Our Analytics 29 september — 13:31

Natig Amirov raised his map (Our analysis)



The implementation of President Ilham Aliyev's decree 'On the Approval of Strategic Road Maps on the National Economy and the Main Sectors of the Economy' raises ambiguous assessments in expert circles. The decree was approved on December 6, 2016, almost two years have passed, and this forces many experts to seriously analyse the passed stage, to assess both the process of economic development of the country as a whole and its individual sectors. But, unfortunately, the opinions of experts often disagree, which forced Azeri Daily to once again address this important topic.

It should be immediately noted that the government of Azerbaijan had its clear economic strategy long before the approval of these Strategic Road Maps. But a sharp decline in world oil price markets in 2014 led to a drastic change in the government's approach to the country's economic development strategy, including large-scale reforms. This process has especially intensified after two painful processes of devaluation of the manat during 2015.

'In 2016 alone, the President of the country established the Financial Market Supervision Chamber and the Financial Stability Board,' Assistant to the President for Economic Policy and Industrial Issues Natig Amirov told Azeri Daily. 'Many then doubted, and even today there are many of them, the expediency of creating these structures. But to a large extent, it was thanks to the activities of these structures that the rate of the manat was stabilised, which has not changed for the second year in a row.

Natig Amirov

Indeed, the Council and even the Chamber, despite the numerous shortcomings in its work, which were written about by the media, generally fulfilled the goals set for them. And the point is not only the stability of the national currency, but also the financial system of the country as a whole. True, some people, while agreeing that these structures have fulfilled their tasks, offer to abolish them already. But they are in a hurry, perhaps. It is enough to look around, see how the global financial markets are shaking to advocate for such hasty decisions. The threat of financial instability is once again hanging, and, literally from all sides, it is already rampant in the markets of our main economic partners. Russia, Iran, Turkey... The financial market of the country should not be weakened, but strengthened, even if this requires the creation of new structures.

And they are being created. Such structures include, for example, the relevant commission, established in July 2016 with the aim of increasing the attractiveness of the business climate in the country and further improving the country's position in international ratings. A year later, another decree of the president of the country approves a specific plan of measures for the implementation of the first document. And the country's position really shows a tendency to steady growth. Especially this trend is observed in the non-oil sector, which has become a priority for the development of the national economy.

And this is by no means the only state structure created recently to improve the economic situation in the country. Among them are the Azerbaijan Industrial Corporation OJSC and a number of other state-owned companies and state agencies. The population does not pay much attention to their creation and activities, but they feel the fruits of this restructuring of the economy. And this is not only the stability in the financial sphere that we talked about. The growth of GDP, budget and own revenues, lower inflation, a positive trend of other indicators - that's a clear proof.

The new structures, of course, contribute to the development of the economy, but it is generally impossible without an appropriate legislative framework. Changing situations, new goals and priorities require a new approach. In this regard, the law on the implementation on the basis of financing in a special manner investment projects related to construction and infrastructure objects, adopted in March 2016, is indicative. We all remember what changes occurred after this in the construction sector, which, it seemed, was already fully prepared for a long hibernation. Unemployment has fallen sharply, the material well-being of thousands of Azerbaijani families has improved.

The transition from a multi-stage to a low-level tariff system in imports has also greatly helped the business. Business does not like confusion and excessive red tape, which are only beneficial for officials. And the easier it is for the business, the better for the people, which is the main goal of the state. But this can only be done by a state that is not burdened with debts. And they just began to grow in recent times, which caused various gossip.

The external debts have especially grown, which is mainly due to the criminal policy of the former leadership of the International Bank of Azerbaijan (IBA). And the head of state approves by his order the Strategy for managing the public debt for the medium and long term, which, of course, implies a gradual decline in the volume of public debt, including external debt. However, before that, IBA had to be thoroughly cleaned up from the accumulated multi-billion viral loans and prepared for privatisation. But the expenses and efforts of the government were not in vain, in this area the situation also began to improve, which is noted by international financial and rating organisations.

All these measures, of course, affect the country's budget, and, therefore, require a new approach to its management. As a result, in the middle of this summer, changes are made to the law 'On the budget system.' This important law introduces a new fiscal rule, which is a clear framework consisting of macroeconomic and budgetary indicators. It is necessary for the implementation of fiscal policies that ensure medium and long-term macroeconomic stability, financial and debt discipline. And just a month ago, by an order of the head of state, the 'Procedure for preparing the framework of medium-term expenditures' was approved. This is how documents are prepared for months or even years, structural changes are carried out, which should ultimately lead to an improvement in our lives.

These facts may seem boring to the reader and not very effective. And the specific results are not visible. But the fact of the matter is that it’s not serious to wait for the momentary effect of serious macroeconomic steps of the government. All the above structural, institutional changes in the economic sector of the country, supporting the basis of the new approaches, are the legal basis on which the new economic strategy of the government, reflected in the Strategic Road Maps, must firmly rest. Moreover, this article considers only those structural legislative changes and additions that cover only the Strategic Road Maps on the prospects of the national economy. And in order to fully imagine the full scope of the paperwork, in the future we will consider similar measures taken by the government in certain sectors of the economy.

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