Azerbaijani policy of reducing the exchange rate is more successful than the Russian one

Yesterday, the Public Chamber of the RF held a round table ‘Russia and Azerbaijan in the Economic Crisis. Ways Out and New Trends in the Economies of the Two Countries.’ Russian and Azerbaijani economic and political experts, representatives of the authorities, and young activists participated in it.

Sergey Markov, political scientist, First Deputy Chairman of the Public Chamber of the Russian Federation on the development of public diplomacy and support for compatriots abroad, Director of the Institute of Political Studies, says that “Russia and Azerbaijan have been friends for decades; they are now developing their relationship. The position of the leaders of the countries, presidents Putin and Aliyev, and above all, their historic meeting on the eve of the presidential elections in Azerbaijan, where Putin supported Ilham Aliyev to be elected to this post very strongly and firmly, was very important for the relations. Support for President Aliyev [in Azerbaijan] is very high, but the problem is that our western colleagues are trying all the time to attack the legitimacy of the election process.”

According to Markov, Moscow and Baku are in a similar situation in the economic field, because of the drop in oil prices, due to the fact that we have dependence of the budget on oil prices. And the political response is alike – above all, it is a policy of managed depreciation of the national currency. In fact, it is a very competent and precise policy that simultaneously allows you to balance the budget, and at the same time allows you to create more competitive domestic production. Currency wars are unfolding in the world.”

Markov thinks that the Azerbaijani policy of reducing the exchange rate seems to be more successful than the Russian one: “The Russian one is too volatile, it is too spontaneous. At the same time, the falls in the Azerbaijani currency are based on guided solutions.”

Meanwhile, the political scientist says that in previous years Moscow and Baku have paid insufficient attention to the cooperation in terms of bilateral trade, trade flows. “We thought that because of the huge budgets, it went by itself, and we let it go on its own way. This was not quite correct. And the changed economic situation, which makes the impact of oil and gas less significant, encourages us to ensure that major changes have been made here. However, to be honest, I don't really see any big decisions in this direction,” Markov states.

At the same time, he thinks that Azerbaijan has a great agricultural complex, in which considerable resources are invested: “There are very healthy products, without chemicals. There is a huge number of people in Russia, whose fate is connected with Azerbaijan, who are able to provide very high demand for Azerbaijani agricultural products. But it's necessary to create distribution channels. It is difficult to break onto the shelves of the retail systems, but small and medium-sized business will always be under such circumstances. There is a need to create large commercial brands, perhaps they should be regional in nature, and under these big commercial brands to break through to the Russian retail market. I think that the political support for such a trade policy would be very large, because our political leadership considers Azerbaijan as a friendly country, with which it is necessary and possible to develop such commercial and economic relations.”

Markov urges Azerbaijani businessmen to think about a share of the products which are purchased in other countries, including engineering products, to buy in Russia. “However, it requires more precise understanding of the nomenclature. The Russian machine-building enterprises are not very aware of what exactly is purchased by Azerbaijan and in which parameters it can be purchased. The Azerbaijani side, primarily the Diaspora, could make some analyses of the situation and come up with a proposal that will receive a greater political support.”