Increased salary not to entail price hike in Azerbaijan

Business Materials 12 February 2019 09:22 (UTC +04:00)

Baku, Azerbaijan, Feb. 11

By Huseyn Veliyev – Trend:

The Azerbaijani government will take all necessary measures to prevent intended increase in prices after increase of the minimum wage, Abulfat Maharramov, director of the labor policy department of the Ministry of Labor and Social Protection of Population of Azerbaijan, told Trend on Monday.

Maharramov said the National Confederation of Entrepreneurs will be given relevant instructions to prevent such cases, and social partners will be involved.

"One knows, market pricing is shaped in accordance with the market economy. Even if someone inflates the prices artificially, this hardly remains for long-term. The product will not be sold, and the seller will be forced to reduce its cost. I do not think that an increase in wages will promote hike in price. Even when something like this happens, state officials usually get involved and give relevant instructions to entrepreneurs so as to prevent such cases," Maharramov said.

On the other hand, it is a fallacy to guess that raising wages is unprofitable when there is a rise in prices, the director noted.

"We live in conditions of a market economy. So, other countries’ economies inevitably affect ours. Today, along with exporting its products to the global market, Azerbaijan imports quite a lot of products. In order for this process to be economically balanced, it is necessary to ensure a balance in both prices and wages. Political will is needed here. A country that does not pursue such a policy is doomed to failure," Maharramov said.

Wage reforms include risks and calculations, and economists realize the necessity thereof, he added.

“It is also wrong to think whether it is worth raising salaries when the prices continue rising. Anyway, measures will be taken to prevent it to happen. In addition, the market itself will regulate the prices. Those who are intending to increase prices will once again understand that these steps are leading to failure," Maharramov said.

On February 8, President of Azerbaijan Ilham Aliyev signed a decree on raising the minimum monthly wage and amending the decree “On Raising the Minimum Wage” of December 25, 2017.

According to the decree, the minimum monthly wage is set at 180 manats from March 1, 2019.

($1=1.7 AZN on February 11)

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