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In Azerbaijan reduced budget revenues and cuts in government spending are the result of the decline in crude oil prices, the main export of the country. The Social Watch coalition in Azerbaijan examines how these constraints can also hamper the financing of sustainable development initiatives. As crude oil prices have tumbled, a worsening of the country’s fiscal balance could gradually lead to an increase in the public debt burden and threaten fiscal sustainability in the long term. Azerbaijan’s sovereign wealth fund, SOFAZ, now has very limited profits from the sale of oil, and will contribute less to the fiscal revenues of the state as a consequence. The national state-owned oil-gas company, SOCAR, temporarily cancelled its plans for a new oil-gas refining and petrochemical complex because of the rapid fall in crude oil prices. However, at the same time, the new low oil price environment also offers an opportunity to boost a new wave of fiscal and public administration reforms in Azerbaijan.

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