One hundred thousand jobs will close in 2016

The well-known economist Gubad Ibadoglu in an interview with Turan and "Voice of America" gave a disappointing  review on the economic situation in Azerbaijan in the New Year. First of all, the results of 2015 were much worse than the leadership of the  country  states, and there is no real economic growth. On the contrary, the problem worsened. The fall in oil prices has had a serious negative impact , and manat twice undergone devaluation,  and went down in value by 100%.

"The national currency is  one of the main indicators characterizing the situation in the economy. The fact that the double devaluation of the manat does not allow to talk about any economic development," he said.

Devaluation means not only a reduction in income, but also the depreciation of assets, property, real estate and others. At the same time, the depreciation of the manat leads to rise in price in the consumer market and an increase in expenses of citizens. All this leads to an increase in social tensions.

Small and medium business has suffered seriously, and a sharp reduction  of its share in the economyis observed. Minimizing small and medium businesses means a reduction in jobs and the loss of income of the population. Rising unemployment contributes to poverty and increasing crime.

Falling oil prices will create difficulties for the filling of the state budget in 2016 and the payment of pensions and benefits, the expert said. Assessing the level of unemployment, Ibadoglu said that the official unemployment figures do not reflect reality. In the first half of the year according to official figures,30 workplaces were closed, and in the second half of the year, this process accelerated, reaching a peak at the end of the year.

"This year we can predict  the closing at least 100,000 people. This means that unemployment will reach 10%," said Ibadoglu.  The way out  of the situation  is reforms, but this requires political will, the free market thinking and the corresponding command.

Todaypeople managing the economy are involved in busines too. Most team members have large production, trade networks, and so on. If the ruling team has business interests, private and corporate interests, they will not start reforms, or will sabotage them. Therefore, the first step  is separation of business from political control. The reforms also require accountability, the fight against corruption. It means that the reports on income and wealth of the ruling team.

In addition, the reforms must be accompanied by appropriate political, administrative and social  measures, the expert believes.

At present, local executive authorities have turned into ballast. If there are municipalities, then to optimize local budgets and improve governance they should conduct administrative reform, to transfer management powers to the municipalities, and the executive powers should be eliminated.—03B06--