Government Delays Revaluation of Consumer Basket Again

The composition of the minimum consumer basket in Azerbaijan was last revised in June 2014. Despite the fact that the government was supposed to conduct a reassessment of the composition of grocery, non-food goods and services in 2017, for unknown reasons, this process is delayed.

By its Resolution No. 182 of June 6, 2014 "On Approving the Composition of the Minimum Consumer Basket" (http://www.e-qanun.az/framework/10061), the Cabinet of Ministers instructed the Ministries of Economy, Finance, Health, Labor and Social Protection of the Population, and the State Statistics Committee (SSC) that they should submit proposals on the composition of the minimum consumer basket updated every three years.

In determining the composition of the minimum consumer basket, these structures should have consulted also with the Confederation of Trade Unions of Azerbaijan, state scientific institutions and organizations, and non-governmental organizations. However, as in previous years, in 2017, the cost of living for this year was calculated in accordance with the minimum consumer basket approved in 2014.

The State Statistics Committee notes that "the cost of the minimum consumer basket is calculated once a year, and in 2017 it amounted to 165.7 manat per month." Although, according to the law, approved by the Parliament on the initiative of President Ilham Aliyev, the subsistence minimum, determined in accordance with the cost of the consumer basket, is expressed by a higher amount - AZN 173 per month in 2018.

According to the aforementioned government decree, SSC should, having calculated the cost of the minimum consumer basket, once a year publish data in official state publications. But the organization does not comply with this requirement. The State Committee says that work is currently underway on a mechanism for the regular publication of this information.

In Azerbaijan, the composition of the minimum consumer basket, in accordance with international experience, is defined in three groups of the population: the working-age population, pensioners and children under the age of 15.

For example, for children up to 15 years, 12 kinds of food products (potatoes, eggs, butter) and food groups (in terms of flour, bread and bakery products, vegetables and melons, meat and meat products, fish and fish products, milk and dairy products, sugar and confectionery products, vegetable oils, margarine, etc.) are calculated, with a total weight of 835 kg. For working adults, this is 24 kg less. Non-food products and services are defined by 10 types.

Independent experts have always disputed the position of the government regarding the value of the minimum consumer basket. According to their calculations, to meet the minimum needs, the population is forced to spend money much more than official figures. For example, back in 2013, the NGO Center for Economic Research estimated that in Azerbaijan the cost of the minimum consumer basket per person for the working-age population was 165.83 manat (in 2012 by one month), for pensioners - 149.79 manat, and for children - 204.34 manat,

In the same year, the subsistence minimum in the country was announced at 108 manat. Experts of non-governmental organizations carried out calculations not according to absolute criteria, but in accordance with the government"s "basket". As it can be seen from the figures, 5 years ago the cost of the minimum consumer basket per capita was close to the result, which the State Statistics Committee came to in 2017 (165 manat 70 gyapik).

The law "On Living Wage" was adopted in 2004. Since then, the government has reviewed the composition of the minimum consumer basket three times. The last time in the basket the weight of bread and bakery products for the working-age population was reduced from 150 kg (2009) to 138.6 kg., and butter - from 8 kg to 7 kg. For other groups of products, the minimum food needs of workers have been increased.

For example, compared with the corresponding figures in 2009, the weight of meat and meat products increased from 30 kg up to 32.9 kg, milk and dairy products - from 193.6 kg up to 223.6 kg, potatoes - from 46.7 kg up to 54.8 kg, eggs from 135 to 150 pieces. The needs for non-food products (clothing, bedding, household goods, etc.) have not been changed. In the services sector, the minimum need for water has been increased from 5 cubic meters to 6 cubic meters per month, the annual number of travel in transport - from 606 to 692 times.

Thus, earlier in Baku and in the adjacent region, the minimum costs per capita for the monthly rate of water supply and sewage services increased by 38.8%, (in value terms at 14 manat 60 gyapik), and transportation costs - by 70.6%, (from 121 manat 60 gyapik to 207 manat 60 gyapik). Physical growth cannot but affect the growth of the value of the "basket".

If we take into account that since 2014, the population of the country has several times faced with double-digit inflation and devaluation of the manat, it is not at all difficult to see that the real value of the consumer basket is much higher than the government estimates.