Do EU requirements meet Azerbaijan’s social and economic interests?

Economy Materials 20 May 2019 15:43 (UTC +04:00)

Baku, Azerbaijan, May 20


The negotiations on a new agreement between Azerbaijan and the EU are underway, Doctor of Economic Sciences, Professor Fikret Yusifov told Trend.

The expert reminded that according to several media outlets, one of the main topics of the talks is cooperation in the economic sphere.

"Despite the details of the agreement have not been disclosed, taking into account the recent agreements concluded by the EU with a number of countries, one can guess about the requirements set before Azerbaijan,” Yusifov said.

“For example, the agreements signed with Ukraine, Moldova, Georgia, Armenia and Kazakhstan cover the wide cooperation in the trade and economic sphere,” he said. “Taking these agreements into account, there is such a conclusion that the EU has gained great advantages in trade with these countries and entering their markets.”

“There are “interesting moments” in the abovementioned agreements,” the expert added.

"In particular, according to the EU agreement with Kazakhstan, when setting the prices for the sale of energy and other raw materials to the industrial enterprises, it is necessary to take into account the costs and revenues of the supplier,” Yusifov said. “In other words, this means the sale of energy and raw materials at the actual market price.”

“If Azerbaijan accepts the agreement, the tariffs for water, electricity and gas sold to the population will increase,” he said. “But this step is contrary to the country’s social policy and Azerbaijan is unlikely to accept such an agreement."

The expert stressed that the EU agreement with Ukraine also attracts attention by its “peculiarity”.

“Thus, the export prices for energy resources must not be higher than the prices in the domestic market,” Yusifov said. “Taking into account the fact that Azerbaijan is a big energy exporter, the EU may put forward the requirements that can not be considered satisfactory for the Azerbaijani citizens.

“That is, according to the EU requirements, either the prices for energy resources in the domestic market must be raised to the level of the prices in the world markets or the export prices must be lowered,” he said. “In the first case, one can expect a sharp rise in prices in the domestic market, which, in turn, will lead to a rise in prices for gas, electricity, gasoline and other oil products, as well as goods, work and services in other interrelated spheres within the country. The second scenario will lead to a sharp reduction in revenues obtained by the country."

Yusifov thinks that both scenarios are unacceptable for Azerbaijan because the adoption of one of the two scenarios may weaken the social protection of citizens, in general, lead to the restriction of numerous social projects being implemented in the country.

“I think that this is one of the main reasons for delaying the negotiations," he said.