Rovshan Agayev: "It Is Wrong to Say 33 Regions of Azerbaijan Will Pay Their Expenses"

In reality, it is wrong to say that 33 districts of Azerbaijan pay their expenses, believes the economist Rovshan Agayev. The economist in his blog said the clarification to the state budget of Azerbaijan for 2017 indicated that the number of districts paying their expenses increased from 6 in 2016 to 33 in 2017. Agayev said the local expenditures for 2017 reduced by 2 from 1.541 billion AZN to 718 million AZN. The local revenues for 2017 are predicted at AZN 642.4 million against AZN 766.3 million in 2016.

“So there is no local income growth that could pay the costs. The fact is that 98% of local expenditures are directed mainly in four areas - education, health, the maintenance of regional executive bodies and local offices of ministries and state committees, and the running of cultural and sports facilities of local importance. In turn, 60% of local expenditures regard education, and the government will separate the expenditure on education from the local ones in 2017,” Agayev said.

He noted that next year the district education departments will be transferred to the regional format, in connection with which the local education spending in 2017 will be considered as expenditure of the central authorities.

According to the expert, according to this logic, if we take healthcare costs from the regional expenses and transfer them to the central government spending, the figure for self-supporting districts can reach 50.

"In a realistic assessment, at least half of the 16 billion AZN of the budget expenditure is actually spent locally, but at the same time it is not considered local. If we group the budgetary costs on the areas where they are actually spent, local revenues will not cover even 10% of the costs. In this qualification only Baku can generate income to repay the expenses," Agayev wrote.

It should be noted that on September 29 the Ministry of Finance posted on its official website the draft state budget for 2017.

Budget revenues are projected at 15.9 billion manats and expenditures are projected at 16.6 billion manats.  ----71D