Azerbaijan Floods Situation Report No.3

Situation Report
Originally published
REG. NO. 97/0344

Rain and flood update.
OXFAM surveyed Women in Prison.
Azerbaijan signed the Gold Contract.


During the month of August, heavy rains and flooding caused substantial damage to property, infrastructure and crops in various regions of the country. The government, NGOs and UN Agencies have responded with an integrated relief assistance programme. The government allocated about USD 8 million and NGOs and donor agencies have contributed approx. USD 1 million to address the problems caused by the calamity. The total damage, as estimated by the government, is USD 60 million. In the meantime, the government has also repaired/rehabilitated the HEPS (Hydro Electric Power Station) in Mingechevir (north-west region). This HEPS was partially damaged during the 4 July heavy rains. An FAO consultant visited affected areas to assess damage caused to crops and is expected to produce his final report in September.



UNDHA chaired three emergency meetings in the past month to coordinate emergency assistance programmes for flood victims. The meetings were attended by representatives of the government, UN, NGOs and donor missions. UNDHA chaired the Monthly Inter-Agency Meeting on 4 August, attended by the Deputy Prime Minister (also the Chairman of the State Emergency Commission). A major topic of discussion during the inter-agency meeting was the rain and flood situation in the country. The DPM expressed his satisfaction that the rapid response by the UN, NGOs and donor agencies had significantly alleviated the suffering of those affected by the calamity.

Economy and Energy

The Ministry of Finance (MoF) announced that, in the first half of 1997, foreign investment in Azerbaijan totaled USD 591 million, (twice as much in comparison with the corresponding period of 1996). During the same period, the volume of income tax collected in GDP terms increased from 1.5 percent to 2.2 percent and the profit tax exceeded its forecast amount by 55 percent. Although the country has consistently reported a positive trade balance, various sources revealed the average level of the shadow economy to have reached at least 40 percent of GDP. For the first seven months of 1997, the MoF reported a budget deficit equal to 2.7 percent of the republics GDP. The Republics GDP has, however, expanded by 5.7 percent compared to the corresponding period in 1996. Oil revenues totaled 32 percent of the country's export market. Turkey, Iran and Russia remained Azerbaijan's leading trade partners during the first eight months of 1997.

Oil production from the International Oil Consortium's (AIOC) stationary platform Chirag-1" is expected to commence on 7 November 1997. Export of the oil through the western route (Baku-Grozny-Novorossisk) has been placed in doubt due to delays in rehabilitation of the pipeline through Chechnya. The government has, however, indicated that alternative contingencies might be made should the route not be ready to ship oil by the due date. Press reports indicated that bilateral tensions were mounting between Azerbaijan and Turkmenistan over ownership of the Kyapaz oil field in the Caspian Sea. Azerbaijan issued a warning against foreign oil companies operating in Azerbaijan from bidding for a stake in the Kyapaz field from the Turkmenistan Government.

On 21 August, Azerbaijan signed a Production Sharing contract for the exploitation of gold, silver and ore mines with an American Investment Group - RV. The agreement was witnessed by the President of the Republic who announced that the agreement would allow the production of 400 MTs of gold, 2,500 MTs of silver and 1.5 million MTs of ore over a 25 year period. The contract will entail an investment of USD 0.5 billion.

The government announced gas price increases of 40 percent by the end of 1997. It was also announced that consumer prices during the first seven months of 1997 had dropped by 1.1 percent. The August minimum food basket was estimated at USD 29 per person.

Vulnerable Populations

The IFRC reported that distribution of food parcels to 30,000 elderly pensioners living alone was underway in 61 districts of Azerbaijan. The distributions would cover practically all the non-conflict districts of Azerbaijan. Funding for the programme comes from ECHO through the Netherlands Red Cross Society. The total value of the food distributed during August was USD 420,000. ADRA (US PVO) and ICRC also distributed food parcels to approximately 210,000 other categories of the vulnerable population in Azerbaijan.

Women in Prison

A lawyer attached to OXFAMs Women in Prison (WRDA) programme conducted a site visit of prisons housing women in August. The survey will be used to determine and establish a data base of prison conditions and information on disability, refugee status, age, nature of offense, etc. To date, three prisoners have been assisted in appealing against their sentences. A number of women from outside Azerbaijan (Georgia - 3, Russia - 17 and Ukraine - 5) are also being assisted in lobbying the respective governmental authorities for the transfer of these women to their home countries. To date, three Russian women have been transferred. WRDA is currently lobbying the Georgian Parliament through its human rights wing for the Georgian prisoners.


Despite the heavy rains and flooding, grain harvests in the lowland areas of the country have escaped serious damage - approximately 93 percent of the total arable land has been harvested. Approximately 1.06 million MTs - which is 72 thousand MTs more than last year - have been harvested. The improved crop yield has been attributed to the increased use of arable land and improved technology. The later harvest in mountainous areas is continuing and the Ministry of Agriculture (MoA) is expecting another 40,000 MTs from those areas.

Harvest of early grapes also began in August. The MoA estimated that 250,000 MTs of grapes will be collected from 83,000 hectares of land (50,000 MTs less than production in 1996). The lower production is attributed to crop damage by heavy rains and increased preference of farmer's for the production of wheat - a more profitable crop in 1997 due to higher demand and improved marketing structures.

EU/TACISs RARP-1 project (partnership fund) has been extended from February 1998 until March 1999. Funds for the target farmers and traders are channeled through 18 Commercial Banks and, as of August, USD 278,000 out of an original USD 2.5 million loaned to the farmers/traders has been recovered. GTZ recently started a new project to support the agricultural reform process focused on legal reform and the development of an extension training programme for farmers in cooperation with the Agricultural Institute in Ganja.

Rehabilitation of Liberated Areas

The World Bank allocated a technical credit of USD 1.3 million for rehabilitation work in TerTer district, which suffered infra structural damaged as a result of N-K conflict. Relief International (US PVO) constructed 38 limestone houses in TerTer district in August and OXFAM completed electrification of houses built in 1995 in the district. The government of Azerbaijan also reported that the European Union had pledged ECU 4 million for similar work in Agdam district. ECHO has also commenced a rehabilitation of houses programme in Fizuli district, dividing the destroyed houses into two categories -C-1 and C-2. Under the C-1 (major damage) category, ECHO has completed 31 houses and under the C-2 (lesser damage) category, begun work on 18 August with a projected reconstruction plan of six houses per week. IRC (US PVO) completed construction of five houses in Fizuli during August. IRC also rehabilitated two schools in Fizuli during the month.

Small Enterprise Development

The government of Azerbaijan and the NGO community are taking appreciable initiatives in developing the small enterprise sector. On 23 August, a meeting of the Coordination Council on the implementation of the Programme of the State Assistance to the Small and Medium Enterprise in Azerbaijan, was held. Decisions on promoting local manufacturers, the setting-up of an expert commission to help improve the production and marketing, and the creation of a training centre to prepare the rural and urban entrepreneurs were taken during the meeting. In the meantime, the government has announced that, by August 15, it had privatized 11,000 small enterprises in the country.

The NGO communities have also been very active in developing the sector. As at August, WVI had assisted in the establishment of some 1,300 small businesses since the inception of the project in 1995. In tandem, the IFRC continued with its income-generation project for 190 families in seven camps. The Danish Refugee Council started its small-scale enterprise development programme in the Baku/Absheron areas. Likewise, about 10 international NGOs have been involved in small-to-medium enterprise development programmes throughout Azerbaijan.

This report is available on the internet through RELIEFWEB:

United Nations Office in Baku, Azerbaijan
Mr. Paolo Lembo
Tel.: (0099412) 92 24 92
Fax: (0099412) 98 32 35

Inter-Agency Support Branch (IASB) - Geneva
Mr. David Bassiouni - Chief
Ms. Sylvia Ferazzi
Tel.: (41 22) 788.1402
Fax: (41 22) 788.6386
Registry E-Mail:

Complex Emergency Division (CED) - New York
Mr. David McLachlan-Karr
Tel.: (1 212) 963.0226
Fax: (1 212) 963.1388

Press to contact (DHA-Geneva)
Ms. Madeleine Moulin-Acevedo
Tel.: (41 22) 917.2856
Fax: (41 22) 917.0023
Telex: 414242 DHA CH