AZERBAIJAN: NATIONAL BANK DIRECTOR GENERAL

C O N F I D E N T I A L BAKU 000724

SIPDIS

SIPDIS

E.O. 12958: DECL: 05/16/2016
TAGS: EFIN ECON PREL PGOV PINR AJ
SUBJECT: AZERBAIJAN: NATIONAL BANK DIRECTOR GENERAL
APPOINTED NEW EXECUTIVE DIRECTOR OF OIL FUND

REF: BAKU 602

Classified By: CHARGE D'AFFAIRES JASON P. HYLAND PER 1.4 (B,D).


1. (C) SUMMARY: The Government of Azerbaijan announced May 15
the appointment of Shahmar Movsumov as Executive Director of
the critically important State Oil Fund. Movsumov succeeds
Samir Sharifov, who was named Minister of Finance on April

18. Movsumov, a close Embassy contact, speaks excellent
English, and is held in high esteem by the international
donor community. The appointment of Movsumov as Oil Fund
Executive Director indicates the GOAJ's continuing shift
toward Western leaning, English speaking ministers and
officials. Movsumov's appointment, however, leaves current
National Bank Chairman Elman Rustamov isolated and may signal
his imminent removal. END SUMMARY.


2. (C) After nearly a month of speculation, the GOAJ
announced May 15 the appointment of Shahmar Movsumov as the
new Executive Director of the Oil Fund. Movsumov replaces
Samir Sharifov, who is currently the Minister of Finance
(reftel). Movsumov, age 34, had previously been working as
Director General of the National Bank of Azerbaijan.
Movsumov's appointment also ends speculation that the Oil
Fund would be transferred to the Ministry of Finance with
Sharifov.


3. (C) Movsumov is a graduate of the Moscow Institute of
International Relations and in 2004 he earned a Master's
degree in Public Administration from Harvard University.
Movsumov is a close Embassy contact, speaks excellent
English, and is held in high esteem by the international
donor community. His professional characteristics make him
similar to the former Oil Fund Executive Director and current
Minister of Finance Samir Sharifov.


4. (C) The appointment of Movsumov as Oil Fund Executive
Director, predicted in reftel, reflects the GOAJ's continuing
shift toward Western leaning, English speaking ministers and
officials. Executive Director of the Oil Fund is a critical
position for the government's international public relations.
As an established institution, the Oil Fund is operating
transparently and an international accounting firm audits its
energy revenue reports. The Oil Fund is working with the
U.S. Trade Development Agency to improve its portfolio
management and is unlikely to undergo any radical changes
with Movsumov. Movsumov's appointment highlights GOAJ
recognition of the need for an Oil Fund leader who is
comfortable with both the international donor community and
sovereign debt rating agencies, projecting confidence that
Azerbaijan's oil and gas revenues will be managed correctly.


5. (C) Movsumov's appointment, however, leaves current
National Bank Chairman Elman Rustamov isolated. President
Aliyev appointed Rustamov to another five-year term in early
2005 and there has been widespread speculation that he could
be the next government official to be removed. Movsumov is
not an obvious government insider and has been known to
disagree with GOAJ macroeconomic and budgetary
decision-making. His appointment to the Oil Fund means that
if Rustamov is removed as National Bank Chairman, Movsumov
will not be considered as a possible successor leaving the
position open for another President Aliyev confidant,
possibly current International Bank of Azerbaijan Chairman
Jahangir Hajiyev (who accompanied President Aliyev on this
recent trip to Washington).

COMMENT
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6. (C) President Ilham Aliyev continues to consolidate his
economic team, shifting power away from old-guard, clan-based
allies of the former president. While Movsumov is not known
to be a friend or acquaintance of Aliyev, he certainly fits
the mold of the recent appointments of Minister of Economic
Development Babayev and Finance Minister Sharifov -- English
speaking, comfortable with Western interlocutors and known to
be "problem-solvers."
HYLAND