The creation of an Economic Council is illogical

***

-Natig Bey, by the Decree of the President, the Financial Stability Board was abolished and a new Economic Council was established. What do you think this means? What was the Financial Stability Board doing and why was it abolished? What is the purpose of the newly established Economic Council?

-In 2016, the Financial Stability Board was established by the decree of the President. This Board, consisting of members of the Cabinet of Ministers, the leadership of the Central Bank and the staff of the Presidential Administration, was to develop and submit to the President programs to ensure macroeconomic stability in the country. Those roadmaps related to macroeconomic stability had to be made public after they were submitted to the President, and public discussions had to be organized. Unfortunately, during these four years, there is no information at all, except for the decisions made by the Financial Stability Board, the documents adopted, some statements about the programs and information about the meetings. The main success was presented in those statements as an indicator of macroeconomic stability, citing the fact that the exchange rate of the manat against the dollar has not changed since 2016. In fact, this is an administratively accepted exchange rate policy. It has nothing to do with the Financial Stability Board, because this is a joint decision of the Central Bank and the government. In Azerbaijan, the exchange rate is a political factor, not an administrative one. The Financial Stability Board, established in 2016, is now being abolished. Instead, an Economic Council is established. The composition is almost the same. Although the names and personalities change, the responsibilities are the same. Under the leadership of the Prime Minister, a Council consisting of ministers, employees of the Presidential Administration, the First Vice President's Administration and the Central Bank was established. The purpose is the same. It is an institution created to solve problems related to macroeconomic stability and investment attraction. But the point here is that it can be done within the Cabinet of Ministers. In other words, the creation of the Cabinet of Ministers in a different form, under a different name, in a different configuration, frankly, does not make much sense.

- Are there favorable conditions in Azerbaijan for the activities of the Economic Council to implement its goals?

- The solution of the issues raised by the Economic Council should be the result of joint activities of the Cabinet of Ministers and the Presidential Administration. As I said, the creation of a separate institution does not make much sense. The problem is that the old system no longer works in Azerbaijan. We are witnessing the blockage of the old system. Due to the fact that the old system does not work, there are problems in creating new rules. The solution to the country's problems lies in institutional and constitutional reforms rather than the establishment of commissions by some formal councils, because the old social agreement does not work. There is a need for a new social agreement. The name of Azerbaijan's governance model is unknown. Although Azerbaijan is a presidential republic, it also has a Cabinet of Ministers. In parallel with the meetings of the Cabinet of Ministers, the President also meets with the ministers and gives direct instructions. If Azerbaijan is a presidential republic based on strict vertical governance, the Cabinet of Ministers is already becoming an unnecessary body. And there is a parallel here. Both the Cabinet of Ministers and the Presidential Administration have agencies and departments dealing with the same issues. The way in which they duplicate each other's work raises questions. It is high time to make decisions on the transition to a new stage, the system.

- The decree speaks of new strategic policy challenges. By the way, if the Financial Stability Board is headed by an aide to the President, the Economic Council will be headed by the Prime Minister. This is a factor that strengthens the legal status of the Economic Council. And this creates the impression that the form of government in Azerbaijan may change. In other words, can the transition from a presidential republic to a parliamentary republic or any other form of government in the near future be the beginning of Azerbaijan?

- It is not right to expect any format changes with a single decree, i.e. the establishment of the Economic Council. The establishment of this Council already shows that coordination is needed for parallel structures to work together. The same thing could be done by either the Cabinet of Ministers or the Presidential Administration, because there are already established rules in Azerbaijan. It was just a system for big oil money. In other words, this system worked badly at a time when oil prices were high. Now this is not possible. The fall in oil prices, the pandemic, and the economic situation are already seriously hampering the functioning of this system. Therefore, the economic and political formation of Azerbaijan must be redesigned. It can be a transition to a parliamentary republic, a semi-presidential system, or a semi-presidential republic. But something must happen. There must be a new game rule. The old rules of the game do not work, and the new rules of the game have not yet been established. It is impossible to establish new rules of the game with such decrees.

- Based on the decree of the President, which model is closer to Azerbaijan for the work that the Economic Council can do? Can you give specific examples from models around the world? In other words, can the US model, the Chinese model or the model of any other country be more suitable for Azerbaijan? In this regard, as I said in the previous question, the form of government in the countries you can cite as an example is also interesting.

- It is difficult to say what the most successful model for Azerbaijan is, because in any model, first of all, the rule of law and the independence of the judiciary are important elements. It does not matter whether it is a presidential or a parliamentary republic. In the classical sense, there are three branches of government. According to the classical philosophy and theory of public administration, all three branches must be independent and regulate each other. The problem with us is that the government has one branch - the executive branch. It is also very strong. Parliament, the legislative branch, and the judiciary are subordinate to it, formally and informally. Why is this official? Because the President plays a direct role in the appointment of judges. That is, the chief executive appoints the heads of courts. This was later approved by parliament. This practice itself is a key element undermining the independence of the judiciary. Therefore, no matter what the model, Azerbaijan must be guided by the rule of law and the principle of separation of powers. In other words, the legislative, executive and judicial branches of government must be separated and able to control each other and apply effective governance. Then we can say which model of governance can be more effective in Azerbaijan, and it is worth thinking about. In my personal opinion, the best model of governance for Azerbaijan is the parliamentary republic model. Because the practice of neighboring countries and other countries in the world shows that a parliamentary republic raises the political culture, brings a culture of reconciliation. And this lays the foundation and foundations of collective governance within the country.

- What is the purpose of creating a normal economic and political environment in the country? What do you need to do for this? Is the creation of institutions such as the Economic Council a solution to this problem?

- In all these cases, whether it is related to local self-government, the executive branch, or economic and political problems in the country, the solution to the fundamental problems lies in a new social agreement. The new public agreement must end with the writing and adoption of a new Constitution. For this, there is a need to hold hearings with the participation of various political organizations and members of civil society. As a result, a separate commission is needed to establish a new public agreement. The way to solve the problems in Azerbaijan is to adopt a new Constitution. Here, too, the principle of separation of powers, local self-government, strengthening the judiciary and independence should be reflected in the new Constitution. The current Constitution is incomplete and patchy. It has been amended several times since 2002, and these changes violated the logical sequence of the Constitution. The new social agreement and the new Constitution are the main factors that can play the most important role in solving the problems in the country.