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 growth.
“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.
