The Country Environmental Analysis,presents a review of environmental priorities, publicenvironmental expenditures and the supporting institutionalframework and makes recommendations to improve theefficiency and effectiveness of public environmentalexpenditure in Azerbaijan.The focus is to identify areasfor improvement and changes to ensure that the process ofestablishing environment-related priorities is sufficientlycomprehensive. The report concludes that investmenteffectiveness is key to environmental improvements andwithout significant political backing, monitoringenvironmental progress will continue to be based onindividual project records. Also, without a clear decisionon monitoring, the State Environmental Program will fallshort of its potential.The report makes specificrecommendations to fulfill the objectives and address thechallenges identified.