The budget per capita of Azerbaijan and its effect on the political weight and government weight of this country

Note: the budget per capita index is different from the budget per capita. The budget per capita is between 1 and 100, but the budget per capita is calculated in dollars.

International Institute of Khazar Studies (IIKSS) – As indicated in the following graphs, the budget of the Azerbaijan Republic, after significant growth in 2007, which was caused by the sale of oil through the Baku-Tbilisi-Jeyhan pipeline, reached its maximum size and potential. Naturally, one can see the impact of this growth on the situation and livelihoods, work, welfare, social security, services, infrastructures and all financial and non-financial sectors of this Republic. But it should be noted that the Azerbaijan’s budget per capita and its size are also highly fluctuating due to dependence of the Azerbaijan’s budget on oil. Considering the Azerbaijan’s budget per capita in recent years, we observe a very sharp fluctuation in budget of this Republic in 2009, which, naturally, had a significant impact on its budget per capita.

The Republic had successful to increase the budget per capita from 100 $ per person in 1997 to 2,800 $ per person in 2008. At that time, the inactive population of this republic was 53% of the total population. Suddenly, with the advent of the 2008 crisis, the budget per capita in this republic fell from 2,800 $ in 2008 to 2,000 $ in 2009. But then, with economic reforms there was a significant growth in these indices. This figure in 2010 had increased to the level of 2008, and we see in this year a budget per capita of 2700 dollars and a budget per capita of 3200 dollars in 2011, which is unparalleled in Azerbaijan. But, contrary to expectations, these dream days for the Azerbaijani economy did not last, and this number remained at $ 3,100 for nearly three years.

Though this figure was considered as a good record for Azerbaijan, it was seriously far from the best situation in the world in those years. In other words, Azerbaijan's budget per capita in 2014 was far from the best indices in the world by 16.5 times, in 2013 – by 16 times and in 2013 and 2012 - almost by 15.5 times. It means that after 2009, one of the most ideal budget per capita in the world fell every year, and only in 2013 could reach an index of 6,5 of 100 and could have the shortest distance from the best index in the world.

Thus, according to the existing figures, it can be said that budget and budget per capita of Azerbaijan are in a critical situation. Because since 2014, with the fall of oil prices, budget and budget per capita of Azerbaijan have decreased each year, and in 2016, this figure has surprisingly to 1100 dollar per person. More precisely, with regard to the decrease in Azerbaijan's budget, it can be assumed that with what catastrophic situation this republic will face in the sphere of the state economy. Even these tensions have also affected gross domestic product (GDP) of this republic. Because the graphs show that GDP per capita has fallen from $ 8,000 in 2014 to $ 3,800 in 2016, which is roughly equal to its size in 2006. Therefore, it can be claimed that oil and its fluctuations have led to the fact that Azerbaijan in terms of its financial resources, return to 10 years ago and perhaps it can be said that If Azerbaijan did not have oil, this country would have to say goodbye to many modern world facilities.

Considering the following graphs showing budget per capita and per capita GDP, we will see that for every 1,000 dollars that Azerbaijan has spent for each of its population in 2016, this republic has achieved about $ 3850 of GDP. This figure for every 2150 dollars in 2015 was 5900 dollars and for every 3000 dollars in 2014 - 8000 dollars. As indicated in the diagram below, this ratio has decreased every year. Although a significant part of Azerbaijan's economy is state-owned and although this ratio has little reflection in the private sector of Azerbaijan's economy and cannot be a complete criterion for assessing the market situation in Azerbaijan, but it can clarify the economic outlook of this republic.

Author: Maysam Araee Daronkola - Member of the faculty of the University Payame Noor and director of the International Institute of Khazar Sea Studies (IIKSS), PhD of public international law
Translator: Mohsen Hamidi - expert on Central Asia and Caucasus, translator of Russian language and member of the Scientific Council of the International Institute of Khazar Sea Studies (IIKSS)