Nakhchivan Still Living on Money from Center

The Azerbaijani government has not really cut the budget of the Nakhchivan Autonomous Republic (NAR), of which 80% is generated by subsidies from the central budget, despite the 19.1% reduction of income of the state budget for 2016.

According to the draft state budget the following year Nakhchivan’s subsidy from the central budget will be 282.4 million manats, which is 80.4% of its revenues. The grant is reduced by only 15.3 million manats or 5.2%.

Total revenues and expenditures of the state budget NAR in 2016 are projected at 351.4 million manats, of which 69 million manats will be formed by the inner potential of the economy of the autonomy.

Deputy Chairman of the NGO Promotion of Economic Initiatives Rovshan Agayev told Turan that the causes of subsidy depending of NAR from the center should be analyzed. "In 2014, production in the city of Baku was only 20% higher than in the city of Nakhchivan. However, in Nakhchivan the collection of taxes per soul of the population is four times less than in the city of Baku." According to the economist, in this case, we can consider two options: either the actual performance of the economy in the NAR is overstated and worse than the official statistics or the high level of shadow economy in the autonomous region and its tax potential are not used in full.

It is noteworthy that despite receiving investment from the central budget in the amount of 250-300 million manats annually, the state budget of NAR annually provides 35 million mantas for investment needs. Another 10 million manats is received by the Cabinet of NAR in the form of the reserve fund. Experts believe that at least two articles of the budget expenditures of the NAR in the crisis in 2016 can be cut.

It should be noted that in Azerbaijan the cities of Baku, Sumgait, Mingachevir, Shirvan and Naftalan and the Absheron and Imishli regions do not get subsidies from the state budget. ----08B