Real Economy Needs Real Budget Support

The procedure of parliamentary approval of the draft state budget for 2013 starts. Milli Majlis committee recommended the document for discussion by giving it epithets "academic", "balanced", "social purpose". Most adequate assessment of the bill was given by the Economic Policy Committee Vice-Chairman MP Vahid Ahmadov.

According to him, against the background of the financial crisis in Europe, when the current government debt is more than half of the public debt, increase both in the revenue and expenditure of the budget of Azerbaijan by 2.1 billion manat with a slight deficit forecast looks normal. Social spending increased 25% and investment in projects - 35%. The budget reflects the wage growth for about 700 thousand representatives of the public sector. Calculation of revenue, based on an oil price of $ 100 per barrel (politics of producing countries will not allow price to fall below this mark), is normal and will let implement social projects.

To pay compensation for deposits in the Soviet Savings Bank 500 million manat was allocated. The expenditure doubled three times for a variety of positions. "If we do not take into account the unacceptable facts related to the housing problem and the level of payments for the needs of mortgage (40 million or approximately one thousand apartments with a much larger demand), the budget is normal. Today in Baku, especially in new, "Stalin" and "Khrushchev" buildings, all the apartments are more expensive than 30,000 AZN offered by banks. So on mortgage there are three proposals - to raise the bar for individually allocated budgets, reduce the initial payment and reduce interest payments."

Of particular concern is the investment part of the budget. AZN 6.9 mln is allocated for this purpose directly from the budget and 2.2 billion comes from the transfers from the State Oil Fund. Finance Minister spoke about the protocol of joint activities with the Accounting Chamber of Azerbaijan, but these measures cannot guarantee the transparency of the huge expense. We need precise execution of the law "On financial control".

The budget for next year includes a greater degree of inflation risks - believes the deputy. Today the political process has more influence on stability than economic processes. However, Azerbaijan has a solid "cushion" of financial security that would keep the annual inflation rate of 5-6%. MP personally do not advocate unsafe "financial buffer pads."

Speaking of the meager spending on science, Akhmedov believes the logistics should be improved. Local scientists must show promise of their achievements, and then the question of increasing contributions to the needs of science will be relevant.

Today, attention must be paid to the real non-oil sector of the economy. The next year, the oil component of the budget will decrease by 4.5%, and to compensate this, the Oil Fund will increase contributions to the budget from 9.9 bn this year to 11.3 bn next year. This growth can not last forever. The most promising area is agriculture and processing of its products. Azerbaijan has good potential in this area. - 17D-