Gov`t rules out impact of global crunch on social security
The global financial crisis will not affect social
security payments to citizens in Azerbaijan even if it causes
serious problems for the national economy, according to Salim
Muslimov, chairman of the State Social Protection Fund (SSPF).
"If the powerful waves of the global crisis are sensed in Azerbaijan, we have the potential to pay the allowances of our pensioners," Muslimov told a news conference on Friday in a statement that some economists claimed was merely political populism.
But an increase in pensions should not be expected, as the Fund chairman said the government sees no need for increasing pensions due to falling domestic prices. Only if inflation becomes a problem will financial tolls be used to assist pensioners.
According to Muslimov, the SSPF`s funds amount to some 1.4 billion manats ($1.72 billion) in 2008, or 44% over 2007.
Up to 90 per cent of the amount was spent on the allocation of pensions. Slightly over 100m manats ($123m) remain in the fund from last year.
Average pensions in the country increased 6 manats ($7.4) in 2008 to reach 99 manats ($122).
Azer Mehdiyev, who chairs the Center for Assistance to Economic Initiatives, agreed that the worldwide economic crisis would have no impact on the payment of pensions in the South Caucasus republic but said he could not predict about pensions beyond this year.
"According to projections, the global financial crisis may deepen in Azerbaijan in mid-2009. If expected budget revenues fall short this year, social welfare payments will be met by the State Oil Fund [the body that holds the country`s hefty oil revenues]. It is therefore possible that the state budget will meet these obligations."
Mehdiyev emphasized, however, that if the crisis gets worse this would trigger challenges for the SSPF, whose 60 per cent is funded through the state budget.
"A problem may arise in the payment of wages. This, in turn, may affect the collection rate of mandatory insurance fees," he added.
As of January 1, 2009, the number of people receiving labor pensions in Azerbaijan has reached 1,275,000, an increase of 26,400 in comparison with the same date in 2008.
Over 496,000 pensioners are men and 778,000 are women.
"If the powerful waves of the global crisis are sensed in Azerbaijan, we have the potential to pay the allowances of our pensioners," Muslimov told a news conference on Friday in a statement that some economists claimed was merely political populism.
But an increase in pensions should not be expected, as the Fund chairman said the government sees no need for increasing pensions due to falling domestic prices. Only if inflation becomes a problem will financial tolls be used to assist pensioners.
According to Muslimov, the SSPF`s funds amount to some 1.4 billion manats ($1.72 billion) in 2008, or 44% over 2007.
Up to 90 per cent of the amount was spent on the allocation of pensions. Slightly over 100m manats ($123m) remain in the fund from last year.
Average pensions in the country increased 6 manats ($7.4) in 2008 to reach 99 manats ($122).
Azer Mehdiyev, who chairs the Center for Assistance to Economic Initiatives, agreed that the worldwide economic crisis would have no impact on the payment of pensions in the South Caucasus republic but said he could not predict about pensions beyond this year.
"According to projections, the global financial crisis may deepen in Azerbaijan in mid-2009. If expected budget revenues fall short this year, social welfare payments will be met by the State Oil Fund [the body that holds the country`s hefty oil revenues]. It is therefore possible that the state budget will meet these obligations."
Mehdiyev emphasized, however, that if the crisis gets worse this would trigger challenges for the SSPF, whose 60 per cent is funded through the state budget.
"A problem may arise in the payment of wages. This, in turn, may affect the collection rate of mandatory insurance fees," he added.
As of January 1, 2009, the number of people receiving labor pensions in Azerbaijan has reached 1,275,000, an increase of 26,400 in comparison with the same date in 2008.
Over 496,000 pensioners are men and 778,000 are women.
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