As a Caspian littoral state, Azerbaijan is capitalizing upon the Seas sizeable, but still mostly untapped, hydrocarbon resources. Azerbaijans real gross domestic product (GDP) grew by an impressive 26 percent to $13 billion in 2005 as foreign investors pushed ahead with major projects in Azerbaijan. Foreign direct investment in the country contracted from $2.3 billion in 2004 to just under $500 million in 2005 largely due to the completion of construction on the BTC Pipeline in Azerbaijan. In the next couple years favorable real GDP growth is expected, but maintaining low inflation rates as energy and transit revenues flow into the country represents a major challenge. In the meantime, Azerbaijan is struggling to overcome the economic collapse that followed independence from the former Soviet Union, as the countrys GDP contracted by almost 60 percent from 1990 to 1995. By 2000 and 2001 wages were increasing around 20 percent each year, and by the end of 2005 the average monthly wage was around $125. Still, according to the International Monetary Fund (IMF), almost 45 percent of the population lives below the poverty line. Azerbaijan has drawn over $120 million (as of April 2006) from an IMF-run Poverty Reduction and Growth Facility program in Azerbaijan that has helped re-structure the countrys economy and alleviate economic hardships. Azerbaijans hope for future economic growth rests in large part with successful development of its Oil and Natural Gas resources in the Caspian Sea region and through effective management of the resulting revenue stream. After the first commercial oil flows through BTC during Summer 2006, oil revenues will contribute to a doubling of Azerbaijans GDP by 2008. Azerbaijan will have drastically higher oil revenues than ever before, and although the country has effectively managed a $1 billion oil fund, bankers and investors question whether Azerbaijan can manage an oil fund that could eventually be worth $100-200 billion (depending on the oil price).To manage the revenues, former president President Heydar Aliyev created a State Oil Fund in 1999, which is designed to use money obtained from oil-related foreign investment for education, poverty reduction, and efforts aimed at raising rural living standards. As of the end of 2005, the State Oil Fund reported assets of $1.3 billion, but the funds assets are expected to almost double during 2006. Please see a recent paper in Geopolitics of Energy for more information on the effects of energy revenues on Azerbaijan.