BBC Monitoring Service, Day.az,
3, January 2008

A well-known Azerbaijani economic expert has said that the year of 2007 may be characterized as stable despite the dramatic rise in the rate of inflation and the country's growing dependence on oil revenues. Ilham Saban, director of the Centre of Oil Research, told an exclusive interview with Baku-based news portal Day.az that he predicted the same stability this year as well "if officials do not fail the president". The following is an excerpt from the interview on Azerbaijani website Day.az on 3 January headlined "Ilham Saban: The population spends the majority of its income on foodstuffs. In other words, the income is eaten away"; subheadings have been inserted editorially:

The year 2007 started for Azerbaijani citizens with shocking news from the government. Prices for petroleum rose by 50 per cent and for electricity by 300 per cent. Then, many predicted a dim picture of life in the country, but eventually we ended the year not only with fireworks, but also in a national disco [laser show and disco on Baku's central square on 31 December 2007].

Day.az decided to talk about this and other non-oil related issues with the head of the Centre of Oil Research, Ilham Saban.

Stable year

[Interviewer] How was the outgoing year for the Azerbaijani economy?

[Saban] The year was satisfactory for the government as a whole: oil wells worked round the clock, pipelines ensured safe oil supplies, revenues from rising oil prices in the international markets significantly superseded the predictions and as a result "the top" spent as they wished, while "the bottom" admired (only few people were outraged at) the volume of spending. This tendency will be preserved in the Azerbaijani economy this year.

In a nutshell, the overwhelming part of society managed to get adapted to the realities of life without any problems despite the constantly rising volume of the consumer basket and quite a high level of inflation as compared to the previous years.

In other words people searched for possible ways of bypassing the tax payments specified in the law (by the way, I think that representatives of show business have beaten an unprecedented record in the world: ordinary singers paid a monthly tax of four manats [about 5 dollars], while elite singers who make more than 5,000 manats in a party paid 37 manats [about 40 dollars]).

Social contributions have been observed to reduce (despite the declared generation of several thousands of permanent jobs there has not been an adequate increase in the collection of these contributions and it would never be possible to pay pensions in a timely manner but for the transfers from the state budget, which is being fed from the Oil Fund more and more) and real incomes concealed (especially civil servants quite formally declare their incomes. If we believe in what they say, it turns out that it is possible to use several primary class cars, build a country house at half a million [dollars] and have lunch at a restaurant every day, spending at least 30-40 manats, on a salary of about 1,000 manats [about 1,120 dollars] in contemporary Azerbaijan).

As a result of the abovementioned tendencies and unlike the expectations of members of the classic opposition in the country the predicted ferments and public unrest did not happen and the authorities managed to categorize the outgoing year as "stable". I would like to note that there is every chance to rank the current year [2008] under the category "stable+" if officials do not fail the president (in reality, "the one window" system will work, the existing disgraceful methods in the allocation of foreign passports will be eliminated, order will be restored in the consumption, construction and financial markets etc.).