2017 September 09 ( Saturday ) 11:35:02
- EVENTS OF AUGUST
- FOCUS OF MONTH
- FINANCIAL SYSTEM
- FUEL AND ENERGY SECTOR
- POLITICAL BACKGROUND
01 - President of the country signed a regulation on the Financial Stability Committee.
02 - Kaspersky Lab and Delta Telecom signed an agreement on cooperation.
03 - President of Azerbaijan Ilham Aliyev signed an order on speeding up the construction and modernization of the Baku International Sea Trade Port complex, which envisages the allocation of about 70 million manat.
04 - President of Azerbaijan Ilham Aliyev held a republican meeting in the Gakh region dedicated to the development of silkworm, tobacco and hazelnut production.
07 - Within the framework of the visit of the President of Turkmenistan Gurbanguly Berdymuhammedov to Azerbaijan, eight agreements on cooperation were signed.
09 - The Ministry of Taxes has promulgated new rules for wedding services in restaurants and holiday homes.
10 - The State Program for the Development of Tobacco Industry for 2017-2021 was approved.
14 - The import of jet fuel was exempted from customs duties for 90 days.
16 - Persimmon Producers and Exporters Association was established.
17 - The Cabinet of Ministers increased the authorized capital of CJSC Azerbaijan Railways by 79 million 915 thousand manat or 11%.
18 - Baku"s Nasimi District Court approved the plan for restructuring the external debts of the International Bank of Azerbaijan.
20 - In the presence of the country's President, the largest logistics center in the west of the country was opened in Shamkir.
21- Negotiations were held in St. Petersburg between the head of SOCAR and the heads of Gazprom and Rosneft on further cooperation.
The Energy Regulatory Authority of Turkey issued SOCAR Turkey Energy a license to store liquefied petroleum gas (LPG).
23 - President of Azerbaijan Ilham Aliyev approved the structure of the Cabinet of Ministers of the country.
24 - The State Committee for Property Issues liquidated the Menzil Tikinti Techizat OJSC, established in August 1999: this is the first time that a state-owned enterprise made eligible for privatization is liquidated by a decision of the body responsible for its preservation and privatization.
25 - Moody's Investors Service lowered the corporate family rating of SOCAR to Ba2 from Ba1 with the Stable forecast on the company's ratings.
26 - The Chinese government allocated a $ 3 million grant to Azerbaijan for alternative energy.
30 - BP-Azerbaijan resumed production of gas and condensate from the Shah Deniz field after two-week preventive works on the Alfa production platform.
FOCUS OF MONTH. For any country today it is important to be in the trend of the world economy - more precisely, to get into the cycle of the emerging stable trajectory of world economic growth. Despite the political chaos in the world, some economists believe that a large cycle of the world economy is now coming to an end and it is entering a growth cycle. This growth is already going on in some key links - in the US and in the EU. Hopes for this new steady growth are also reinforced by the transition of the world economy to a new technological order. One cannot ignore the accompanying effects of the transition era: since this year the interest of governments in Bitcoin and other crypto currencies has significantly increased, which can fundamentally change the whole character of the banking system. In Japan, crypto currency was recognized as a payment instrument operating throughout the country, and a group of the largest banks in Western Europe decided to issue their own crypto currency.
In these conditions, it is important for Azerbaijan to get out of the current crisis as quickly as possible on the trajectory of growth and to find its place in the ongoing process. The speed of such an exit depends on a set of institutional conditions. Creating such conditions requires structural reforms in the economy. And such reforms, in turn, may require certain political reforms.
For a crisis, authoritarian regimes may seem more convenient, because centralization helps to mobilize all the resources of the economy. But the problem is that in such systems, an economic step is often correlated not only with future growth, but also with the survival of the existing political system. And here there is a contradiction. Even after starting economic reforms, the government stops every time, where these reforms require political changes. Many experts emphasize that the adopted strategic road maps of Azerbaijan's development will be incomplete at the level of execution just for this reason. The authorities are constantly evading the idea of reforming the judicial system. They pretend that this does not affect the economy in any way. But an independent fair judicial system could strengthen the confidential relations within the society itself, so important at the time of the crisis. And, of course, it would significantly increase the confidence of foreign investors in the country. The authorities also do not hear calls to create an ombudsman institution for business rights, although it would seem that this is an essential part of the current reforms. The managed Association of Entrepreneurs of Azerbaijan suits them much more. In conditions of a fairly shabby civil society, they consider it unnecessary to create new civil institutions. And the work would be enough for them. If the country had an ombudsman for business rights (and here it is necessary to speak, first of all, about small and medium enterprise), he would surely raise a fuss about the unattractive fact that the National Fund for Entrepreneurship Support (NFES) has been lending to mostly large capital in recent years. This is indicated by the statistics of NFES itself, created, among other things, on taxpayer money. Previously, NFES maintained a large business by 70%, but now this figure has become even higher. In the first half of 2017, 83.6% of soft loans were granted for financing projects requiring loans of 10 million manat and above. Out of 62.2 million manat, 52.9 million manat was allocated for financing 18 projects. In total, 690 projects were financed in the first half of the year, and about 7 million manat (11% of the loan portfolio) was allocated for financing 659 (95.5%). One can argue that this is the case, because large economic groups are more reliable borrowers. But things are bad with lending today. And it is unfair when a large holding company or its "daughter" receives preferential loans, while such structures often have their own banks where they can be credited. But it is cheaper through NFES.
Without reliance on small and medium enterprise today, no successful economy could be built in the world. According to some estimates, its contribution to the GDP of Azerbaijan is no more than 3%. In any case, it is indisputable that it should be raised. And it would seem that most of the barriers to the creation of SMEs have been removed, but their normal functioning is still not easy. Expert Akram Hasanov expressed on his Facebook page the almost paradoxical idea that the state structure, which is the first enemy of entrepreneurship and the development of a market economy in Azerbaijan is the State Committee for Property Affairs (SCPA), while law enforcement agencies, courts and others play a secondary role in creating barriers to business. But his position is clear: he rightly believes that the main institution of a market economy is the right to property and, first of all, the right to own property and land. And in his opinion there are big problems in the realization of this right. SCPA, in his opinion, specifically draws up land ownership documents (that is, "bills") which are not accurate, and if they are formalized, then the boundaries are incorrectly specified. Once it turns out that you do not own the property that you thought was yours. Hasanov noted that the documents of business facilities are mainly in a deplorable condition and the State Committee specifically creates such conditions that businessmen are dependent on the Committee. The problem itself dates back to the times when there was the State Committee for Land Use, and the cadastre of all real estate in the country is not completed to this day. Let's add that the business is under a double press: on the one hand, the bureaucracy presses on it, and on the other hand there is big capital, often considering that this business just gets under its feet and creates problems.
Excluding the highest layer of business, lending to private entrepreneurship continues to be the Achilles" heel of our economy. However, we seldom look back on the experience of neighboring countries, even friendly ones. The rise of the Turkish and Azerbaijani economy fell on the beginning of the 2000s. But today Turkey has a GDP of $ 25,000 per capita, and it does not look like we could reach this mark in the foreseeable future. And here is the simplest explanation of the economic breakthrough in Turkey: private sector lending in Turkey increased from 14.5% to the country's GDP in 2001 to 62% in 2016. External experts even express surprise that in Turkey for almost two decades there has been no overheating of the economy or financial crisis. But in the past decade, Azerbaijan had even more financial opportunities than Turkey and knowingly Azerbaijan is one of the largest investors in Turkey. Apparently, the lack of institutions or freedom of business apparently led to that.
Another problem, most likely, lies in the fact that the authorities are afraid to share their powers with the society (except perhaps the creation of legal entities of public law, which, unfortunately, fell on the days of lack of money). Perhaps Azerbaijan will have to go through what Kudrin offers for Russia - "optimizing the state." It's not just about improving the governance structure. As a technocrat, he scrupulously counted (of course, with the help of the team) that in 2003 the Russian state had 5.1 thousand functions, in 2010 it had 7.1 thousand, and in 2016 it had 10.4 thousand. Hardly anyone is engaged in such calculations, although it can be seen with an unaided eye that the powers of the authorities are growing. Of course, the government understands this and here one can also recall attempts to reform the civil service, budget reforms and forcing the creation of e-government. Social services have become better due to the creation of the Asan Khidmet service, but overall, management effectiveness has hardly increased. Meanwhile, the public sector is almost always ineffective in management, as the managers of state enterprises very quickly accept state ownership for their own, and this is the beginning of corruption. In recent years, no case has been recorded in the country, when a working state asset has been taken out for privatization trades. There is always an object proposed, which has long been "lying on its side." And even making a big deal, the state is endlessly vacillating. The mining industry in Dashkesan has been sold for twenty years (and once it has already passed into private hands), but in recent years there has been no buyers for this asset.
At this new stage of development, the economy will badly need transparency. One could understand the behavior of economic authorities during the two devaluations. They believed that openness could increase inflationary expectations. But you can also remember the erroneous steps of the same CBA, which accelerated these expectations much more. But who can explain why the CBA refuses to display data on the country's international investment position or a more complete version of the country's balance of payments. Is not the banking crisis a consequence of the complete closure of the same IBA and the lack of basic control over its activities? Who is Ashraf Kamalov, a name that flashes in dozens of JSCs, LLCs and banks? Why, a decade after the adoption of the law on the declaration of income, do officials categorically refuse to declare their income? Part of the blame is the government itself, which does not dare to introduce an amnesty of capital. But the very bureaucracy is very organized in opposition to these schemes. It is very interesting that it was still possible to return the budget to the results of the corruption and embezzlement processes in the former Ministry of National Security, the Ministry of Communications, and in the same IBA. Perhaps, Azerbaijan needs an institution of procedural agreement. It is doubtful from a moral point of view, but not at all bad in terms of budget positions.
Meanwhile, the optimism of the government is based on a simple message: we must wait these two years, and then everything will go better. In a sense, the situation should improve already next year, when a number of large industrial enterprises will enter service. And further, revenues from gas exports from Shah Deniz-2 should appear. Literally one of these days the agreement of the government and BP on expansion of extraction on ACG will be signed.
Meanwhile industrial districts are being created everywhere, and agro- and industrial parks have been established in Sumgait, Mingachevir, Neftchala, Masalli and in many other cities and regions of the country. There is already a need to assess the effectiveness of such sites. It is good, for example, when they are created under some kind of already planned enterprise: in the same Hajigabul it is built under the large textile enterprise of Gilan Holding. MP Vahid Ahmadov, who is well versed in the economy, believes that these structures will not bring big profits to the country, but the positive thing about their creation is that new jobs are being created, and people are starting to produce some products. As priority for the development of the country, he considers the development of heavy industry, for which, he believes, there are all prerequisites - from raw materials to metallurgical enterprises, and sometimes even surviving specialists. In any case, he believes, the country should produce the equipment for the oil industry itself.
On the part of the government, it seems that today not so much effort is invested in any sphere as in the agrarian sector. The entire structure of agriculture is being revised. Here there are risks - radically increasing the crop area under a new crop, we must remember that sometimes this irreversibly changes the nature of the soil, and it may take years to return to the old crop. Of course, agriculture will help increase employment in the economy, support exports, and strengthen the country's food security. But food security is also not easy: agricultural exports began to grow, but the volume of imports of food products in the country over the past three years increased by 24%. The calculation for a breakthrough can be associated only with highly technical crops and a clear emphasis on the development of agrarian processing, as well as on the development of industries where added value is growing throughout the processing chain.
Azerbaijani business continues to receive investment promotion documents. The Ministry of Economy informs that to this day 168 business entities were provided with 182 investment promotion documents. "As a result of these projects, 1.6 billion manat will be invested in local production and more than 11,000 new jobs will be opened," it was reported. The total amount of benefits received by entities from more than 700 documents on investment promotion is $ 30.5 million. It remains to wait, when these promised investments will work in full.
Investments are not critical enough. Business structures make investments in smaller and smaller amounts. For five months of this year, it amounted to only 251 million dollars, while for the same period last year the same figure was $ 512 million, and in January-May 2015 - $ 2.1 billion. The fact is that investments are falling everywhere. Analyzing the investment situation in the country, the economist Natig Jafarli notes that mass withdrawal of foreign investors from Azerbaijan is a serious signal to the government about miscalculations in the implementation of economic policy, which resulted in actual paralysis of the banking sector and a number of industries. To the chronic problems, such as corruption and monopoly, there was added a reduction in business activity after the devaluation of the manat, a decrease in the purchasing power of the population, and a decrease in the interest of foreign companies to work in Azerbaijan. And worst of all, local businessmen start leaving Azerbaijan, investing in countries where the regime for investors is better and where there is a favorable economic environment.
FINANCIAL SYSTEM. Two-thirds of the year has passed and the rating agencies and IFIs are in a race to review the country"s GDP for this and next year (see the Annex). Almost everyone agrees that the recession will continue this year at the level of 1% (only Moody"s forecasts that it will amount to 1.5%).
The level of the country"s debt is also carefully assessed, although this debt is estimated in a truncated form, as only the state"s net debt. For several months in the first two-thirds of the year it increased from 18.2% in relation to GDP to 18.9%, amounting to $ 7,172,600,000 or AZN 12,208,500,000. But in general, the situation remains satisfactory, if we compare this indicator with Russia. In Russia, the country"s external debt grew by 3% by the end of the half-year and amounted to 529.6 billion dollars, that is, it is already higher than the amount in the reserve fund of the country. While in the middle of last year the external debt was 41.0% of the GDP, in the middle of this year it had already fallen to 33.9% of the GDP, but 30% is considered to be the "security threshold" for corrupt, monopolized and managed economies. In general, according to other estimates, the dangerous level of public debt begins after it begins to exceed 40% of the GDP. Azerbaijan still has noticeable advantages, especially given that while preserving the reputation of a financially stable country with a sufficient level of reserves (foreign exchange reserves and SOFAZ assets), the country retains the possibility of relatively inexpensive borrowing in international capital markets.
Meanwhile, all external observers, without speculating, name three current reasons for the economic downturn: low oil prices, a decline in oil production and ongoing crisis phenomena in the banking system. The first two circumstances have little connection with the institutional changes in the country. It is no coincidence that SOCAR, which joined the OPEC + agreement, believes that today it loses in the volume of production, but wins in revenues. But the state of banks is largely related to the institutional problems of the economy.
From month to month there is the same criticism of the Central Bank of the country: lending to the economy is falling and the real sector is short of money. The Central Bank traditionally believes there is as much money as the economy is able to master painlessly. It consistently leads its line to maintain a stable exchange rate of AZN and low inflation. With inflation, it does not work, although the Central Bank argues that since the second half of the year in the economy, inflation expectations have decreased. In addition, all experts unanimously assert that the current inflation is of monetary origin, and, most likely, is the inflation of costs, that is, ultimately, associated with low labor productivity in the economy. Stabilization of the rate was really possible - all last months it keeps on a mark of 1.7 manat per dollar. Some experts estimated that the ratio of the monetary base to the CBA"s currency reserves is adequate to the existing exchange rate of the manat, and there will be no surprises with oil prices (since all deals are already contracted by the end of the year), and therefore no surprises are expected with the course. At the same time, the Central Bank keeps a clear eye on all other parameters affecting the current exchange rate of the manat - the balance of payments and the external debts of the country. One of the reasons for the CBA"s confidence is that, despite the decline in trade (in seven months it fell by 6.9%), imports were falling more rapidly than exports, and trade surplus was positive - $ 1.783 billion (only 0.3% less than the level in annual terms).
It should be noted that the policy of the Central Bank first of all helped the bank replenish liquidity and gradually get out of the crisis. The CBA reduced lending to the banking system, especially as the current refinancing rate continues to be high for banks - 15%. The net requirements of the CBA to the banking system amounted to 6.5 billion manat. But of them, banks owe the Central Bank only 700 million manat, the rest is the funds allocated to Agrarkredit in connection with the crisis in the IBA.
By the way, it is thanks to the high rate that banks have even more turned down lending to the economy, preferring to increase their income due to risk-free and profitable investments of CBA bonds in manat deposits. It seems that this is one of the reasons why lending to the real sector freezes. Crediting in the manat by banks has significantly decreased. Whereas in March 2016 the total lending in AZN was AZN 10 billion (only a few months after the second devaluation), then on July 1, 2017 it was AZN 2 billion less (AZN 8 billion).
The monetary base for the half-year grew by 6%. Banks got a new impetus for expanding liquidity - interbank lending has resumed, and the number of notes issued by the Central Bank grows in volume. The data on the indicators of the banking system for the half-year, presented by several agencies (including Turan News Agency"s review of markets), show extremely uneven growth in the indicators for banks. But it allows you to make certain judgments. They show, for example, that only half of the banks are truly stable, and the rest are always at risk. The leading ten banks are also quite obvious, judging by the bank profit and the capital of these banks. FIMSA, apparently, decided to stop the process of reducing banks, as their liquidation and bankruptcy turned out to be very problematic issues.
The ratio of the money supply to the monetary base, which shows the multiplicative capabilities of the banking system, was 1.3-1.4 (in Europe, the multiplier effect of money is 5-8%). So in the best years, lending grew not due to new money created by the banking system, but due to the growth of the monetary base due to the huge flow of money entering the economy. When this multiplier drops to 1, banks become pawnshops, lending money on bail, but with arbitrary interest. And not casually in the conditions of the decreased trust between banks and borrowers, pawnshops began to blossom: that is important in the absence of a full law on pawnshops.
Large problems accumulated in consumer lending. Traditionally, they accounted for almost half of all loans issued by the banking system. The move to the peak point of this lending began in 2011 on the wave of consumer excitement. These loans were never cheap (during the crisis they were even limited to a marginal rate of 29%). But, as the economy was on the rise, people confidently took out loans, and banks willingly gave them out. The crisis radically changed the attitude towards the problem. Approximately half of all consumer loans in the country are bad loans of borrowers being physical persons. The law on their bankruptcy does not work yet, although it is adopted. The atmosphere of universal mutual distrust between banks and borrowers is strengthened by the fact that consumer loans still grow in price, and bank supervision over borrowers taking loans for consumer spending has intensified. The banking system pays for issuing loans in foreign currency. Experts also note another fundamental change in consumer lending - earlier loans were taken to maintain the consumer level, and now - due to a sharp decline in revenues. Some of the borrowers turn to banks for restructuring and banks meet them. The other part maliciously evades payment, and the expert Akram Hasanov is convinced that tough measures should be taken against such borrowers, including punishment of bank managers who colluded with borrowers.
Finally, an agreement has been reached to create a bank ombudsman in the country, which will primarily resolve debt disputes between banks and customers. The new institute will function under the Association of Banks of Azerbaijan. The Ombudsman has already started working since September, although his functions will be limited to disputes over small credit debts - up to 2 thousand manats. But reducing the client base of banks and tens of thousands of court cases between banks and clients suggest that even this work will not be easy.
In August and early September, the IBA"s external debt restructuring was completed. Although these debts have fallen on the shoulders of the state, this is a serious step towards a relative purification of the banking sector. In any case, immediately after the full legal completion of the restructuring process, the rating agency Fitch announced its readiness to revise the IBA rating in a positive way.
Today, it is very difficult to predict when the credit activity of banks will recover. A banal answer would be "when the national economy will work". But, if we say it concretely, much depends on institutionally exact decisions. One of them is a financial headquarters, which is called the Financial Stability Committee. The President has just approved its structure. The CBA and FIMSA seemed to balance themselves in weight and we need to accurately outline their authority. And everyone should get the right to be completely independent within the limits of these powers. The CBA is reproached for not following the state of affairs scrupulously: not only in the IBA, but also in Bank Standard. But there is a suspicion that it was not even allowed to fully inspect them. The head of the IBA felt more important figure than the chairman of the CBA. The rules of the game now, apparently, will change: in the financial system, by definition, there should not be untouchables.
FUEL AND ENERGY SECTOR. Oil prices will not go into sustainable growth, but no one seems to be counting on it. The current level of prices ($ 50 per barrel and above) suits the oil-producing countries, where the budget was drawn up with a forecast of oil prices of $ 40. There are no fears that prices can go down, although objective reasons for this are still clear: according to the IEF, the demand for oil in 2017 will grow by another 100 thousand barrels, and oil reserves in oil storage facilities have decreased. The cartel is still in reflection, while Russia and Saudi Arabia are negotiating about the extension of the freezing of the production level for an additional three months. However, some large companies are adjusting to average prices at $ 41-42 by mid-2018. The same pessimistic scenario is set up by the Ministry of Economics of Russia. A similar forecast was made by Saxobank, however, more based on the position of investors in the market.
It is critically important for Azerbaijan that the South Gas Corridor project be successfully and timely implemented, which will open the opportunities for the sale of gas and gas condensate from Shah Deniz-2. Directly in the field, the work, according to BP, has been carried out at 95%. But the situation around the supply of gas is changing continuously. We have already written about the problems in the construction of the TAP in Italy. But here the Italian government has strictly interfered, and the ecological group had to retreat. In August, the Snam-TAP project was launched, which involves the construction of a 55 km interconnector that will connect the existing TAP gas pipeline terminal to the Italian gas network Snam Rete. There were other problems. A couple of months ago, everyone confidently talked about building a gas pipeline from Israel via Cyprus with the further connection of this gas pipeline to TANAP. This would significantly increase the profitability of the TANAP project. However, according to some information in August, gas from the Israeli Leviathan deposit is going to be bought by Shell for supplies to Egypt.
Meanwhile, the volume of production in Azerbaijan is constantly falling. According to the results of 2016, 31.1 million tons of oil was produced from ACG. Judging by the current indicators, in 2017, ACG will produce about 28 million tons of raw materials. Such sharp rates of falling of extraction on ACG have not been observed since 2012. The government also indicated in its forecasts last year that 28 million tons of oil can be extracted from ACG until the end of 2020.
The rating agency Moody"s for the first time drew attention to such purely Azeri phenomenon as blurring of borders between SOCAR, SOFAZ and the budget. This greatly complicates the assessment of the real situation in the economy, because roles are constantly changing here. Suffice it to say that in the currency market SOFAZ is the main currency seller and the rate controller, while the CBA buys more currency, replenishing reserves. SOFAZ receives all the profits of SOCAR, but also supports the budget and acts as an investor for SOCAR"s strategic projects. And the latter increases revenues to the budget and since recently it is almost the main structure that supports the country"s stock market through the issuance of its own bonds.
According to the results of 2016, the profit of the Azerbaijani state from ACG (directly to the Oil Fund) was $ 5.1 billion. The peak period of profit from ACG was recorded in 2011 - $ 19.4 billion. This year, within seven months, the Oil Fund received $ 3.609 billion from the ACG project. Based on this data, Turan News Agency calculated that $ 503 million was received by SOFAZ from ACG in July.
And in July and August it was possible to observe the departure of foreign companies from the country. But their mass withdrawal should not surprise. A significant part of these companies is engaged in the oil service. And here, on the one hand, the amount of work for such companies is reduced, and on the other, the industry is optimizing itself.
But all external subdivisions of SOCAR worked in a stable regime. The profits of Petkim, which SOCAR acquired, almost doubled. The oil company was looking for any niche in order to earn cash, while large projects are on the way. In particular, it will deal with the sale of LNG to the Turkish market, for which it received a license this month. SOCAR Trading SA operates without failure; according to the company"s recent reports, in 2016 it had revenues of $ 25.9 billion. In the reporting year, in the world markets, SOCAR Trading SA sold 50 million tons of products (an increase of 6.4% compared to 2015), of which 29 million tons fell on oil and oil products of third parties, and 21 million tons - on Azerbaijani oil. It also sold more than 10 million tons of oil products in world markets.
Some problems of SOCAR are already becoming permanent; in particular, this is a problem of gas shortage. Surprisingly, during almost one month the head of SOCAR, Rovnag Abdullayev, twice already negotiated with the head of Gazprom Alexei Miller, and the last time - with the head of Rosneft Igor Sechin. The official version is that it was a multifaceted negotiation on cooperation. However, judging from previous negotiations and agreements with Gazprom, it is clear that it was about delivering 3-5 bcm of Russian gas, because many new industrial enterprises, and the economy as a whole, will demand more and more gas.
In the next few years, SOCAR expects to receive gas from several new sources. The company expects 1.5 bcm of gas from the first phase of development of the field Absheron in 2019 and another 5 billion in from the second phase of these developments in 2022-2023. Already in the second half of 2018, exploration drilling at the Babek field will be launched. In the next 3-5 years, SOCAR intends to build several new platforms on the gas field Umid and drill 8 highly profitable wells there.
In addition, SOCAR would like to effectively use its gas storage system. Negotiations on this issue with Iran and Russia were unsuccessful. And now it would like to buy Turkmen gas through Iran, pump it into its gas storages in summer and sell this gas at a higher price in winter. Energy relations with Turkmenistan are a special issue. The transit of Turkmen oil through Azerbaijan is very successful (see the Annex). This year it will become even higher, because Turkmenistan refused to supply gas via the troubled Makhachkala port. But Turkmenistan is also definitely aiming for gas supplies to Europe, and this decision is wholly supported by China as the key investor in this country"s gas development. Azerbaijan (for many reasons) is pretty cool with this idea, although under certain conditions (for example, joint development of some deposits in the Turkmen sector), it would take this step. Turkmen gas, as we see, can be obtained through Iran, and much depends on the price of Turkmen gas. In early August, President Berdymukhammedov visited Baku, but the visit left a strange impression: not a single document on cooperation in the oil and gas industry was signed. In the same month, negotiations were held between the leadership of Georgia and Turkmenistan. Here, at least, a preliminary agreement was reached on the opening of a new transit corridor - Turkmenistan - Azerbaijan - Georgia - Romania. On hearing the idea seems very familiar: it was in this direction that the long-forgotten Agri project for LNG supplies to Romania was to develop at the time. The project was then abandoned because of the high cost.
INFRASTRUCTURE. The chairman of the branch of the ruling New Azerbaijan Party on the Azerbaijan State Railways, Kheyrulla Humbatov, reported in August about the nearest plans of his department. He noted that the program for the development of railways is being prepared in Azerbaijan and, according to the investment portfolio for the next 3 years, it is planned to overhaul the Yalama-Astara railway, launch the Baku-Gandja-Baku high-speed train and build a second bridge over the Kura River. The plans for the following years include the laying of railway lines to the Heydar Aliyev International Airport and the Gabala and Shahdag tourist centers. Currently, work is underway to design these lines.
Plans are big, but will there be enough resources for all this? The search for profitable niches in the transport infrastructure is everywhere. But the own funds of the Azerbaijan State Railways are unlikely to be enough: it is possible that Azerbaijan will again turn to external creditors. It is also characteristic that in these months the company"s authorized capital has grown. To this, apparently, there are also serious calculations for future revenues from the Baku-Tbilisi-Kars (BTK) and North-South projects.
Turkish Transport and Communications Minister Ahmet Arslan said in an interview with Turk TV Haber that all works on the BTK project will be completed in September, citing, however, some shortcomings on the Georgian section of the future road. In a word, in October the new railway should start, especially as the running-in of the road on its various sections has already passed.
Azerbaijan, for its part, is doing everything to launch the North-South project as soon as possible. A few months later, the railway, which will connect the Iranian and Azerbaijani Astara, should be ready. The talks about the allocation of 500 million USD by the Azerbaijani side for the completion of the Resht-Astara railroad construction have been resumed. The Azerbaijani government has not stated anything on this topic so far. But there is a fact that a logistics center is being built in Iranian Astara (with the joint financing by Azerbaijan and Russia).
Rational solutions are becoming more and more, because this is what attracts freight forwarders. Subsidiary structure of Azerbaijan Railways CJSC, ADY Express, announced the beginning of the operation of the container blocks Poti / Batumi - Keshla. Containers will be sent three times a week, and will travel 900 kilometers in 30 hours. Cargo owners and carriers will pay $800 for the use of 20-foot containers and $1,000 for 40-foot containers," the CJSC stated.
These infrastructure projects are increasingly focused on the transcontinental project One Belt - One Way. In August in Urumqi, China, another international conference was held on this global project. The director of Baku International Sea Trade Port CJSC Taleh Ziyadov took part in it. Speaking at the conference, he noted the role of the port as a hub between Europe and Asia and spoke about the current activities and prospects for the development of this port, including the economic importance of the Free Trade Area (FTA) created within the port.
The free trade area is a key word for understanding the geopolitical and geo-economic scale of the Chinese project. Brexit always seemed a problem far from Azerbaijan. However, trying to compensate for all the political and economic consequences of withdrawing from Europe, the UK has already aimed at developing relations with Turkey, China, Pakistan and India through a privileged trade partnership. And the basis for such relations, apparently, will be the creation of FTAs between countries. By the way, against the backdrop of worsening relations with the EU, Turkey has already proposed the UK to create an FTA. Apparently, such FTAs will be formed everywhere, and the process has already started. China has concluded an agreement on the establishment of an FTA with Georgia. And Turkey has recently signed an agreement on the establishment of an FTA in the Nakhchivan Autonomy of Azerbaijan.
The Azerbaijani government also attaches great importance to the aforementioned project for the establishment of an FTA in the Baku International Sea Trade Port (BISTP). As an example of how much importance is given to this project, it should be noted that the second phase of the construction of this port has begun, for which large funds have already been allocated from the budget. Here it is necessary to mention the recent decision of the country"s leadership on the construction of a new power station in the Alat area, which should serve the BISTP and the free area around the port. It would seem that the area has the largest power station in the country, Janub TPP. But, apparently, the desire to ensure trouble-free operation of the FTA was so great that they even decided to undertake unforeseen expenses.
It might seem that such an important project for Azerbaijan, as the Kars-Igdir-Nakhchivan railway, fell out of the agenda. But it turned out that intensive discussions of this project continue between Ankara and Baku, and, moreover, Iran has been invited to take part in it. The project is really important for our southern neighbor, as it can give a new impetus to the development of the depressive regions of Turkey and Iran (and Nakhchivan is already connected with Iran by railroad) and become the basis for economic recovery in these regions. For Azerbaijan, this would mean the removal of all economic problems of the Nakhchivan autonomy, which is largely supported by budgetary subsidies.
POLITICAL BACKGROUND. August has always been a busy month. The present has not become an exception. The tone of the statements of the leaders of North Korea and the US turned out to be extremely harsh: many thought it was a war. The decision of the UN Security Council on economic sanctions against the DPRK finally provoked the North Korean leader: the country even began to launch ballistic missiles in the direction of Japan and conduct new nuclear tests. The situation is dangerous, and the consequences of direct military operations on the peninsula and around it would be catastrophic even without the use of nuclear weapons. South Korea has 25 nuclear power plants, which are vulnerable to the DPRK armed forces. The problem continues to persist.
And in Syria, the zones of de-escalation have been most probably agreed and the positions of the ISIS have been fundamentally undermined. Nevertheless, the issue of preserving the integrity of Syria is being pushed back to the background. In Europe, the wave of ISIS terrorist attacks did not subside: in August, bloody events unfolded in the heart of Barcelona.
In Iraq, a referendum on the independence of Iraqi Kurdistan is scheduled for September. This is another problem: as expected, this has been a major concern for Turkey and Iran, with Kurds making up a significant part of the population. This project is backed by some big powers. But if the Iraqi Kurdistan is created, then Israel can become the main political beneficiary, because it will have a powerful tool for influencing Iran and Turkey. So far, there are not the slightest prerequisites to the fact that the tension in the Middle East will subside. And new problems only add to the old ones.
To a large extent, this tension is facilitated by the political inexperience of President Trump. Even being limited by the US political system, he continues to behave arbitrarily. During the events in Charlotte, he almost failed to bring the country to the beginning of civil confrontation with his careless statements. He continues to press on Iran, although the latter adheres to the letter of agreements signed in the Obama presidency: but it is with the legacy of his predecessor that Trump fights.
The tension on the contact line between the Armenian and Azerbaijani armed forces persisted throughout August. Last month it became even more noticeable that Armenia was forcing its move towards signing an association agreement with the EU. The very tone of the Armenian leadership on this issue is becoming more confident. It seemed that even the August meeting between President Putin and Sargsyan had changed little here. The signing of the agreement with the EU will take place in three months, but the usual immediate Moscow accusation against the colleague on the Eurasian Economic Union and the Collective Security Treaty Organization (CSTO) has not happened yet. So far, many questions remain. For example, how does this movement to Europe correlate with the fact that Armenia links any of its actions with the Karabakh conflict in one way or another? Can this be a blackmail of Russia so that it chooses a more favorable position for Armenia in the Karabakh settlement? We should not exclude this and, perhaps, even extreme versions: for example, that Russia itself privately approved this political activity of the Armenian leadership in the European direction. In purely economic terms, this would mean integrating Armenia into a more successful economic system. And since the EU did not object to the simultaneous future presence of Armenia in the two unions, is it possible that we are dealing with an experiment? For Russia, which largely controls the economy of Armenia, it can be an indirect exit from the confrontational regime with Europe. But the beginning of September seems to have dispelled the illusions: Moscow shouted at Armenia for its participation in the NATO exercises in Georgia.
As for Azerbaijan, he has been negotiating with the EU for a long time on concluding a bilateral agreement on strategic partnership, stipulating that there should not be any political conditions for Azerbaijan in the agreement. Most likely, it implies that the government will not make any concessions to civil society.
So the August tension reached Turan News Agency. The Agency"s director, Mehman Aliyev, was arrested for three months. You can find out the twists and turns of this story in the Agency"s news line. Judging by the arrest of the Agency"s head and the closure of its bank accounts, it is an attempt to completely stop the Agency"s activities. Now the question is whether this decision was spontaneous, or there is a long-standing and deliberate decision to close, as many believe, the last independent media in the country. Worst of all, if this is an attempt to once again spread fear in the society. Mehman Aliyev has a lot of defenders - from the US State Department to people usually shunning politics. The Agency, albeit in a truncated format, is still working - and this is certainly a form of resistance.
OСНОBНЫЕ МАКРОЭКОНОМИЧЕСКИЕ ПОКАЗАТЕЛИ
|Основные макроэкономические показатели||2017 гЯнварь-ИюльB млн. AZN||VII - 2017 VII- 2016 %||2016 гЯнварь-ИюльB млн. AZN||VII - 2017 VII- 2016 %|
|Bаловой внутренний продукт||37 645,4||99,0||32 122,6||97,0|
|Промышленная продукция||21 834,1||94,6||17 616,6||100,9|
|Сельхоз. Продукты||3 688,7||101,2||3 290,4||102,6|
|Денежные доходы на душу населения (в манатах)||2 853,4||106,4||2 670,9||107,3|
|Грузооборот на трансп., ком. Млн. тонн/км||126,2||102,1||123,6||97,9|
|Капиталовложение||8 728,8||99,7||7 959,7||70,3|
|Оборот розничной торговли||18 987,3||101,8||16 169,5||102,0|
|Услуги||4 444,7||100,5||4 036,6||101,1|
|Экспорт ($ млн.)||5 268,7||140,1||3 821,5||53,0|
|Импорт ($ млн.)||3 409,7||84,3||4 047,2||86,1|
|Среднемесячная зарплата с начала года (в манатах)||522,0||106,9||487,5||106,8|
|Индекс потребительских цен||X||114,0||X||110,6|
BАЛОBОЙ BНУТРЕННИЙ ПРОДУКТ B НЕФТЯНЫХ И НЕ НЕФТЯНЫХ ОТРАСЛЯХ
|Январь-июль||Январь-июль 2017 по сравнению с январем- июль 2016 года, %|
|Bаловой внутренний продукт||37645,4||32294,3||99,0|
|- нефтяной сектор||14390,7||11491,2||93,1|
|- ненефтяной сектор||23254,7||20803,1||102,2|
* 2016 цифры определены на основе итоговых данных
СТРУКТУРА BBП ПО ОТРАСЛЯМ ЭКОНОМИКИ, ЯНBАРЬ-ИЮЛЬ 2017, %
ОЦЕНКИ МФО И РЕТИНГОBЫХ АГЕНТB ПО РОСТУ BBП (%)
ЦЕНОBЫЕ И ТАРИФНЫЕ ИНДЕКСЫ
|B июле 2017 г. по сравнению с июнем 2017 года.||Январь-июль 2017 по сравнению с январем-июлем 2016|
|Индекс потребительских цен||100,1||114,0|
|Индекс цен производителей||104,5||146,0|
|Индекс цен производителей сельскохозяйственной продукции||100,3||110,5|
ОСНОBНЫЕ ПОКАЗАТЕЛИ ДОХОДОB НАСЕЛЕНИЯ
|B январе-июле 2017 года||По сравнению с предыдущим годом, в процентах *)|
|Номинальные денежные доходы населения, млн. манатов||27716,9||107,5|
|На каждого, манаты||2853,4||106,4|
|Располагаемый доход, млн. манатов||25373,5||107,5|
|На каждого, манаты||2612,2||106,4|
*) B 2017 году были определены показатели на основе новой информации.
СТРУКТУРА ИМПОРТА И ЭКСПОРТА (VII - 2016/ VII - 2017)
ИНBЕСТИЦИИ B ОСНОBНОЙ КАПИТАЛ ПО ИСТОЧНИКАМ ФИНАНСИРОBАНИЯ (%)
|B январе-июле 2017 года, млн манат||По сравнению с прошлым года (в сопоставимых ценах), %||Доля от общего объема, %|
|B том числе: Средства предприятий и организаций||6 251,8||95,4||71,6|
|Другие средства||47,6||2,0 d.||0,5|
ДИНАМИКА ПРОИЗBОДСТBА B ОБРАБАТЫBАЮЩЕЙ ПРОМЫШЛЕННОСТИ в 2016 году и в январе-июле 2017 года
|По сравнению с предыдущим периодом, %|
|Bсего в обрабатывающей промышленности||в ненефтяной промышленности|
ДОБЫЧА СЫРОЙ НЕФТИ И ПРИРОДНОГО ГАЗА
|Типы продуктов||Произведено в январе-июлем 2017 года||Сравнение с прошлым годом, %||Наличие готовой продукции на01.08.2017|
|Сырая нефть (в том числе конденсата), тонн||22 500,6||91,1||484,5|
|произведено продукции||22 471,9||91,1||484,5|
|Природный газ, млн кубических метров||16 606,5||95,1||-|
|произведено продукции||10 870,9||98,7||-|
BЫПУСК ОСНОBНЫХ ПРОДУКТОB ПЕРЕРАБОТКИ
|Типы продуктов||Произведено за январь-июль 2017 год||Сравнение с прошлым годом, %||Наличие готовой продукции на01.08.2017|
|Автомобильный бензин, тыс. тонн||730,1||107,2||31,5|
|Бензин для применения в нефтехимической /промышленности, тыс. тонн||116,1||101,5||0,9|
|Дизельное топливо, тыс тонн||1 125,0||83,2||115,4|
|Мазут, тыс. тонн||243,8||60,1||5,9|
|Смазочные масла, тыс.тонн||19,5||3,8 d.||6,4|
|Битум, тыс. тонн||103,4||121,1||3,3|
|Кокс, тыс. тонн||128,4||114,2||12,2|
ТРАНСПОРТИРОBКА ТУРКМЕНСКОЙ НЕФТИ ЧЕРЕЗ БТД (B ТОННАХ):
СРЕДНЕСУТОЧНАЯ ДОБЫЧА НЕФТИ НА КОНТРАКТНОЙ ПЛОЩАДИ АЧГ (B БАРРЕЛЯХ):
|Платформы||Начало добычи||I полугодие 2017г||I полугодии 2016г||I полугодии 2015г|
|Чыраг||07.11.1997||56 000||51 000||55 000|
|Западный Чыраг||29.01.2014||87 000||127 000||106 000|
|Bосточный Азери||21.10.2006||77 000||71 000||71 000|
|Центральный Азери||13.02.2005||129 000||153 000||157 000|
|Западный Азери||30.12.2005||116 000||117 000||107 000|
|Глубоководный Гюнешли||02.04.2008||120 000||136 000||145 000|
|Итого||585 000(112 эксплуатационных и 48 технических скважин)||655 000(102 эксплуатационных и 43 технических скважин)||641 000(87 эксплуатационных и 40 технических скважин)|
|Bиды продукции||Произведено в январе-июле 2017 года||По сравнению с предыдущим годом, %||Запасы готовой продукции на 01.08.2017|
|Электричество млн. киловатт-часов||13 156,7||101,7||-|
|Станции на солнечных батареях||25,3||68,8||-|
ДИНАМИКА ПРОИЗBОДСТBА СТРОИТЕЛЬНЫХ МАТЕРИАЛОB
КРЕДИТНЫЕ BЛОЖЕНИЯ B ЭКОНОМИКУ (млрд манат)
|Состояние на 1 июля 2017 года, млн. манат||По сравнению с прошлогодним периодом, % faizlə|
|Bклады населения - всего||6907,1||88,4|
|кроме того:в национальной валюте||1838,4||121,2|
|в иностранной валюте||5068,7||80,5|
ОБЪЕМ ТОРГОB НА БАКИНСКОЙ ФОНДОBОЙ БИРЖЕ (млн.AZN)
ДBИЖЕНИЕ ДЕНЕЖНЫХ АГРЕГАТОB (млн.AZN )
КУРСЫ USD И EUR К AZN
СРАBНЕНИЕ СТОИМОСТИ БАРРЕЛЯ СЫРОЙ НЕФТИ МАРОК BRENT и AZERI LIGHT ($)