Socially oriented budget and fair distribution – What is expected in 2020? –COMMENT

14 November, 11:30 Share on social media:

The cold-blooded management model of capitalism and in general, the essence of this system increase the risk of stratification in the society. Social steps taken by the state may compensate this risk. Like in the Azerbaijani model.

Today, the socially oriented policy is pursued in Azerbaijan. The state pursues the consistent and purposeful policy to improve prosperity and the living conditions of different social groups, solve problems and get rid of daily concerns. The analysis of the 2020 budget project shows that the budget is mainly socially oriented.

According to the document, the special weight of the socially oriented expenses in the budget expenditures is 40,7 percent. It is 9,9 percent or 664,2 mln AZN more compared to 2019. In 2020, the expenditures on the salary payment will be 6 billion 723,4 million AZN, scholarships and social benefits - 3 billion 213,4 million AZN (in addition, 1 billion 426,9 million AZN to the State Social Protection Fund), compulsory health insurance - 902.9 million AZN, purchase and supply of food products - 414 million AZN and other socially oriented expenditures - 81,2 mln AZN.

Thus, it is seen that social expenditures take a special place in the budget. It is undoubtedly another reflection of the socially oriented policy defined by President Ilham Aliyev.

Let us take a short look at the essence of the socially oriented policy.

Fair distribution

The Azerbaijani state’s policy in this field is transparent and clear enough. It is true the diversification of economy is carried out, and as a result of it, the increase of the volume and number of exported non-oil products is observed. However, oil still dominates in the export. To ensure the just distribution of oil revenues and at the same time, to ensure the passing of these revenues to the future generations, the State Oil Fund of Azerbaijan was established. It is possible to use the expenditures allocated by the State Oil Fund only after discussions in Parliament. This is the civil management model in the expenditures usage. It is no coincidence that in 2016, the State Oil Fund of Azerbaijan Republic took the first place with 92 points among 60 sovereign funds in the rating of the Transparency and Accountability of Sovereign Funds made by Peterson Institute for International Economics.

Reducing poverty

The social events and consistent programs aimed at the increase of employment implemented by the Azerbaijani state have given an opportunity for tackling poverty.
President Ilham Aliyev defined the tackling of poverty as the main priority in 2003. The decrease of poverty from 49 percent to 5 percent in the past 15 years indicates the efficiency of the implemented policy and the fact that the human factor is in focus of all these events.

Social protection

An Azerbaijani citizen is confident that the state is by their side in all cases. The past experiences create a foundation for that. We can give some concrete examples: the steps taken by the state for solving problems citizens face in emergency situations, events held for improving the housing conditions of various social groups and so on. During this year, we have witnessed the construction and restoration of the houses damaged as a result of the earthquake in Shamakhi, Aghsu and Ismayilli, as well as the placement of IDPs in residential complexes. Overall, in the last 18 years, more than 100 modern settlements have been created for refugees and internally displaced people.

The investment programs implemented for improving the social infrastructure, sustainable increase of pensions, scholarships and salaries are an inalienable part of the social protection events.

It is seen from the budget document that the expenditures aimed at the low-income groups of the population will be one of the priority directions next year.

Employment

The employment of the population gives an opportunity to the state to reduce social expenditures. Along with this, opening workplaces, ensuring employment can also be assessed as the social policy of the state.

Annually, 100, 000 young people enter the work market in Azerbaijan. The increase of the employment of the youth is an inalienable part of the employment policy of the Azerbaijani government. Currently, the unemployment rate among 14-29-year-old youth is 9,2 percent. Overall, the unemployment rate in the country is 5 percent.

The events held for increasing the employment of the population, the diversification of economy, the stimulation of agriculture give us a reason to say that this number will positively change during the upcoming year.

 

Vusal Mammadov

Analytical Group