Central Bank’s building and "saving" mode

Azerbaijan is moving to a new "saving" mode for the development of liberated regions. The Central Bank of Azerbaijan (CBA) will spend 450 million AZN for the construction of a new office building. This means in two foreign currencies - $ 265 million or € 218 million. The building will be built by the Turkish company Tekfen Holding.

In response to the construction of the building, CBA Chairman Elman Rustamov said that the Central Bank has transferred 7.8 billion to the state budget over the past three years and plans to transfer 256 million in 2021. The "translation" of this statement of the chief banker is that if we contribute money to the state budget and buildings can be built for other ministries, can we not build a building for ourselves with our own money?

Let's compare the cost of the office building to be built for CBA with another expenditure direction from the state budget this year. If 2.2 billion AZN will be spent on the reconstruction works in the liberated areas, why should 4-5 times more be spent on an office building in the capital alone? What is this waste?

Isn't the most magnificent building around the 28 May metro station, which is considered to be the center of the city, not enough for CBA? After all, what effective monetary policy will the CBA, which has a staff of only 600-700 people, pursue by "sitting" in a more expensive place than the current building? What problems does it help to solve when an office building is 160 meters high and 36 floors? What activities of the world-famous Central Banks of Switzerland and Norway have been limited with the 3-4-storey administrative buildings? There are many questions. But there are also clear answers.

Do you know what policy the Azerbaijani government should pursue? It must work on incentives to ensure the inflow of foreign investment into the liberated areas in order to complete large-scale reconstruction with domestic resources. Because not only the infrastructure of such regions to be built from scratch but also documents with serious institutional and strategic goals must be developed. It should consider the sources from which these documents will be financed. We must set a goal of how and in what ways to transport Baku's burden to the regions. It should announce the transition to a more serious saving mode on how to implement institutional and fiscal decentralization policies.

On the one hand, by establishing the YASHAT Foundation and collecting donations, programs are being implemented to support war-wounded and needy veterans; on the other hand, if more convenient office provision is provided for the officer corps in the luxury zone, there seems to be a great contrast between these two steps. Does the government really think that the large-scale work ahead of us can be done at such a waste?

For the building, which will cost about 0.5 billion manats, please do not think that the CBA has decided to build such a building because of increased reserves. This large amount of money will be spent on 4.2 percent of the Bank's reserves. For comparison, in the last 5 years, assets have decreased from $ 15 billion to $ 6 billion. What is driving the Bank, which has "melted" $ 9 billion in reserves during this period, into such populism?

If you "want" to spend 450 million manats to save $ 6 billion, then the financial institutions that manage 100 billion assets, sovereign wealth funds should build large office buildings for 100 employees. For example, in Norway, which has a population of 5.5 million, the Pension Fund needs to build $ 42 billion worth of high-rise skyscrapers throughout Oslo to store and manage $ 1 trillion in reserves. The wise states do not enter the race to greet God through the skyscrapers by squandering public funds, but serve the servant and save public funds! Now you see how the austerity of the West is defeated by the greed of the East?!

One of the sages was right: I went to the West and saw Islam, but no Muslims; I got back to the East and saw Muslims, but not Islam!