Experts call on the government to take urgent measures

Famous representatives of the expert community of Azerbaijan called for urgent measures in the country's economy in light of the impending crisis, and in the fall in world oil prices. Extensive discussion of the economic situation took place on 22 January at the round table: "Reducing the price of oil on the world market and the possible impact on Azerbaijan economic crisis in Russia." The debate took place on the initiative of the Movement for Democracy and welfare of Azerbaijan (ADR) in the international press center.

Although the proposal of the  president of the  research NGO “FAR Center” Hikmet Hajizadeh  on adoption a manifesto reflecting the views of the participants of the round table was not accepted,  the speakers agreed to continue further consultations.  The participants  of the debate MPs, SOCAR and experts recognized the problems due to the fall in oil prices.

"The budget is formed on the basis of $ 90 per barrel, and in spite of our observations on trends in the global markets, the government considered it a temporary downturn,"  said the deputy, former Deputy Prime Minister, Vahid Akhmedov.

The head of the  ADR, Gubad Ibadoglu, said that the dependence of the local economy on oil exports is high, despite assurances from the authorities to diversify the economy. By 1 December of the previous year's state budget revenues from the non-oil sector totaled only 3.9 billion manat (about $ 5 billion) -only a quarter of the total budget revenues. The remaining 75% comes from oil and gas sector.

State Budget of  2015 includes $ 19.5 billion manat ($24.8 billion) revenue and more than 21 billion manat ($26.7 billion.)  Excluding transfers from the Oil Fund the budget deficit could reach nearly 15.5 billion manat ($19.7 billion.)  It is a measure of the risks which the economy could face under low oil prices in the coming years," said Ibadoglu.

In his view, the welfare of the population will largely depend on the ability of the national economy to adapt to the operation in the new environment - the fall in world oil prices and the crisis in Russia. "Otherwise, strongly will be affected not only consumers, but also small and even medium-sized businesses,"  he said. In 2015, significantly reduced  income of physical persons , as well as legal persons employed in small and medium-sized businesses.

Ibadolgu also noted that the fate of the national currency, manat, will depend on the timing and magnitude of the fall in oil prices. With long-term maintenance of low oil prices and a rise in the dollar, it will be impossible to maintain the stability of the manat.  "The depreciation of the ruble and cheaper oil have a negative impact on the solvency of the population," said Ibadoglu.

As an immediate step, the experts recommended the government to optimize costs, as well as initiate reforms on de-monopolization and decentralization of the economy, the provision of economic freedoms, the legalization of the shadow economy. -0-