Economist Mesrop Arakelyan predicts that this year also Azerbaijan will resort to adventure and possibly would provoke a war again. The economist has come to such a conclusion after studying Azerbaijan’s state budget for 2017. As presented by Mesrop Arakelyan, Azerbaijan’s economy will worsen in the next two years for its budget has been reduced almost 2.5 times by getting to USD 9 billion from USD 23 billion. Mr. Arakelyan observed that Azerbaijan’s international reserves are reduced by more than 10 billion dollars, the national currency – manat – is constantly devalued, the financial system is collapsing. There is a serious social discontent. “As a result, in the near future we will again witness a military adventure which will enable to divert its social discontent with a new war,” says Mr. Arakelyan.
In an interview with “Aravot”, the economist detailed, “More than 50 percent of the Azerbaijan’s budget revenues are generated from the sale of oil. Until the 2014 year-end, the oil prices were pretty high – around 120 dollars, and in the meantime, Azerbaijan’s state budget amounted to about 25 billion which is about 10 times more than Armenia’s state budget, however, the sharp decrease in oil prices since 2015 caused problems to the entire economy of Azerbaijan, in particular, the significant drop in revenues led to the fact that Azerbaijan is already predicting its budget revenues for 2017 around 9 billion, in other words, 2.5 times less. Whereas such drop causes significant problems for the whole economy, particularly, major problems in the whole budget expenditures.”
As mentioned by Mr. Arakelyan, because of the oil devaluation, the problems facing Azerbaijan two years ago extend in a chain over the whole economy, over the financial system which also causes drastic devaluation of the national currency – the Azerbaijani manat, “If until then one dollar was around one manat, now the cost of one dollar exceeds 1.8 manat.”
As for the Azerbaijan’s military expenditures which was quite huge in recent years and reached almost the level of the entire state budget of Armenia, then according to the economist, Azerbaijan with its current budget cannot afford in a long-run such military expenditures as it was having earlier, “Therefore, given these prospects as well as the serious problems in the economy and the discontents in the society as the devaluation causes inflation, problems occur in the financial system, many banks are already closed and in addition, the financial and economic interests of the West and Russia over Azerbaijan will gradually fall. In the next one-two years Azerbaijan will try to reach the maximum on the Karabakh conflict settlement, first of all, trying to get the maximum peacefully and in the meantime, why not, will also exert some military operations to divert the public from the social problems like it happened last year in April.”
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Analyzing the state budget of the neighboring country, Mesrop Arakelyan shows that the budget revenues have sharply reduced causing reduction of certain expenditures in state sectors, in addition, the poverty threshold has grown and will keep growing. The national currency devaluation resulted in the rise in prices for imported goods. According to our interlocutor, there are already problems in the financial market, and some banks are unable to pay the maintenance of deposits of citizens. Incidentally, the transfers are also reduced in Azerbaijan, not so much as in Armenia but this problem has caused its effect on the social situation of the citizens of this country.
To the question of “Aravot” of whether Azerbaijan can afford to wage a war in the event of budget reduction given the fact that the war requires huge resources, and also the fact that in the war in April, Azerbaijan had great financial losses in terms of military equipment, Mr. Arakelyan replied that the military expenditures of recent years allowed Azerbaijan to accumulate such a level of military equipment that Azerbaijan has sufficient resources to organize a short-term and local war as it had not fully used the equipment accumulated over the years.
