The Caucasus press review (November 11-17)

The Georgian parliament is discussing the 2014 budget. The Georgian Times says that the budget has provoked intensive debates because the parliamentary minority insists that the budget is not socially-oriented enough. The majority, on the contrary, believes that the document is focused on social projects.

Meanwhile, the paper says, the country has problems with fulfilling the current budget, the deficit of which totals $300 million. Economic expert Paata Sheshelidze draws attention to the economic activeness and obstacles in the way of improving tax efficiency and budget fulfillment. Unfortunately, he said, the economic activeness dropped this year and the indictor of economic growth did not exceed 1.3%. The expert proposes compensation of the budget deficit via private business, similar to the way it was done during realization of the project on land cultivation. A private fund granted $200 million for the project and $700 million more for the program of cheap agricultural loans.

Expert Levan Klandadze believes that the existing problems around the budget originate from the 2013 budget. The government made a set of mistakes while planning it and set wrong priorities. Besides, when planning this year’s budget, the governmental totally changed the budget policy and moved left, overloading its social obligations. Forecasts of tax collection and the GDP were made in a very optimistic fashion. As a result, the government had to carry out a inadequate and inefficient budget policy. The authorities neglected the mistakes made when planning and realizing the budget. In particular, no growth of tax income was planned. The VAT section was even expected to drop. This means that 2014 is expected to see a drop in business activeness. The government has plans to see an optimistic economic growth rate of 5% and social expenses. In order to cover the deficit, the government will need to find new loans to cover about 400 million lari ($239 million) of internal debt and 730 million lari ($435 million) of external debt. Such policy may trigger a budget crisis, which poor management may turn into an economic crisis.

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Armenia’s Novoye Vremya reports that oppositionist parliamentary fractions Dashnaktsutyun, Armenian National Congress, Prosperous Armenia Party and the Heritage Party proposed an unscheduled session of the National Assembly to discuss coming of the new pension law into force.

Oppositionists say that the law on the cumulative pension system coming into force on January 1 will be a hard blow on residents. 5% deductions will start at the start of the year, while raise of salaries is only planned for July 2014. Overall, those born after 1974 (they are the ones affected by obligatory accumulative system) will have major losses. In this case, MPs demand postponement of the law by a year or at least until July.

However, according to the Voice of Armenia paper, the unscheduled session initiated by the four parties failed to start because no quorum was achieved. The parliamentary majority did not keep its promise to abstain from boycotting the session. The RPA sent an official letter to Speaker Ovik Abramyan, noting that participating in the session was unnecessary and the party was boycotting it. According to Saakyan, this reluctance to discuss the law again was the reason for the boycott.

So does it mean that the opposition will never get a chance to initiate an unscheduled session? Vice Speaker Eduard Sharmazanov, referring to article 66 of the Constitution, said that MPs were not limited by the imperative mandate and were acting according to their conscience and convictions. He also noted that, pointing out to the parliament’s regulations, that a fraction has the right for political statements and that a political boycott was a form of political competition.

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The Nedelya paper of Baku reports that the problem of reduction of labor migrants of Azerbaijan in Russia and Turkey was under constant attention of the republic’s authorities. The issue became more topical because many Azerbaijanis earning crust in Russia had to return.

The paper informs that many MPs, while discussing the 2014 budget, noted labor migration from the country, provoked by unemployment and causing a lack of qualified staff, was one of the problems for the development of the republic. They said that new jobs should open to employ everyone in Azerbaijan and make migration needless.

But how is this achievable? Especially when the 2014 budget, according to Azerbaijani Minister for Finances, Samir Sharifov, is not very optimistic. Budget income in 2014 is forecast at 18.384 billion manats (1 manat = $1.28), expenses at 20.063 billion manats, i.e. the budget deficit will total 1.679 billion manats, or 20.87% of the GDP. If the republic does not keep the budget without a deficit next year, how will new jobs be opened in a few years? Especially when oil extraction in the country is dropping…

On the other hand, the government has its own solution to the complicated problem. Deputy Minister for Economy and Industry Sevindzh Gasanova said at the plenary session of the parliament that the main goal was a diversification of the economy and the development of the non-petroleum sector. Accomplishment of the goal needs macroeconomic stability, improvement of business climate, formation of quality staff potential. The state program for education of young people abroad helps the process.

Gasanova noted successful development of export-oriented economy. Azerbaijan was exporting 1218 types of products in 2003-2012 and reached 2273 types in 2013. Industrial exports increased 4.8-fold, agricultural 9.4-fold. Exports of alcohol, pharmaceutics and vegetable fats grows. Meat imports dropped in 2012 by 30%, compared with 2011, dairy products by 20%, flour by 89%.

Ziyad Samedzadeh, head of the parliamentary committee for economic policy, noted that Azerbaijan was reducing dependence on oil income every year. In 2014, the non-petroleum share of the GDP will total 63%, reaching 72.4% by 2017. The non-petroleum field is being developed to become the main source of income.

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The Sovetskaya Adygeya paper reports about employment in Adygeya to reduce tensions at the regional labour market. The republic is realizing two programs financed by the federal and local budgets. One of them is a long-term purpose program called ‘Encouragement of population employment in the Adygeya Republic in 2011-2013’ worth about 140 million rubles to pay benefits, scholarships and pensions. The other one is the annual program of additional measures taken to boost employment at the labour market.

Besides support granted to the jobless, the employment services trains staff of enterprises with high risk of redundancies. 190 people have been trained since the start of the year and not a single one of them has lost the job. According to analysis, the highest demand is for weldors, operators of compressions machines, drivers, electricians, escalator operators., cheese-makers. The Adygeya cheese is a local brand, the demand for which grows every year.

Tensions on the labor market of the republic are also reduced by practical training of graduates of education centers realized for already 4 years. Employers are reluctant to employ specialists with degrees without work experience. Deals to train 83 young specialists into accountants, managers, engineers and lawyers have been signed for 3,375,600 rubles this year.

Another trend is self-employment, when an unemployed resident decided to open business. Such person would undergo training, form a business plan and register a company. The government would grant a startup capital of 58,800 rubles. 190 people have used this opportunity this year.

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The Vesti Respubliki paper of Grozny says that Chechnya launched the Fund for Capital Reconstruction of Multi-Storey Houses. Minister for Housing and Utilities Aslambek Aydamirov noted that the fund will collect information on multi-storey houses in the republic, form regional programs for reconstruction and plans for its realization, keep registry of money at the fund in the form of donations for reconstruction granted by owners of rooms in multi-storey houses. The regional fund is expected to become the center for consultations, information and organizing assistance for individuals and organizations planning renovations of multi-storey buildings.

The law on the regional system of housing reconstruction came into force on September 2, 2013. The authorities are forming a database of all multi-storey houses. There are about 5,300 such buildings in total. Data on their condition and needs for renovation will be collected by municipal executives and sent to a common database. The data will become the basis for regional programs of capital reconstruction. The minister believes that the formation of the regional fund will allow the establishment of a system uniting all municipalities to organize reconstruction of multi-storey houses and the financing of the process.