Azerbaijani parliament discusses draft budget at extended meeting
By Aynur Jafarova
Azerbaijan's Parliament discussed the draft state budget for 2014 at an extended meeting on November 12.
Opening the parliamentary discussion of the budget package, Parliament Speaker Ogtay Asadov said that the draft budget reflected the country's economic reality.
Informing the MPs on the progress achieved in the country's economy in the last 10 years, Asadov expressed confidence in the preservation of this tendency in future.
"According to the outlook, the volume of the country's GDP by late 2013 will amount to 55 billion manats, with an annual growth of 4.5 percent. The forecast for 2014 shows that the GDP will grow to 58.6 billion manats with a growth rate of 5.2 percent. These rates should be achieved through the development of the non-oil sector, and it is obvious that these tasks will be carried out successfully," Asadov said.
Speaking at the meeting, Finance Minister Samir Sharifov said that the tendency of substituting the oil sector with the non-oil sector will continue at least till 2017.
"The country's GDP is expected to grow by 5.2 percent in the future, while the non-oil sector of the national economy will grow by 10 percent. In 2014, the growth of the non-oil sector's share in the revenues of the state budget will be preserved," the Minister said.
The Minister informed the MPs about the state budget's basic parameters.
"The state budget revenues for next year will amount to 18.38 billion manats. Compared to 2013, budget expenditures will grow by 1.6 percent (213 million manats) and reach 20.06 billion manats. The main reason for a decline in the revenue for 2014 lies in reducing the transfers from the State Oil Fund of Azerbaijan," Sharifov said.
According to him, most of the revenues of the state budget for next year will be provided by the Azerbaijani Ministry of Taxes and the State Customs Committee (SCC).
"7.1 billion manats is planned to be transferred to the budget through the Ministry of Taxes, and 1.51 billion manats is planned to be transferred through the SCC," the minister said.
The 2014 draft state budget was drawn up after taking all the possible factors into consideration, the Minister added.
"The document and the forecasts on the country's socio-economic development in 2014 and the next three years were done after taking all the modern economic tendencies into consideration. It is safe to say that the budget package was insured against possible negative events in the global economy," Sharifov said.
Speaking at the discussion meeting, Deputy Economy and Industry Minister Sevinj Hasanova said that in coming years a stable development will be observed in Azerbaijan's non-oil sector compared to the oil sector.
According to the forecasts, the growth rate of Azerbaijan's economy will be equal to 5.2 percent in 2014. The average annual growth in the subsequent three years is projected at 5.5 percent.
"The average volume of oil production is anticipated at 40.5 million tons, while gas production volume (including the injection to reservoir) is expected to reach 27.4 billion cubic meters. The growth of non-oil sector is expected to be 10 percent and this figure will increase by an average of eight percent in the subsequent three years. As a result, over 72 percent of the GDP in 2017 will be formed mainly in non-oil sector," the deputy minister said.
According to the forecasts of oil producing countries and international organizations, oil prices in Azerbaijan's state budget was accepted at $100 per barrel for 2014, and $80 per barrel for the subsequent three years, Hasanova said.
"It is planned to keep the exchange rate of manat at a stable level in the coming years, and the growth rate of inflation is anticipated at 3-4 percent," she said.
Member of the Parliamentary Committee on Economic Policy Ali Masimli said that expenditures on education in the 2014 state budget should be doubled.
"Currently, the share of education expenditures in GDP is about 2.5 percent. It is necessary to bring them up to five or six percent of the GDP, which would allow for the speedy development of this sector," he said.
According to the MP, the same principle should be applied to the salaries of state employees - teachers, healthcare professionals, and scientists.
"The issue of increasing these people's wages is constantly on the agenda. It is necessary to provide government employees with a decent living. Given the large amount of funds that will be needed for this, a phased increase can be carried out. The result of the application of this principle will be raising the wages of teachers and other public employees to 800-1000 manats," Masimli said.
He also said that the social mortgage mechanism would be more effective if reformed.
Earlier, the draft state budget for 2014 was discussed by the Science and Education, Legal Policy and State Building, Regional Issues, Culture, Human Rights and International and the Inter-parliamentary Relations, Economic Policy, Social Policy, Security and Defense, Natural Resources, Energy and Ecology, and the Agrarian Policy Committees of the parliament.
According to the draft budget, in 2014, the revenues will be 775 million manats lower than the forecasted figures in 2013, and exceed the actual figures of 2012 by 1.103 billion manats.
The budget deficit is projected at 1.679 billion manats, compared to 691 million manats for 2013 and the actual figure of 135 million manats for 2012.
Revenues of the consolidated budget for 2014 were estimated at 21,986 billion manats, which exceeds the forecasted figure for this year by 1.257 billion manats, and the actual 2012 budget performance by 352.5 million manats.
Expenditures will amount to 24,444 billion manats, which is 56 million manats lower than the predicted figure for this year and 5,982 billion manats higher than the actual 2012 budget performance.
The consolidated budget deficit is projected at 2.458 billion manats, making up 4.2 percent of the projected GDP.
The growth of local revenues in the draft budget for 2014 is projected at 11.9 percent -779 million manats. Compared to the actual figure for 2012, the growth of local revenues in 2014 is 46 percent.