Income - in the Red

Baku / 30.04.17 / Turan: Fall of people's living standards continues in Azerbaijan. According to independent research, in this March the real disposable money income of the population (the amount that remains on hands after all mandatory payments adjusted for inflation) decreased by 2.5%. A month earlier, the decline was another 3.8%, as a result of the growth of consumer prices against the backdrop of the fall in the manat rate against the dollar. This trend continues from 2015.

Meanwhile, according to the State Statistics Committee, the average monthly nominal wage in the country on March 1 was almost 500 manat, which is 5.9% more than the same period last year. At the same time, the highest wage was recorded among workers in the mining sector, financial and insurance activities, information technology and communications, and in construction.

According to the head of the Center for Sustainable Development Studies Nariman Agayev, the authorities use this indicator to reduce the degree of discontent in society, presenting statistics on the growth of nominal wages, although it would be useful to indicate the real incomes of citizens in order to analyze the real situation in the country. This is fraud, manipulation of figures, which misleads the population. The overwhelming majority receive less salary: the final figure is distorted by data on a narrow stratum (oil workers, IT workers, builders, civil servants) with high incomes. In fact, 55% of the population does not have salaries of more than 420 manat, and a third - less than 350 manat.

"The financial crisis that erupted in Azerbaijan in 2015, dealt a severe blow not only to the banking sector, but also to the incomes of citizens. Reductions and dismissals of employed have affected both private business and government agencies. In addition, many banks and companies have reduced salaries, and in a number of ministries they have removed salaries in envelopes. In addition, prices for food, non-food products, and utilities increased substantially. According to the estimates of independent experts, taking into account the purchasing power of the population and the level of inflation, the incomes and salaries of citizens, compared to last year, fell by another 20%," Agayev said.

Tracing the dynamics of wages and inflation, it can be noted that the purses of citizens of the country "lose weight" for 25 consecutive months, which is a record of statistics since the 1990s. During this time, the population has become poorer by 13%, and the standard of living has fallen at times.

First of all, the losses are borne by pensioners and socially unprotected layers of the population, as it follows from statistics. This is evidenced by the data provided by the Minister of Labor and Social Protection Salim Muslimov at a meeting on April 24 with the members of the American Chamber of Commerce (AMCHAM Azerbaijan), where he noted a sharp increase in poverty in the country. According to him, the agency pays out 316.3 million manat monthly to citizens. The funds are transferred to 1,319 million pensioners, 466,400 beneficiaries of various benefits and 546,000 members to 130,800 families receiving targeted social assistance.

In other words, 2511.4 thousand citizens or almost 25.6% of the population receive support from the state. In fact, every fourth citizen is on welfare from the state

According to Doctor of Economic Sciences Vugar Bayramov, before the devaluation, the average wage of 500 manat in dollar equivalent was 612 US dollars, today this amount is 300 US dollars.

In the ranking of the CIS in terms of average salary Russia ranks 1st and Kazakhstan – 2nd place. Armenia gained a foothold in the third position, pushing Belarus to the 4th position. Azerbaijan dropped to the 5th place, becoming an outsider among the countries of the South Caucasus.

The decline in the standard of living forms a vicious circle in the economy, independent experts note. The fall in the real expenditures of some economic entities leads to a drop in the incomes of others, and the latter, by reducing consumption, stimulate a further drop in the incomes of the former. -0-