Two years later, Azerbaijan will experience a dire socio-economic situation, social turbulences may begin there, including revolts, and at that time, Azerbaijani President Ilham Aliyev will not be able to channel his people against the Armenian people and deviate their attention from social grievances by the factor of war.
Such an opinion was expressed by the economist Artak Manukyan in the interview with “Aravot”. He had done some economic calculations as to why it is beneficial for Azerbaijan to create such a tense situation on the border now and provoke a war. Note that recently Azerbaijan is displaying more aggressive behavior, the Azerbaijani army shells the border residential areas of Armenia and the NKR military units deployed kilometers far from the combat positions resulting in the death of civilians and soldiers. Azerbaijan, as reported by the Ministry of Defense, is the first time using 122-mm artillery since May 1994. Political scientists and military experts connect the Azerbaijani aggression by a variety of factors. The main reason for such behavior by Azerbaijan is the failure of the negotiation process.
Economist Artak Manukyan noted that Azerbaijan, especially in the period when the oil prices dropped, runs a more aggressive rhetoric. Now, Aliyev succeeded to some extent “swallow” his people, allegedly they are stronger and can war, now the country’s socio-economic tensed situation, so to speak, is not seen. Manukyan said that Azerbaijan has just begun to cut off budget expenditures, quite a big cuts, if next year, the oil prices remain at the same level, i.e. 40-60 dollars per barrel, and it is obvious, then, in this case, the life in Azerbaijan will significantly deteriorate. “While the number of Azerbaijanis unhappy with life and discontent with the socio-economic situation will grow. And this is the main reason that Aliyev will not be able to channel his people to war. Both, dire economic and political situation will be going on here.”
Manukyan presented the economic situation in Azerbaijan, which is associated by oil prices. “Compare with last year, the revenues from oil have been decreased by 30 percent, just 4.05 billion instead of 6.5 billion AZN in the first half of the year. Currently, Azerbaijan is in the leading position in the world by the reduction. It ranks the second by the pace of reductions in Eastern Europe and the CIS territory. In particular, in 2015, the Azerbaijani reserves fell by 1.2 billion dollars. The State Oil Fund and the Central Bank reserves are dropped by 7.8 billion dollars or by 15%. As a result, in 2015, the reserves per capita were down by 850 dollars. The most remarkable is that such trends intimidate Azerbaijan to turn into a steady trend, as with regard to oil prices, a 40-60 dollar level is expected in the next 2-3 years. And there is no factor that the oil prices in the years to come will return to the former 80-100 dollars per barrel. Incidentally, in recent years, in 2015, a budget deficit is expected to Azerbaijan for the first time.”
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According to the economist, in other words, in the coming years, Azerbaijan will not have any opportunity or economic grounds to wage a war, hence, now, as long as the situation more or less is not bad, it goes for such aggressive and war provocative moves. The economist said that if the war is imposed, then the experts decide our further steps of whether to give a punitive answer or not, but by and large, the war is not beneficial to any country. “If we try to maintain the current status quo for 2-3 years diplomatically, it is beneficial to us because, again, I repeat, a big internal tension will be going on in Azerbaijan since 2017, they are going to have serious problems.” And if until now, Aliyev continues his, the so-called, election delusion, allegedly they are strong with oil and tries to convince his people allegedly he will return the Karabakh, in the near future, he will not be able to mention the factor of oil even for this statement, moreover, in the presence of economic decline and major social problems, plus, the upcoming presidential elections in this country in 2018, then hardly Aliyev will go for a war at that time.
It is not that Armenia’s economy will immediately rise while Azerbaijan’s will fall, but as noted by the economist, again associated with the decline in oil prices, the decline in Azerbaijan will be more rapidly, while the paces for deterioration of our economy are lower. Incidentally, the likelihood is great that Azerbaijan would start extracting less oil because its cost is higher and the sale is not so profitable. The economist said that we should use the time to our advantage. “We need to create a prosperous economy and provide prosperous life for people.” Manukyan made his own suggestion to develop Armenia’s economy in more efficient manner. Studying the statistics, he has come to the conclusion that initially the oil factor has a lower significance for Azerbaijan than the molybdenum for Armenia.
According to Manukyan, the price per ton of molybdenum, even in the event of this price decline, is about 12,500 dollars, Armenia has the 7.5% of the world’s proven reserves of molybdenum while Azerbaijan has the 2% of the world’s proven oil reserves. “Azerbaijan’s observation saying that it is powerful with “oil-dollars” is weaker than if Armenia tries to become the so-called “molybdenum-dollar” country. Our country has the opportunity to become so. We can have faster and more efficient development with molybdenum that Azerbaijan with its oil, even if the oil prices were not down. We are in a better position with molybdenum than Azerbaijan with its oil, one ton of molybdenum is much more valuable than oil, although it is in barrels, in other words, molybdenum is more valuable mine.”
To our question that we are exporting molybdenum concentrate and the generated taxes, certainly, brings money to our royalties, our budget, but whether it suffices to compete with oil, Manukyan said, “We need to use our “playing card” more precisely and prospectively. We must try exporting the molybdenum not as a raw material, but as a production. Molybdenum is used in military industry and not only. If the 7.5% of the world’s reserves is in Armenia, this is an opportunity to bring in investors to our country, to create conditions for local production, rather than exporting the raw material. Eventually, creating a production bring greater benefit to the economy than just exporting the raw materials. Just a fundamental project and conditions are necessary to create for the investors.”
Nelly BABAYAN,
“Aravot” daily
