Continuing Work at the Credit Union
I wrote a bit about getting started here at the credit union in this post. I think I covered the basics rather well: 1) We’re trying to move towards electronic records for their accounting; 2) We want to rewrite the business plan both in Azerbaijani and in English, expanding it and making it appropriate for international use; and 3) One day, the World Bank project will end–Apparently it’s not now, in January, but it will happen eventually. Since members don’t keep their money with us, and we’re really just a loan organization, we need to find a more sustainable funding source, preferably in-country.
Elşən continues to work out the money-lending, while I sit in the office moving the books over to Excel. This means I’ve got a decent amount of time to think about what’s happening. A few ideas I’ve had so far:
First, I’ve met with the head of the Azerbaijan Credit Union Association. He’s willing to do a lot to keep this credit union scheme going, which I think is a good thing. I think instead of having a lowly Peace Corps Volunteer come to one credit union and try to move their books over, we could probably arrange some national training events that would involve showing the CU accountants how to use Excel, and then how to use Microsoft Access, to maintain their records. This would be a big step in saving time, and therefore money, when it comes time to create reports, mark records, and do audits. This would make credit union operations smoother, as well as make easier the job of the monitoring folks from the World Bank. And maybe international funders would find it appealing to see that the credit union system is off paper, and on to digitalia.
The second big idea isn’t original at all. Instead, it’s the same idea as anyone has had about oil and gas money coming in. Azerbaijan isn’t the biggest producer, but they have enough petroleum to make you notice. As any development economist knows, oil creates strange problems in any given economy. Commonly known as “Dutch Disease”, instead of creating positive growth in the domestic economy, the discovery of oil means that lots of international currency comes into the country, driving up demand for domestic currency and creating inflation. And only a handful of people get rich. It becomes more difficult to do import and export activities, and domestic prices for goods go up while Joe Azerbaijani’s salary stays the same. You can see this happening in Azerbaijan. Relative to other developing countries I’ve been to, notably Thailand, things are a lot more expensive here.
So what does one do with all that oil money? Well, I suggest that the credit union association take a very small piece of that pie to plow back into development of the non-oil economy. Starting with farmers is great. They could probably also expand to other small businesses in the area. The service economy around here could use a boost. In this way, they could fund a sustainable growth strategy using the money they acquire from oil companies and oil profits and gas profits. As I’m sure you can infer, I am not the only one with such an idea. Everyone wants some oil money, right?