Azeris face spending crunch

zeris-face-spending-crunch-2009-12-11
Friday, December 11, 2009

BAKU – From wire dispatches
Azerbaijan could face a spending crunch next year after the government
lowered the price it expects the country’s oil to get by almost a
third.

Finance Minister Samir Sharifov blamed the world economic crisis for
the bleak outlook, but said the government was still determined to
invest in Azerbaijan’s future. `We have also taken into account a
revival next year of world trade, and the restoration of credit. As a
whole, the budget for 2010 is aimed at the further strengthening of
the defense capability of Azerbaijan, the provision of support to
entrepreneurs, the strengthening of energy and production security,
and the strengthening of monetary policy,’ Sharifov told parliament in
a debate on the budget.

The predicted oil price, which is the main component of the
government’s receipts, was set at $45 a barrel, down from $70 in this
year’s budget – a prediction that proved over-optimistic and led to
the budget having to take money from the State Oil Fund. The fund was
set up to hold excessive earnings from the oil industry in an attempt
to protect the economy from the inflationary pressures of high foreign
exchange earnings.

Economic experts warned that the budget could harm those most
vulnerable in society. `Social spending in the budget will be cut next
year by 5 percent. Spending on education will fall by 5.6 percent, on
health care by 5.9 percent, on social support by 4.9 percent, on
support for the state television and radio company by 6.6 percent, on
communal services by 5.1 percent, and on agriculture by 18.2 percent,’
said Zohrab Ismayil, head of the Azerbaijan Public Union for Healthy
Evolution, an economic pressure group.

Opposition parties, which have little influence in parliament,
savagely criticized the government’s plans. `Despite the fact that
last year prices for metro tickets and gas tripled, and that prices
for food are rising sharply, funds for social spending in the budget
have been cut. Not only that but there is a rise in spending on the
courts, the police and the administration,’ Ikram Israfil, a deputy
from the Musavat party, said.