BUDGET -2006 - LAVISH HEART

Over the past few years the public budget of Azerbaijan has been considered to be of social character. The public budget assignments take more and more weighty year by year. Thus, in 2003 they comprised almost 60% of the public budget expenses or 3, 858trln manats, or 20.3% more as compared to 2002. In 2004 the social expenses were calculated as 4.2trln manats, or 58% of all public budget expenses. The special weight of social expenses in 2006 public budget is 39.9% or 1,421,9m denominated manats. A rise in social remittances in the absolute amount constituted 1623bn old or 324.6m new manats as compared with 2005, or 29.6% in relative prices.

Earlier, if the majority of national experts considered the budget to be exclusively of social character and regarded the social assignments as loss, now MPs fight for improvement of the social indices. They are seemed to understand that low living conditions of the people was one of the major obstacle, impeding the economic growth. At present the government finances the social articles of the public budget, which are the expenses for education, health, social security and social provision, be it in the long-perspective.

Social articles of the 2006 public budget (forecasts)

Expenses articles

Mln. AYM

Education

476,5

Health

150,5

Social security and social provision

405,1

It necessary to note that the expenses for education and medicine grew in more rapid rates as compared to 2005: next year the expenses for education will be 32.9% more and health вЂ" 28.4% more. At first glance the tangible quantitative rise in expenses for the said articles will occur due to rise in average salaries and pensions in 2006. Thus, the public budget transfers to the wage fund is expected to be 718.2m manats, or 20.1% of total expenses, which is 167.3m, or 28%, more as compared to 2005.

The 2006 public budget defines the education expenses in the amount of 476.5m denominated manats, 58.2% of which falls on incomplete and secondary education. At present 4542 secondary schools function in this sector covering 1.6 million children and 174,000 teachers. Besides, 20.6m manats will be directed at the increase of teachers’ salaries.

The public budget assignments for health are project in the amount of 150.5m denominated manats. 6.3 million manats is allocated for increase of salaries of doctors and medical personnel. The less part of funds are directed at applied researches. Insufficient financing and low salaries make the sector unpopular, whereas in the developed countries big funds are spent on innovations and the best �brains’ are attracted.

Another permanent social article is the expenses for social security and social provision. In particular, the expenses for social security will comprise 393.04m manats, while expenses for social provision вЂ" 12.0m manats. From 2006 the social pensioners (citizens without work experience) will receive funds in the form of public allowances. Thus far the funds had been allocated to the State Social Security Fund from the public budget for financing the payment of pensions, while from 2006 the Ministry of Labor and Social Security will be involved in the affairs of social pensioners.

Over 72 million manats will be allocated for implementing measures on application of social target aids. The process covers large stratums of population, definition of poverty criteria, amount of benefits, which will be implemented the Ministry of Labor and Social Security.

A total of 167m new manats are required for increase of pensions of labor pensioners by 20%. Additional expenses in the amount of 11.3m manats are required for increase of benefits war veterans, shehid {martyr} families. From 2006 it is planned issue monthly food benefits to refugees through plastic cards. 940,000 manats will be spent on such measures.

As to average wage rate in the country. In 2006 it will increase to 156.1 manats (780,500 old manats). In general, next year it is planned to increase minimal and average wage by 33.3%, which will be enough in case the inflation ration is equal to 8-9%. 31.4 million manats will be directed in this purpose. Increase of the minimal salary will continue by 2009. However, the increase of minimal salary to 150,000 old manats from 1 October 2005 concerned 670,000 people and the public assignments for this purpose made up 102m manats.

The social aspect of the public budget is strengthened by some factors. For instance, 20m has been allocated out of the public budget for the implementation of the law on Mortgage, in particular for the improvement of the accommodation terms of young families. At least, after long years 40m manats has been included in the budget for indexation of the community deposits.

Thus, we indicated the major items of social expenses of the 2006 public budget. However, the assignments are still insufficient for social needs. The 2006 public budget of Azerbaijan essentially differs from the previous ones: the budget has never seen its budget revenues to increase 66.7%, while expenses вЂ" 61.9%. So, let’s go ahead with optimism.

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