Government Should Start Reform or Resign - Expert

The position of monopolies providing services to the population of Azerbaijan has deteriorated, leading to higher prices for utilities. Such an opinion was expressed by the head of the Movement for Democracy and Development, known economist Gubad Ibadoglu in an interview with the Chetin Sual (Difficult Question) column of the Turan Information Agency.

Ibadoglu said the monopolists have obligations to international financial organizations, which they cannot perform.

"Therefore, their main goal is to collect more money from the population in a short time and to pay debts to international lenders," he said.

The expert recalled that last year, Azerigaz and Azerishyg signed a memorandum with the Asian Development Bank for a large loan.

"The credit line stated that Azerbaijan will invest 250 million USD in the project worth 1 billion USD. The main objective of the project is the development of investment opportunities in the energy sector. One of the conditions of the loan agreement is the increase in tariffs," Ibadoglu emphasized.

The economist said that he negatively assesses the increase in tariffs, as this decision is not justified and does not take into account the purchasing power of the population, or the market demand.

At the same time, it does not correctly set a limit on energy.

Regarding the consequences of this decision, the expert pointed out that they can be different: it may increase levels of poverty, limit opportunities of business, cut jobs, lower wages.

"People can refuse to pay municipal debts due to lack of money; so the government’s expectations of an increase in revenues from the population will fail,” said the economist.

According to him, particularly affected will be pensioners and low-income persons, which are about 2-2.5 million.

Ibadoglu believes that with the suddenly announced increase in tariffs, Azerbaijan violated the requirements of the Social Charter.

Referring to the need for reform, he said the Azerbaijani government is late with reforms.

 "Therefore, I believe that next year there will be new unpopular decisions of the Tariff Council," warned the economist.

"We have not lost optimism. The government thinks that there is still time for reforms and to address the current problems, but it does not understand that the reforms should have started yesterday, otherwise they will have to resign,” he said.

If the government is not aware of its responsibility and mistaken policy, and the viciousness of imitation of reforms, the situation will be "catastrophic".

"Reforms need political will and a leader, and a team, and a concept well thought out. Reforms are not carried out just by a few decrees of the non-oil sector and export promotion."

In the first 9 months, exports in the non-oil sector fell by 27% to $ 844 million. Every month, this figure is only 93.5 million dollars, whereas, even in the most difficult years for the economy of Azerbaijan, the monthly exports in this sector amounted to 150-180 million dollars.

This statistic shows the importance of the above decrees and orders, which do not play any role, the expert said. -71D-