Baku, Azerbaijan, May 8, 2003—The Swiss
State Secretary, Mr. David Syz, and the Executive Vice President
of the International Finance Corporation, Mr. Peter Woicke, today
announced a new project to improve corporate governance in Azerbaijan.
The Corporate Governance Project is a joint initiative between IFC, the
private sector financing arm of the World Bank Group, and the State Secretariat
for Economic Affairs of Switzerland.
IFC will provide advice to the government of Azerbaijan on improving the
legislative framework for corporate governance and offer consultations
to Azerbaijani companies and banks on corporate governance. IFC will also
work with training institutions in Azerbaijan on the inclusion of corporate
governance in their curricula. In addition, IFC will conduct a broad
education campaign among government agencies, private companies, financial
institutions, and the general public on the importance of corporate governance
and its relevance to Azerbaijan. The State Secretariat for Economic Affairs
of Switzerland seco will support these efforts with a $2.1 million grant
through the end of September 2006.
Corporate governance refers to the structures and processes for the direction
and control of companies. Good corporate governance contributes to sustainable
economic development by enhancing the performance of companies and increasing
their access to outside capital. This is particularly important to
emerging economies and can play an important role in stimulating economic
“IFC’s worldwide experience as an investor has taught us that good corporate
governance is a crucial component of the investment climate and something
for which investors are willing to pay a premium. Our experience in implementing
corporate governance projects in this region and elsewhere has demonstrated
that improved corporate governance at the firm level and improvements in
the regulatory framework can stimulate investment,” commented Mr. Woicke.
“IFC is pleased to offer our expertise to Azerbaijan and support the country’s
efforts in building a vibrant private sector.”
Mr. David Syzof seco noted, "Based on Switzerland’s in-depth knowledge
of Azerbaijan, a country we represent in the Bretton Woods institutions,
we believe that improved corporate governance practices in Azerbaijan’s
companies and banks will increase the transparency of the corporate sector
and lead to much needed investment and financing. Corporate governance
is critical to the development of a positive investment climate,” he said.
The Corporate Governance Project in Azerbaijan builds on successful IFC
cooperation with seco, as well as Canada and the Netherlands, in Russia
and Ukraine, where IFC has worked with government and companies to improve
corporate governance. In Ukraine, IFC has seen that almost half of
the companies participating in a similar project were able either to attract
partners or financing or to begin serious negotiations.
The mission of IFC is to promote sustainable private sector investment
in developing countries, helping to reduce poverty and improve people's
lives. IFC finances private sector investments in the developing
world, mobilizes capital in the international financial markets, helps
clients improve social and environmental sustainability, and provides technical
assistance and advice to governments and businesses. Since its founding
in 1956 through FY02, IFC committed more than $34 billion of its own funds
and arranged $21 billion in syndications for 2,825 companies in 140 developing
countries. IFC's worldwide committed portfolio as of FY02 was $15.1 billion
for its own account and $6.5 billion held for participants in loan syndications.
Switzerland participates in the international community’s efforts to help
transitional countries build stable democracies and viable market economies.
Each year, Switzerland spends approximately SFr 1.5 billion on development
aid around the world, or about 0.34 percent of its gross national product.
This is a testimony to Switzerland’s belief that long-term global security
and prosperity can be achieved only by narrowing the gap between developed
and transitional countries.
As for seco, its economic development cooperation program has four main
objectives: (1) to help transitional countries reach the stage of development
most favorable to growth and investment; (2) to mobilize private sector
resources as a means of increasing the flow of finance to the transitional
countries, as well as technology transfer; (3) to improve the productive
and social infrastructure; and (4) to achieve greater integration of developing
countries in international trade.