Elman Rüstəmov

Elman Rüstəmov


- Akram bey, the Milli Majlis agreed to allow Elman Rustamov to be a member of the Board of the Central Bank again. Why Elman Rustamov? Was there no other candidate in Azerbaijan who knew banking?

Əkrəm Həsənov- Elman Rustamov is a man of extraordinary luck. He is not suitable for the position he holds according to any indicators. He is a random person! He is just someone who is in the right place at the right time. Imagine that Rustamov, who had no banking experience, was appointed first deputy chairman of the Central Bank by the Elchibey government at the age of 40. In 1994, the chairman of the Central Bank, Galib Aghayev, resigned. Rustamov became acting chairman. Heydar Aliyev was looking for a chairman for several months. But at that time, the political situation was very tense. Politics was ahead of economics. In the end, Rustamov was appointed chairman. His term ended in 2000. Heydar Aliyev was again looking for a chairman. Rustamov became acting chairman for several months. However, the president had health problems, and again he did not reach Rustamov and reappointed him. In 2005, the country already had high oil revenues. It seemed like Rustamov was one of the creators of this success in the country. And something unprecedented happened: Ilham Aliyev appointed Rustamov for the next 5 years before his term expired (several months left). In 2010, Rustamov was considered one of the pillars of macroeconomic and financial stability and economic development in the country. Therefore, he was easily reassigned. The problem arose in late 2014. Oil prices fell sharply. Nevertheless, Ilham Aliyev stated that our manat will remain stable. However, two months later, in February 2015, the devaluation took place. Why? Because it turned out that financial stability was a myth, the president himself was misinformed. A clear example of this was the scandal at the International Bank. It turned out that many other banks were in a difficult situation. It became clear that Rustamov had hoodwinked for years. However, it was also clear that the process of devaluation of the manat was not over yet. Therefore, in April 2015, he was re-appointed to complete the devaluation. What was the point of appointing someone else and disgracing him in the public eye?! A wet man does not fear the rain! Therefore, Elman muallim continued the devaluation operation in December 2015 and during 2016. At the same time, he had to close several banks. His reputation was completely shaken. In such a situation, the bank could not exercise control. Because the banks also had a lot of claims against him. Therefore, in March 2016, banking supervision authority was taken from him and transferred to the newly established Financial Market Supervision Chamber. The work of the Chamber also failed, but this is another matter. In the background of the Chamber, Rustamov was just better. However, personnel changes in the government's economic bloc indicated that he would also be replaced. At the end of 2019, the Chamber was abolished and its powers were transferred to the Central Bank. Because the question arose: if Rustamov was so good, why were his powers given to the Chamber 3 years ago? There were rumors that he would be appointed Deputy Prime Minister. This was evidenced by Rustamov's passive banking supervision. For example, he did not take real and serious steps against the de facto bankrupt Atabank and other troubled banks. It was as if he were saying: “let the one, who will replace me, executes it!” But the sharp drop in oil prices and the coronavirus crisis have changed the situation. It became clear again that sooner or later there will be another devaluation, and the banking system will face a difficult period. Taking unpopular steps will be needed. Should new staff do it? No! He/She cannot fall into disgrace. Let Rustamov do these dirty works. Therefore, Rustamov was re-appointed with the approach "let him stay temporarily, we'll consider later." But his fate shows that there is really nothing more permanent than temporary!

- What can we expect? What changes are possible in the activities of the Central Bank, as well as in the banking sector?

- Nothing positive can be expected from Elman Rustamov. Objectively, he is not capable. He is the hero of the easy money era. It is easy to create the impression of a stable manat and a successful banking system at the expense of oil revenues! The real professional is revealed during the crisis. What has Rustamov done in the last 5 years? Has the manat floated? No! As oil prices stabilized somewhat, they returned to the previous tactic: a harmful fixed exchange rate approach in the long run. The result is obvious: the whole world now gives cheap loans so that the economy does not die, and we do not lend by fearing devaluation (because the money given can flow into the foreign exchange market)! Complex and in-depth work is not his style. He has no suitable team. Therefore, after spending foreign exchange reserves for some time, there will eventually be a devaluation. We should not expect anything positive from him in the field of banking supervision. The existing problems of the banking system arose due to him and with his participation. Moreover, the gross violations of the law that have been going on for many years (for example, Bank Standard, Texnikabank, and other bankrupt banks or currently Atabank). If he reforms, all the "garbage" will be revealed. Therefore, like other old government staff, he will only waste time while in office. He is not Inam Karimov, Mikayil Jabbarov, or especially Sahil Babayev to start real and serious reforms, to work in a modern way.

- The election of a new chairman coincides with a period of falling oil prices on world markets. At the same time, pandemic and quarantine period. That is, it is undeniable that there will be economic difficulties in the future. And devaluation talks have been going on for a long time. Will Elman Rustamov, who signed his signature under the two devaluations in Azerbaijan, avoid this signature this time? Or will he sign his signature under a third devaluation?

- Not the third, but the fourth. The first devaluation took place in February 2015 (27 gapiks), the second in December 2015 (50 gapiks), and the third in 2016 (15 gapiks). As I mentioned, Rustamov is kept so that he can sign the next devaluation at the right time. The banking system is an area of trust. The chief banker must be a trustworthy person. Even when Rustamov is right, people are worried that everything will be contrary to what he said. Why keep such a person in the office? To confirm his reputation!

- What can we expect from the situation of banks in Azerbaijan? How will they get out of this difficult situation?

- Most likely, there will be the next season of the process of closing banks. The state of our banking system was already bad. The current global crisis will also infect many of our banks. Only a few banks will survive at best. Mainly those banks that have administrative resources.

- In general, what do you offer? What needs to be done for the development of the activities of the Central Bank, as well as the banking sector? Probably it would not be possible to achieve this only with a change of leadership?

- First of all, banking legislation must be changed. The President instructed to draft the Banking Code twice (!!!) in 2004 and 2014. It is not ready yet. Then, the leadership of the Central Bank must be changed. As in other institutions of the government's economic bloc, modern-minded, energetic, and honest staff must be brought in. Monetary policy and banking supervision tools need to be changed. All banks must be properly inspected and rehabilitated, and the perpetrators must be brought to justice. The stolen money must be returned!

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