Inglab Ahmedov: Azerbaijan may end up in the budget trap'

Inglab Ahmedov: Azerbaijan may end up in the budget trap'

The round table discussion of the influence of the oil and gas revenue on economy, organized by the Public Finances Monitoring Center (PFMC) with the support of the assistance fund of the Open Society Institute at the International press-center on March 31. Head of the center, Doctor of economics, Inglab Ahmedov emphasized such problems as unreal growth of the manat course, weak competition in the oil sector and deficit of the non-oil budget, Trend reports.

According to him, manat strengthening is one of the Dutch syndrome symptoms. The given process has started in the second quarter of 2005 and by the results of the last year it made up 6,4%, which can seriously affect the economy. One of the reasons is reduction of the dollar course. He also cited the rapid growth of the cash mass starting from the middle of 2002 and by 2005 it has reached 15, 8%

Weak competitiveness of the oil sector is connected to the development of such areas as construction, hotel business etc. which is a natural process for oil rich countries.

The rapid growth of transfers to budget which is designed to cover the oil deficit may lead Azerbaijan into the budget trap i.e. increase of transfers instead of increasing the oil sector competitiveness will in practice lead to its decrease as the inflation growth of budget expenditures is mainly relieved on behalf of manat strengthening, which influences the oil sector development negatively.

Many different models were showed at the seminar- Golden egg and Chicken concept, version of the constant incomes, Norwegian mechanism, Kazakh models of the base payers, stable expenditures and balanced budget. The major task is to choose the optimal model, which is the most difficult task requiring the constant exchange of opinions. A positive tactic has to be applied in the country, like the one used in Alaska and Norway, MP, Ali Masimov said.

Kazakh model of the balanced budget could have been positive for Azerbaijan, it will be used in 2007, Ahmedov stated. It intends concentration of the non-oil incomes for financing of the current programs, and oil incomes- for aimed budget expenditures (investment projects financing). The total weight of the oil incomes to the state budget in Azerbaijan made up 51, 4%, and 48 , 6% in the non-oil sector, it is expected to grow to 58 ,4% and 41, 6% respectively in 2006. The growth is connected first of all with the start of AMOK payments of income taxes and increase of the State oil fund allocations to the budget.

Ahmedov deems this growth as inapproapriate, considering that its 6% in Azerbaijan, whereas in Norway it is -4%, Kazakhstan -4-5%. Despite, the government predicts reduction of the growth it remains the same at the present moment.

Ministry of Finances representatives, present at the meeting did not fully agree with oil sector share growth figures. They consider it as false to include transport, communicational services in the oil sector, as they belong to the service sector.

In this regard growth of the non-oil sector GDP on 10% is considered to be positive. To calculate the non-oil revenues more precisely it is necessary to count the whole income rates volume

A proposal was made at the meeting to create the constant non-governmental body club Azerbaijan 2025, seminar or round table , where the experts could exchange opinions. There are seminars of this kind acting in Turkey, Russia.

Representatives of the scientific organizations, governmental and NGO structures participated at the meeting.

Israel launches spy satellite to keep a better eye on enemies
Israel launches spy satellite to keep a better eye on enemies
Coronavirus cases in Israel nudge 30,000
Coronavirus cases in Israel nudge 30,000
Israel says strikes Hamas sites in retaliation for rocket attacks from Gaza
Israel says strikes Hamas sites in retaliation for rocket attacks from Gaza
Loading Bars
Latest
Iranian banks offer loans to Justice Shares owners
Indonesia reports 70 new coronavirus deaths, 1,209 new cases
Iran bans export of face masks amid increase of COVID-related deaths
Defense Ministry dismisses rumors on Russia detecting planes attacking Iran from Azerbaijan's air space
Turkey's export of ready-made clothing abroad down thanks to COVID-19
Kazakhstan's oil & gas company to buy filters via tender
Share of Yahoo, Yandex search engines in Azerbaijan down
Most popular operating system in Azerbaijan revealed
Turkmenistan to implement new programs to increase cotton production
Iran uses monitoring systems to prevent fuel smuggling
Newly-set FIG Congress dates to be decided on soon
Volume of dolomite transshipment through Turkish ports announced
Gold price decreases in Azerbaijan on July 6
Turkmen greenhouse plans to harvest large crop of bananas
Kazakhstan decreases export of locally-made goods to US
Russia reports more than 6,600 new coronavirus cases
Turkish export of grain, legumes to int'l markets in 1H2020 rises
Ford's China ventures extend auto sales recovery in June
Iran talks exports to Venezuela, hints at bartering option
Geostat: US ranks 7th among largest importers of Georgian products
McKinsey and Co.: Coronavirus to have lasting impact on energy supply
Turkmenistan sells base oil to UAE, Turkey, Afghanistan
Azerbaijani currency rates for July 6
Uzbek Central Bank announces newly-set exchange rates
Zarif defends Iran's deal with China with MPs during parliament session
Georgia sees increase in COVID-19 cases
Uzbek livestock farmers to obtain lands without auction
Armenia violates ceasefire with Azerbaijan 57 times
Iran's Gold and Jewelry Union talks gold, gold coin prices on local market
Israel launches spy satellite to keep a better eye on enemies
Healthcare official talks Iran's flaws in battling COVID-19
Export data of Iran's knowledge-based companies revealed
Turkmenistan's import of clothes from Turkey drops
Azerbaijan-Mexico five-month trade turnover increases
One fifth of German firms fear for their survival amid pandemic
Tesla mocks shortsellers with sale of red satin shorts
Kazakhstan's oil & gas company to buy spare parts via tender
AIIB to support Kazakhstan’s gov't in mitigating COVID-19 impact
Germany's confirmed coronavirus cases rise by 219 to 196,554
UK new car sales post smaller slump in June on annual basis
With nearly 700,000 coronavirus cases, India is third worst-hit country
Iran, Turkey in waiting mode on direct flights due to COVID-19 spread
Persian Gulf Star Refinery to increase production
Kyrgyzstan confirms 314 new COVID-19 cases
Georgia's main import articles from Azerbaijan revealed
Russia increases steel import from Turkey
BSTDB to focus on Azerbaijan's manufacturing, agribusiness sectors
Kazakhstan confirms 1,403 new coronavirus cases
Chinese mainland reports 4 new confirmed COVID-19 cases
Iran says sets up underground missile bases along southern coasts
Turkey spoiled traps set against it in east Med: Erdogan
Saudi Arabia announces Hajj health measures for domestic pilgrims
Charter flight from Amsterdam to Georgia carried out
Buffett's Berkshire to buy Dominion Energy gas assets for $4 billion
Coronavirus cases in Israel nudge 30,000
Trump to hold second campaign rally since pandemic began
Croatia's ruling HDZ wins parliamentary vote, majority within reach
Bolivia's health minister tests positive for COVID-19
Israel says strikes Hamas sites in retaliation for rocket attacks from Gaza
UK COVID-19 deaths rise to 44,220 as another 22 patients die
Iran calls for promotion of strategic ties with Venezuela
Bottas wins surreal F1 Austrian Grand Prix
Two dead, eight wounded in South Carolina nightclub shooting
Hundreds of scientists say coronavirus is airborne, ask WHO to revise recommendations
Abdullah Gul congratulates Elbasy on jubilee
Number of COVID-2019 cases across globe up by over 203,000 in past day - WHO
Iranian parliament investigated Natanz incident
Two rockets fired at Israel from Gaza Strip
COVID-19: 67 more people recovered in Kazakhstan
Israel's El Al to become leaner after government bailout
Azerbaijan discloses number of coronavirus tests
Hungarian Foreign Minister will visit Georgia tomorrow
Health minister urges caution as Turkey records 1,148 new coronavirus cases
Qatar reports 616 new COVID-19 cases, 99,799 in total
Azerbaijan increases import of cars from Turkey
Brunei retains high-income economy status
Afghan soldier, 4 militants killed in eastern provinces: gov't
Azerbaijan reports 523 new COVID-19 cases
WHO appreciates Sweden setting up commission to review handling of coronavirus crisis
Malta refuses to give disembarkation permission to rescued migrants
India to reopen Taj Mahal with social distancing, masks
Iranian mining companies see increase stock sales
Three new COVID-19 cases confirmed in Georgia
Kyrgyzstan's death toll from novel coronavirus climbs to 88
Iran reveals its COVID-19 data for July 5
EIB’s involvement in Azerbaijan focused on social and economic infrastructure
Tokyo confirms 111 new coronavirus cases on Sunday, NHK says
Facebook - leader among social networks in Azerbaijan
TOP-10 Azerbaijani private companies for non-oil export
Oil transportation via Batman Dortyol pipeline through Turkey up
Google Chrome's share in Azerbaijan's browser market grows
Iran launches second phase of Persian Gulf Star Refinery
Azerbaijani Bank BTB’s profit up in 2019
Mexico surpasses France in coronavirus death toll
Digitalization - driver of Azerbaijan’s economic growth
Croatia holds parliamentary elections amid COVID-19 resurgence
Reforms in Uzbekistan attract more Indian businesses
Armenia violates ceasefire with Azerbaijan 43 times
Georgia sees increase in Producer Price Index
1,452 new coronavirus cases detected in Kazakhstan for the past day
All news