Press Review 05/25/2016

The speech by Ilham Aliyev at the Istanbul Summit of the Humanities, the state of the construction sector, the situation in the banking system, the transition to 12-year education, appreciation of the manat to the US dollar are the main topics of today's press.

The official newspaper Azerbaijan writes about the speech of President Ilham Aliyev at the Istanbul Summit of the Humanities and demand from the international community to impose sanctions against Armenia.

In his speech, Aliyev noted that some UN resolutions are carried out in a matter of days, and the Karabakh resolutions are not met for many years.

Azadlig analyzes the situation with experts in the construction sector.

From January to April of this year cement production decreased 42%, and this also applies to other building materials. The expert Nemat Aliyev believes the country still has not formed a normal business, because the construction sector operates on the principles of patronage. The funds allocated to the construction sector are embezzled.

The expert also notes decrease in investment in Azerbaijan by 2 billion USD as there are no normal business conditions in Azerbaijan.

Echo talks about the transition to 12-year education, but preparation for this requires a minimum of three years. But before proceeding to this, a lot of issues should be solved, including reforms. There is a proposal to start a pilot project, since the transition to such a period of education across Azerbaijan will require considerable budgetary resources, and it will hardly improve the quality of education.

Novoye Vremya gives the forecast of the international rating agency Moody's, which is not planning another reduction of Azerbaijan’s rating. As stated by the Assistant Vice President of the agency, an analyst Maria Malyukova: "All the negative factors are taken into account in reducing the rating at the beginning of the year." According to her, in the next 12-18 months positive changes in the banking sector of Azerbaijan are not expected: "Azerbaijan has entered a period of economic recession. We expect GDP decline by 3.3% this year. The fiscal situation has deteriorated. Bank lending will be reduced. Gross impaired loans will reach 20% by year end. In the first quarter, the credit portfolio of banks decreased by 9%. Excluding the International Bank of Azerbaijan (IBA), bad loans already account for 20%. By the end of the year, excluding the IBA, NPLs reached 25%. Capital ratio from 11.2% at the beginning of the year decreased to 10.9% as of March 1," said the representative of Moody's. Only full-scale economic reforms can save the situation.

Yeni Musavat writes about the rate of the manat to the US dollar in recent days. The economist Gubad Ibadoglu said this was to influence inflation, but this has not happened, and prices continue to rise.

The expert believes the lack of a healthy environment for business development also reduces the investment process. The purchasing power of the population reduces, and the decline in GDP will accelerate. The expert believes it is necessary to revise the economic policy.