Why Do Azerbaijanis Seem Richer?

Baku / 02.12.17 / Turan: Even superficial calculations based on official statistics show an increase in the number of poor in Azerbaijan.

"The consumer basket, consisting of 25 types of food products included in the daily diet of the population (flour and flour products, butter and vegetable oil, lamb, beef and chicken, tea, salt, fruit, vegetables, etc.) cost AZN 95 in December 2014. At the same time, in October this year the consumer basket of Azerbaijanis went up to 143 manat. Thus, official data show that the minimum set of food products in Azerbaijan has risen in price by 50% over the past three years as a result of two sharp drops in AZN and creeping devaluation," the economist Rovshan Agayev said.

Now let"s calculate the income. With reference to official data, the minimum wage for this period of time increased only by 10% (from AZN 105 to AZN 116). The average nominal wage increased by 18% (from AZN 445 to AZN 525). The minimum pension was raised by 10% (from AZN 100 to AZN 110), and the average pension increased by 15% (from AZN 170 to AZN 195). "It turns out that food inflation in the country has risen by 50% following the results of the three-year inflationary process, and the rate of growth in nominal income was less than 20%. That is, prices have increased by about 2.5 times," Agayev said.

Based on these data, a sharp increase in poverty in the country is inevitable, the expert believes. However, the officially announced figure remains at the level of 5% for many years. For comparison, in Russia, where similar inflation rates are observed, the government officially announced an increased poverty level from 12% to 20%. As already mentioned, our calculations are based on data from the State Statistics Committee. "Imagine what results we will get, using alternative sources," the economist said.

In Azerbaijan, the "consumer basket" method is used to determine the poverty criterion, which includes a standard set of livelihoods. Taking into account the level and the dynamics of prices, the subsistence minimum is determined.

"Our statistical calculations are based on outdated criteria. For a long time already many countries of the world have included in their consumer baskets spending on the Internet, buying books, and entertainment, while we have nothing of the kind in the approximate set. In addition, the criteria and approaches to determining the level of poverty vary. So, in the poorest country of the European Union, Bulgaria, the minimum income per person is EUR 200, or AZN 400."

If you apply the UN calculation criteria to Azerbaijan, 900,000 out of 1 million 300 thousand pensioners will automatically fall below the poverty line. "The thing is that 900,000 pensioners receive a minimum pension. In addition, of the 918,000 state budget employees, about 600,000 people receive 200-250 manat, that is, about 1.5 million working citizens are below the poverty line, which is three times the 5% declared by the government. The need to revise the criteria for calculating poverty is long overdue. However, today the government will not take this step, as it will have to raise pensions and wages, which is fatal for the budget," Jafarli explained.

From his words, before the fall of the manat, Azerbaijan was consistently in the first five countries of the CIS in terms of incomes. The devaluation of the national currency has thrown the country to the very end of this rating and today even neighboring Georgia can boast higher salaries. -0---