How to eliminate social tension?

Baku/08.06.22/Turan: Economist and secretary of the REAL party Natik Jafarli,   comments on in the “Difficult question” program the recent local protests in front of various government agencies, the expression of dissatisfaction by citizens on social networks with the increase in ticket prices for AZAL, recent arrests by law enforcement agencies as part of the fight against corruption, and other events on the agenda

According to him, there are several figures in Azerbaijan, which reflect the social situation in the country and which the government itself recognizes.

“One of them is the official indicator of inflation. The rise in prices, according to the president himself, exceeds 18%. Food inflation has reached almost 20%. This is a serious figure and in itself is an indicator of the aggravation of the social situation - the real incomes of citizens are declining and although the manat exchange rate remains unchanged, its purchasing power is falling, which naturally causes serious social discontent,” he said.

Regarding salaries, the economist noted that in addition, the size of the median salary (a value that divides the entire number of jobs into two equal parts: 50% are paid below this value and 50% - above) in Azerbaijan is 405 manats.

“Imagine that the number of employees in Azerbaijan exceeds 1 million 700 thousand people and half of these people receive only AZN 405 or less. This means that there are approximately 850-900 thousand low-paid citizens in the country. There are 1 million 300 thousand pensioners in the country; 90% of them receive an allowance of about 300 manats. These figures are not presented by the opposition, they are recognized by the authorities. And these figures themselves show that there are serious social tensions and problems in the country,” the economist noted.

The expert also noted that the methodology for calculating the average salary in Azerbaijan does not meet international standards. Since, it is announced not by industry, but in general.

“Conventionally, there are about 10 industries where wages are high. These are oil and gas, banking, logistics and other areas. But they have a small number of employees. For example, there are about 10,000 employees in the banking sector, but salaries there are decent - around 1,000 manats.

And what is the government doing? It calculates the average salary in these 10 conditional industries, add and divide by 10, finding the arithmetic mean and present it as the average salary. Although over 300,000 people work in the field of education, the salary in this area is very low - within 300-400 manats,” he explained.

Commenting on the rumors about the upcoming increase in salaries, Jafarli noted that the revision of the state budget by the Milli Majlis (MM) is expected.

“It is assumed that next week or during the current month. MM will review the revenue and expenditure parts of the state budget. Since oil prices on the world market have risen, instead of the expected $6.3-6.4 billion, Azerbaijan's income from it, if current prices are maintained until the end of the year, will amount to about $14 billion. Although this will not directly affect the formation of the state budget, it will have an indirect impact. Since they are reflected in the consolidated budget. Since, regardless of oil revenues, the state budget is formed by transfers from the State Oil Fund. According to our data, the growth of the state budget should amount to AZN 1.5 billion. However, the lion's share of these funds will be used to increase the funds allocated for the restoration of the territories liberated from occupation. This year, 2.2 billion manats were allocated from the state budget for these purposes. Most likely, this amount will be increased to 3 billion manats,” the expert suggested.

As for the possibility of raising salaries, in his opinion, they will not increase significantly. “Perhaps they will slightly increase the minimum wage or increase the salaries of state employees by 3-5%. However, this is not a way out of the current situation. If a normal market economy is not created in the country, a free competitive environment does not appear, then the increase in wages and pensions will only spur inflation,” Jafarli is convinced.-0—