the old system running at Bolivia, the UK, Bolivia, Azerbaijan and several extremely low retail cost to the consumer. countries in Africa. He is the author of 17 books • The separation of the cost of finding, refining and and many articles, the most recent of which was delivering fossil fuels, and the costs of the damage published by Moscow State University in 2010 done by their combustion (externalized costs) so this and is entitled Environment: Science, Policy and separates cause and effect. Value, which is also the title of his newest book to • The long‐standing prejudice against the develop‐ be published in October of 2010. He has been a Ful‐ ment of a nuclear option, with countries such as Bul‐ bright and Rockefeller scholar, and holds honorary garia being forced to close down this option for some degrees from several universities. time even though it produced the great bulk of its elec‐ tricity. This fear arises from incidents like Three‐Mile Island and Chernobyl, distrust over assurances about safety and the problem of safe storage of nuclear‐fis‐ sion waste, which has a half‐life of around 25,000 years. This prejudice is beginning to ease with the percep tion of the risks associated with the price CONTEXT | 5 ELEMENTS OF ALTERNATIVE ENERGY POLICY AND IMPLEMENTATION IN AZERBAIJAN volatility and possible consequences of a world based Elements of the “Dutch Disease.” on fossil fuels. • Some skepticism about the nature of risk in con‐ The revenue, especially from hydrocar‐ tinuing with the present energy‐use model. There are bons, accrues initially to the state sector in well‐organized campaigns, particularly on the net, de‐ crying the “evidence” of climate change in general, terms of royalties, including fees for the and human causation in particular. This aspect was passage of energy via pipelines over the sharpened strongly by the revelation of “distortion of the statistics” by the Climate Research Unit at the Uni‐ national territory. Some jobs are gene ‐ versity of East Anglia, which was providing key “evi‐ rated, but relatively few directly in the dence” to the Inter‐Governmental Panel on Climate Change (UN) immediately prior to the Copenhagen context of the size of the revenue. The conference. The public at large ends up confused and cynical about authoritative statements regarding cli‐ govern ment, then, has a major task of mate change, especially as this same public would “making the revenue work,” in terms of have to bear the immediate cost and changes of life‐ style commensurate with making the change to ARE. job creation, incentives, infrastructure • Arguments about the costs of licensed techno ‐ crea tion and the like. logy enabling developing countries to make the change. Nearly all these licenses are held by rich This situation has an in‐built tendency countries. to favor the big and quick fix—huge high‐ • The political process that has a much shorter time‐horizon than science because of election timeta‐ ways and public buildings, grandiose bles. In addition, the voting public tends to focus on improve ment of facilities, and the genera‐ immediate crises rather than preventative action. Legis lators are reluctant to go against the attitude of tion of endless bureaucratic “make‐work” their constituents, and that inhibits leadership with a long‐term perspective. It is not necessarily the case, in jobs. This works against more modest, and the USA for instance, that the public sees the energy long‐term options.

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