This paper presents the findings of a study on budget transparency in Kazakhstan and Azerbaijan carried out in 2004. Special attention has been given to how the Parliament participates in the budget decision-making process, on its interaction with the government, and with respect to public awareness. The methodology is based on approaches developed by the International Budget Project of the Centre for Budget and Policy Priorities (Washington, DC). The topic is especially crucial for oil-rich countries in order to limit public spending waste and corruption. Unsurprisingly, it has been found out that the content of the draft budget in both countries failed to comply with requirements for comprehensive information. Draft budgets did not contain information on quasi-fiscal activities, financial and nonfinancial assets of the government, tax exemptions, or the range of budget programme beneficiaries, which left more leeway for discretionary measures and possible fraud or corruption. A positive development in budget preparation in Azerbaijan was the legal requirement to publish a draft budget in the mass media after its submission to the parliament. In Kazakhstan, the absence of such a requirement led to the provision of incomplete information to the public in statements of some members of the government and the parliament, and therefore in publications and in the mass media. Along with the draft budget, the government of Azerbaijan had to submit to the parliament reports on budget implementation for the previous two financial years. Budget implementation was the most open stage of the budget process in Kazakhstan. In Azerbaijan, the Ministry of Finance prepared current and annual reporting documentation on budget implementation for administrative use only, and did not publish it. In 2010, not much has changed, especially for Kazakhstan. This country’s Open Budget Index 2010 score is 38 out of 100, which is less than the average score (42) for the 94 countries surveyed. Its score is also significantly below the average score (49) of the other countries assessed in the Former USSR ( Kazakhstan’s score indicates that the government provides the public with minimal information on the central government’s budget and financial activities assessed by the Survey. Kazakhstan’s OBI score did increase slightly (from 35 to 38) between 2008 and 2010 whereas Azerbaijan’s OBI score increased from 37 to 43 points from 2008 to 2010, since the country now provides more comprehensive information in its In-Year Reports and Audit Report. However, in both cases “this makes it extremely difficult for citizens to hold the government accountable for its management of the public’s money,” which is problematic at the time where major public investments are carried out in both countries.

Gaël Raballand, Observatory of Post-Soviet States, Paris
CER: II-7.3.C-614