Practice and Application of Oil Funds : Azerbaijan and Kazakhstan as Case Studies in Addressing the Dutch Disease

This is a study of the issues of economic growth, structural changes, and wealth management in oil-rich transition economies with reference to the cases of Azerbaijan and Kazakhstan. The main research rationale is to analyze the potential consequences of wealth, such as the Dutch Disease and to show the role of oil funds in preventing uneven economic development in a resource-rich country with implications for policymakers of the two countries. The main goal behind establishing such funds is to keep natural resource revenues separate from other state revenues in order to neutralize the effects of high income inflows on real exchange rates, exports and non-resource sectors of the economy, and/or to ensure intergenerational equity. Although both Azerbaijan and Kazakhstan have established oil funds to avoid the potential dangers of the paradox of plenty, there still remains a lot to be done to accomplish this objective