GOAJ PREPARING FOR SUCCESSFUL INAUGURAL

UNCLAS BAKU 001799

SIPDIS

SIPDIS
SENSITIVE

DEPT PLEASE PASS TO EB ASSISTANT SECRETARY DANIEL SULLIVAN
DEPT PLEASE PASS TO USTR SHAUN DONNELLY, PAUL BURKHEAD AND
BETSY HAFNER
TREASURY FOR ASSISTANT SECRETARY CLAY LOWERY, DAS NANCY
LEE, AND JEFF BAKER
USAID FOR DREW LUTEN

E.O. 12958: N/A
TAGS: ECON EFIN PREL EAID EAGR ETRD EINV AJ
SUBJECT: GOAJ PREPARING FOR SUCCESSFUL INAUGURAL
U.S.-AZERBAIJAN ECONOMIC PARTNERSHIP COMMISSION

REF: (A) BAKU 1721 (B) BAKU 1403 (C) BAKU 1176

SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET DISTRIBUTION -
PLEASE HANDLE ACCORDINGLY


1. (SBU) Following up on her November 30 meeting with
President Aliyev (REF A),Ambassador Derse met separately
with Minister of Finance Samir Sharifov and Minister of
Economic Development Heydar Babayev to discuss the February
2007 inaugural U.S.-Azerbaijan Economic Partnership
Commission and to provide a draft agenda for discussion.
Both ministers strongly welcomed the EPC and committed to
organize a meeting of relevant government ministries and
agencies to review the agenda and coordinate practical goals
and objectives for the EPC.


2. (SBU) Both Minister Sharifov and Minister Babayev agreed
that raising the U.S.-Azerbaijan economic dialogue to a
senior policy level discussion would facilitate real results
and engagement. During the meeting with Minister Sharifov,
the Ambassador reviewed possible deliverables, including the
announcement of the U.S.-financed Treasury Information
Management System roll-out and follow-on at the Ministry of
Finance. Minister Sharifov took close note of the possible
deliverables, writing down several possibilities. Sharifov
also told the Ambassador that he would change his vacation
planned for February in order to lead the GOAJ's delegation.
Minister Babayev, who met with the Ambassador in between
meetings with President Aliyev, also reviewed the objectives
of the EPC and indicated that he would meet with his team to
coordinate policy goals and objectives.


3. (SBU) The GOAJ is interested in having the EPC help
Azerbaijan address its serious macroeconomic policy
challenges and develop a longer term development strategy for
the country. According to both ministers, the GOAJ
recognizes that it is facing huge energy revenue inflows, but
lacks the experience and technical know-how to manage this
challenging environment. Azerbaijan needs advice and regular
consultations on this challenge and needs advice to craft a
sensible long-term development strategy. To its credit,
Azerbaijan has committed to use its new wealth to rapidly
improve standards of living for the Azerbaijani people by
accelerating Azerbaijan,s economic diversification,
development and integration into the international economic
system.


4. (SBU) As soon as the GOAJ provides substantive comments to
the agenda and possible deliverables, we will forward them to
the Department.
HYLAND