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Economical news
Bulletine Economics 


2017 October 30 ( Monday )  18:01:25
Print version
Русский Azərbaycan

 

Authorities Find New Way to Save on Pensioners

The recent statement of Salim Muslimov, the Minister of Labor and Social Protection of Population on the application of the new formula for increasing labor pensions in Azerbaijan, on the basis of which indexation will now affect the entire amount of labor pensions, caused a considerable part of the Azerbaijani population to lift their mood and spirit.

Recall the amendments to the law On Labor Pensions provide a new form of growth of pensions in the country. The mechanism of indexation of pension, practiced for about ten years, or rather of its insurance part, in the amount of inflation for the previous year, was replaced by the pension indexation scheme in full, but already in the amount of the average monthly salary. Thus, the labor pension in 2018 will be increased in the amount of an increase in the average salary in the country this year.

Greeted by the generosity of the government, the elderly people lined up in long lines at local social protection centers to find out what documents are needed to register the pension and how their pensions will increase approximately in the next year. However, their joy quickly gave way to vexation and disappointment. It turned out that not all labor pensioners expect an increase in pensions. The innovation concerns those working pensioners who went on a deserved vacation six or more years ago. According to preliminary data, there are about 130 thousand such people in the country, considering that today about 300 thousand of the total number of pensioners continue to work officially - in the spheres of education, medicine, science, etc. Consequently, the remaining 170 thousand pensioners cannot count on an increase in pensions.

Will indexation affect only 10% of the total contingent of pensioners in the country? And what about the rest of the elderly? Who will compensate them for the overburden of the family budget in the amount of annual inflation, the level of which has already reached 14%? Do they have enough money in the state budget to index labor pensions if they consider that according to the new legislation, the basic part of labor pensions is abolished in the country?

As you know, earlier the base part was increased by order of the President, and the insurance part was indexed according to the percentage of inflation in the country. Now there is no concept of the basic part, as there is a full amount of pensions. It should be indexed. This is by law. In fact, as it turns out, everything is different.

To the questions of the correspondent of Turan one of the employees of the State Social Protection Fund, who asked not to be named, said the indexation under the new formula will affect 35-40% of working pensioners. As for the rest of working pensioners and all non-working pensioners, the old mechanism will act on them - the insurance part of their pensions will be indexed at the rate of annual inflation, the level of which may be below 14%.

This raises other, equally worrying questions: What prompted the government to move to a new formula for indexing pensions, if the country does not yet have a three-tier pension system, and there are no private pension funds and voluntary social contributions? What kind of indexation is beneficial - in the amount of annual inflation, but on the insurance part of the pension, or the full amount of the pension, depending on the dynamics of the average wage growth?

According to the independent economist Samir Aliyev, neither one nor the other option will play a significant role in improving the financial situation of pensioners.

"What does it mean to index half of the insurance part of the labor pension (on the law, only 50% of the accumulated insurance part of the pension is paid to pensioners - Author), in the amount of annual inflation of 14% or the full amount of pension at an average monthly salary of about 7% for the current year? See, what"s the difference? Although the innovation is presented as a benefit for our pensioners," the expert notes.

The authorities, depending on the state of the budget and the economic situation in the country, change tactics of action in the sphere of pensions. Over the past few years, the age limit for retirement has been changed twice - first from 57 to 60 years for women and from 60 to 63 years for mmen, and this year for both categories this milestone has reached 65 years.

The time of retirement is being carried further and further. The reason for the steps taken is clear - to reduce the burden on the budget, to reduce the amount of social spending, shifting them to the shoulders of the citizens themselves. The authorities save on retirees. This is indicated by the budget of Azerbaijan for 2018. The draft specifies that for payment of pensions, allowances, targeted social assistance, and allowances for internally displaced persons 2 billion 197 million manat will be allocated from the state budget, which is 6.6% less, compared to the current goal.

According to experts, today about 50% of retirees continue to work (officially, or illegally, or as a tutor, domestic servant, private driver, etc.) because of the threat of poverty and they are ready to retire, if at least their pension is the average salary in the country. No rapid effect will be produced by increase either in the age, or in the length of service.--0--

Azerbaijan among Top Ten in Terms of Investment Activity in Turkey

Baku / 30.10.17 / Turan: For the first nine months of this year, 96 companies with the participation of the Azerbaijani capital were established in Turkey. Azerbaijan is among the top ten in investment activity in this country.

According to the Association of Chambers and Exchanges of Turkey, compared to the same period in 2016, the number of established companies with the participation of investors from Azerbaijan decreased. In January-September 2016, 112 companies with Azerbaijani capital were opened in this country.

The initial capital of the Azerbaijani companies established this year in Turkey was 15.3 million Turkish liras (TL), of which 95% was invested by Azerbaijani investors. Last year 112 companies from Azerbaijan invested 10 million TL more in initial capital.

According to the Central Bank of Turkey, for eight months of this year, the volume of investments in the economy of Turkey amounted to 355 million US dollars. The bulk of these investments regard the Star Oil Refinery of Azerbaijan. The works are financed by the State Oil Fund of Azerbaijan. --08D

Chamber of Accounts Recommends Package of Draft Budget Laws for Discussion in Parliament

Baku / 30.10.17 / Turan: At the meeting of the Board of the Accounting Chamber, the conclusions regarding the package of draft budget laws were discussed, the Chamber said.

They discussed the conclusions on the draft laws On the State Budget for 2018, On the Budget for 2018 of the Executive Body of Social Security and Social Protection, and On the Budget for 2018 of the Unemployment Insurance Fund.

Following the discussion, the Board of the Accounting Chamber decided to recommend to the Milli Majlis the discussion of a package of draft budget laws.

Discussions of the budget package in the parliament are planned for November. In the draft state budget, revenues are projected at the level of 20 billion 127 million manat, and expenses at the level of 20 billion 905 million 700 thousand manat. The export price of oil per barrel is set at $ 45. -71D-

Presidential Affairs Department Builds 20-storey Residential Building

Baku / 30.10.17 / Turan: The Presidential Affairs Department of Azerbaijan is building a 20-story building. The construction of the building was coordinated by the Baku City Executive Power on September 27 this year.

Under the construction of one-block building https://goo.gl/4fAjhF more than 5 hectares of land are allocated, and the building will be built on 748 square meters of the territory. The project of the building was developed by the company Continent Insaat. The number of apartments is not reported. The total area of ​​the building will be 10,475 square meters. The building is being built at the intersection of Gandja Avenue and I. Zulfugarov Street in Baku.

This is not the first residential building in Baku, which is being built by order of the Presidential Affairs Department of Azerbaijan. According to the register of building permits, in 2010 the Presidential Administration also received permission to build a five-block residential building (Hasan Bek Zardabi Avenue, 74A), consisting of 325 apartments. The total area of ​​the 16-20-storey building was about 30 thousand square meters. https://goo.gl/k5jNgK.

In the Presidential Affairs Department 67 people work, while in the Presidential Administration there are 473 people. It is unclear on what rights the employees of the Presidential Administration and the Presidential Affairs Department receive free apartments from the state.

The register of buildings is maintained by the State Committee for Urban Development and Architecture.

It has also become known recently that 5% of nine types of fines and tax sanctions have been received since May 2017 in the extra-budgetary account of the above-mentioned structures and the Special Medical Service of the President of Azerbaijan for their material encouragement. According to independent estimates, in 2018 this source will receive about 14 million manat to this fund. -----08B

Baku-Tbilisi-Kars Opening Ceremony Starts

Baku / 30.10.17 / Turan: The opening ceremony of the Baku-Tbilisi-Kars (BTK) railway started in the settlement of Alyat, 70 kilometers south-west of Baku.

The ceremony involves Azerbaijani President Ilham Aliyev, Turkish President Recep Tayyip Erdogan, Georgian Prime Minister Georgy Kvirikashvili, Prime Minister of Kazakhstan Bakintzhan Sagintayev, and Prime Minister of Uzbekistan Abdulla Aripov.

The Baku-Tbilisi-Kars railway project was implemented on the basis of the Azerbaijan-Georgia-Turkey interstate agreement signed in 2007. Within the framework of the project, a railway line was built from the Akhalkalaki station in Georgia to the railway station in Kars, Turkey, 105 km long, of which 76 km are Turkish, and 29 km are Georgian territory. A station for changing wheel pairs 1,435 mm / 1,520 mm was also built in Akhalkalaki. The Akhalkalaki-Tbilisi section, 183 km, in Georgia was also reconstructed. The total length of BTK is 826 km.

At the first stage, BTK will transport 1 million passengers and 6.5 million tons of cargo per year, and later the cargo traffic will reach 17 million tons and 2 million passengers per year.

The construction of the Georgian part was financed by Azerbaijan, which allocated two concessional loans to Georgia for a total of $ 775 million.

The maximum speed of trains along BTK will reach 120 km per hour. BTK is part of a more ambitious project for the new Great Silk Road connecting railways from Europe to China.

Under the program for the development of railways in Turkey, the underwater railway tunnel Marmaray was built under the Bosporus Strait in Istanbul. It provides direct communication with the pan-European railway network.

The opening of BTK will allow for direct rail transportation (without transshipment of goods from one mode of transport to another). This will become an alternative to transportation on the ocean and will reduce the time of goods in transit by more than two times - up to 12-15 days.

Also in the context of the project, it is planned to build a railway from Kars to the Nakhchivan Autonomous Republic. This will restore the railway communication of the autonomy with the rest of Azerbaijan, interrupted in the early 1990s due to the occupation of Azerbaijani territories by Armenia and the blockade of Nakhchivan by this state.

Armenia opposed BTK, proposing to use the existing branch connecting the railways of Turkey and Armenia, built back in the days of the USSR.

Now, after BTK is built, Armenia has begun to show interest in transport along this road. However, the project participants are unanimous in the belief that Armenia can gain access to BTK only after the liberation of the occupied territories of Azerbaijan. -06d-

Baku-Tbilisi-Kars Not to Replace Oil Revenues - Natig Jafarli

Baku / 30.10.17 / Turan: Azerbaijan as a financial sponsor of the Baku-Tbilisi-Kars (BTK) railway will receive additional political dividends from the project and increase its political weight, the economist Natig Jafarli said.

On his profile in the social network Facebook, the expert noted the positive nature of the project in terms of additional links with the West. According to him, this project will also be an additional factor in strengthening relations with Georgia, which is a window to Europe. The project will also serve to increase the turnover with Turkey.

Touching upon the profitability of the project, Jafarli noted it is not attractive to international financial institutions and because of this Azerbaijan became the main construction donor, providing Georgia with an interest-free loan of $ 1 billion for 20 years.

"At first, the annual revenues from the project will not exceed 20-30 million dollars. Despite the fact that the project will be important from the point of view of regional cargo transportation, the realization of international cargo transportation through our country will be more difficult. Attractiveness should be ensured by rapid transportation from Beijing to London, but there are two obstacles: cargo must be transported across the Caspian by ferry, during which there may be difficulties due to weather conditions, as well as the presence of different railroad gauge between post-Soviet and European countries," Jafarli considers.

In his opinion, in order to compete with the already existing route China-Kazakhstan-Russia-Europe, it is necessary to pursue a policy of cheaper tariffs, which in turn is problematic.

"BTK will not bring financial dividends for many years and the return of funds should be expected in 25-30 years. If the government hopes that this project will somehow replace oil revenues, it is mistaken then," Jafarli said. -71D-

Jalilabad District Hospital Terminates Contract Implemented Six Months Ago

Baku / 30.10.17 / Turan: The Jalilabad Central District Hospital terminated the results of the purchase "on other management costs" implemented in April this year. The reasons for the decision are not reported.

The District Hospital signed contracts with the company NFI for this purchase in the amount of 32,273 manat. The contractor does not provide information on the nature of the work and the fulfillment of the contractual obligations during the past six months.

LLC NFI was established in the Jalilabad district in September 2014. In 2015-2016 the company received seven contracts from the Central District Hospital for various supplies of goods and services (stationery, transportation services, printing equipment, etc.). The total amount of these contracts is 180,000 manat. The company does not appear in the procurement of other government agencies.

This year, the Jalilabad Central District Hospital commissioned the purchase of office supplies in the amount of 62.3 thousand manat from another local company - LLC Sey.A. -----08D--

VTB Bank Cut Its Debt to Central Bank by 8.7%

Baku / 30.10.17 / Turan: VTB Bank assets in the third quarter of 2017 increased by 12 million 026 thousand manat or 5% compared to the same period of the previous year, amounting to 249 million 316 thousand manat.

During the reporting period, the bank's liabilities increased by 12 million 411 thousand manat or 6.3% and reached 210 million 364 thousand manat.

In particular, customers" demand deposits increased from 6 million 582 thousand manat to 17 million 125 thousand manat, and their timed deposits increased from 47 million 196 thousand manats to 52 million 188 thousand manats. Loans from financial institutions grew from 65 million 999 thousand manat to 76 million 325 thousand manat.

At the same time, the debt of VTB Bank to the Central Bank of Azerbaijan decreased by 3 million 008 thousand manat or 8.7%, amounting to 31 million 360 thousand manat.

The bank"s capital for the specified time decreased by 386 thousand manat or 1% and is 38 million 950 thousand manat.

The bank completed three quarters of this year with a profit of 162 thousand manat. -71D-

Demand Exceeds Supply 3.7 Times at Deposit Auction

Baku / 30.10.17 / Turan: At the October 30 deposit auction of the Central Bank of Azerbaijan the demand amounted to 731 million manat, against the supply of 200 million manat. Thus, the demand exceeded the supply 3.7 times.

The funds were raised for a period of 14 days, at an average weighted rate of 10.01%.

Deposit auctions are held as part of anti-inflation measures. The Central Bank of Azerbaijan started holding deposit auctions in June 2016. -71D-

Bank Nikoil Plans to Increase Authorized Capital

Baku / 30.10.17 / Turan: At an extraordinary meeting of shareholders of Bank Nikoil on December 17 it is planned to discuss the issue of increasing the authorized capital, the bank said.

The meeting is also planned to discuss issues of changing the Charter of the bank and the composition of the Audit Committee.

The bank"s authorized capital is 184.5 million manat. The main shareholder is Topaz Investment (91.84%).

Individuals own 7.97% of the shares and another 0.19% belongs to ISR Holding. -71D-

Mugan Bank Increases Authorized Capital by AZN 10 Million

Baku / 30.10.17 / Turan: At a meeting of Mugan Bank"s shareholders on October 23 a decision was taken to increase the authorized capital, the bank said.

The authorized capital is increased by 13.3% or AZN 10 million and will amount to AZN 85 million. The bank"s capital will be increased through the issuance of new shares.

The shareholders of the bank established in 1992 are four individuals: the chairman of the Supervisory Board Elmir Macbeth Oglu Mehdiyev (63.5%), Macbeth Rahim Oglu Mehdiyev (13.1%), Vefa Ahmed Gizi Veliyeva (12.05%), and Farida Jahandar Gizi Mehdiyeva (11.35%). -71D-

Foreign currencies rates fixed by Central Bank

1 ABŞ dollarıUSD1.7002
1 AvroEUR1.9751
1 Avstraliya dollarıAUD1.3054
1 Argentina pesosuARS0.0966
1 Belarus rubluBYN0.8574
1 Braziliya rialıBRL0.5253
1 BƏƏ dirhəmiAED0.4629
1 Cənubi Afrika randıZAR0.1205
100 Cənubi Korea vonuKRW0.1513
1 Çexiya kronuCZK0.0771
100 Çili pesosuCLP0.2676
1 Çin yuanıCNY0.2559
1 Danimarka kronuDKK0.2654
1 Gürcü larisiGEL0.6636
1 Honq Konq dollarıHKD0.2179
1 Hindistan rupisiINR0.0262
1 İngilis funt sterlinqiGBP2.2355
100 İndoneziya rupiasıIDR0.0125
100 İran rialıIRR0.0045
1 İsveç kronuSEK0.2035
1 İsveçrə frankıCHF1.7047
1 İsrail şekeliILS0.4822
1 Kanada dollarıCAD1.3257
1 Küveyt dinarıKWD5.6261
1 Qazaxıstan tengəsiKZT0.0051
1 Qırğız somuKGS0.0248
100 Livan funtuLBP0.1127
1 Malayziya rinqqitiMYR0.4011
1 Meksika pesosuMXN0.0889
1 Moldova leyiMDL0.0984
1 Misir funtuEGP0.0964
1 Norveç kronuNOK0.2087
100 Özbək somuUZS0.0211
1 Polşa zlotasıPLN0.4652
1 Rusiya rubluRUB0.0293
1 Sinqapur dollarıSGD1.2453
1 Səudiyyə Ərəbistanı rialıSAR0.4534
1 SDR (BVF-nun xüsusi borcalma hüquqları)SDR2.3836
1 Türk lirəsiTRY0.4502
1 Tayvan dollarıTWD0.0563
1 Tacik somonisiTJS0.1932
1 Yeni türkmən manatıTMT0.4858
1 Ukrayna qrivnasıUAH0.0634
100 Yapon yeniJPY1.4966
1 Yeni Zelandiya dollarıNZD1.1638
QızılXAU2153.2183
GümüşXAG28.4443
PlatinXPT1559.0834
PalladiumXPD1652.5944