Page 20 - FSUOGM Week 32

FSUOGM POLICY FSUOGM

Azeri president slams SOCAR for wastefulness

AZERBAIJAN PRESIDENT Ilham Aliyev has criticised oil and crises: the coronavirus-driven economic down-
gas giant Socar and other state-owned compa- turn and the massive international slump in
The Azeri leader also nies as wasteful in a speech nodding to Azerbai- oil and gas prices. Oil and gas sales account for
called for a mass jan’s unfolding economic crisis and calling for a roughly two-thirds of budget revenues, accord-
privatisaton drive amid mass privatisation drive. ing to Fitch Ratings; earlier this month the
the country's unfolding In unprecedented condemnation of a sys- government was forced to redraft its budget to
economic crisis. tem he has overseen as president for almost 17 reflect oil prices of $35 per barrel, down from
years, Aliyev slammed Socar for tapping the state $55. GDP shrank by 2.7% in the first six months
budget rather than its own revenues to imple- of 2020, the president said. His finance minister
ment projects. said a day earlier that output could fall up to 5%
Aliyev was addressing an August 6 govern- this year.
ment session adjourned to discuss the corona- The president’s criticism of state-owned com-
virus (COVID-19) and the economic situation. panies was later echoed by opposition MP Razi
“Even extending gas lines to homes is Nurullayev, who condemned Socar and AZAL
financed from the state budget in our country. during a parliamentary session on August 7.
However, this is a direct responsibility of the Nurullayev slammed Socar for failing to pro-
State Oil Company [Socar]. This year, we have vide gas to villages in Imishli region, which has
envisaged 100 million manats [$58.8mn] in the fomented protests with locals blocking roads, he
state budget for [gas lines to be extended to] vil- said. “Was it too hard to schedule installation of
lages. If the state does all this, then what is the gas lines in a few villages?” he asked, adding that
state company doing? After all, this is its job and Socar “has the duty to spend the money from oil
its duty,” he said. income for the people’s welfare.”
Furthermore, Aliyev said that Socar is given Nurullayev also criticized AZAL for inflated
money “not only to supply gas but also for drill- ticket prices. Addressing AZAL’s president,
ing operations, for financing its share in consor- Nurullayev said, “You have built a business using
tia with foreign partners and to implement other the state budget and managing the state compa-
infrastructure projects. Where does this money nies as your own firm. This is disgraceful. State
come from? From the state budget! In fact, these companies are standing in a line to loot the gov-
are large funds.” ernment’s budget. You must make money and
Prior to taking over from his father as presi- pay back your loans. On top of that, you must
dent in 2003, Aliyev was vice president of Socar pay taxes.”
for almost 10 years. Gubad Ibadoglu, an Azerbaijani economist
He also namechecked other state-owned at Rutgers University, linked Aliyev’s criticism
companies – electricity producer AzerEnergy, of state-owned companies to the economic
the Caspian Shipping Company, Azerbaijan downturn: The president “is concerned that
Railways and flag carrier Azerbaijan Airlines, or these companies might go bankrupt and their
AZAL – for using funds from the state budget. debt will have to be covered by the state budget,”
“All AZAL aircraft have been purchased by Ibadoglu said in an interview with exiled media
the state. All the airports have been built through outlet Azad Soz.
the state. But what profit does the government Ibadoglu added that Socar is far less efficient
make? Airplanes are purchased and operated. than a corporation and that if no serious struc-
But where is the income? When will that be paid? tural changes occur within the company, it will
Are we supposed to repay the borrowed loans?” be bankrupt by 2023. “It’s not difficult to predict
Aliyev thundered. that Socar will go bankrupt. One can come to
Aliyev said that private companies operate such a conclusion by analysing Socar’s obliga-
based on market principles, while state-owned tions and its short-term and long-term debts. I
companies operate according to a “socialist eco- think timely measures should have been taken to
nomic model” and “drag down” the economy. prevent Socar [and] AZAL’s bankruptcy.”
“I’m instructing you: The activities of Baku-based activist Anar Mammadli said
state-owned companies should be vigorously that the president’s concerns about the budget
inspected, and a new management system and privatisation are years too late. “Publicly
should be built. This cannot continue any longer. acknowledging the problems that are known to
Such a lack of control can no longer continue.” everyone, including himself, is not the way out.
Aliyev urged his cabinet to invite foreign and We need reforms, not a confession,” Mammadli
local investors to participate in privatisations. wrote on Facebook.
The next day, he signed a decree to set up a “Where was the country’s president looking
holding company to bring all state-owned com- all these years? Why did he keep those people
panies under one umbrella. in power,” activist Bakhtiyar Hajiyev asked on
Aliyev’s criticism of the state-owned com- Facebook of the state-run companies’ manage-
panies comes as Baku is facing twin economic ment. ™

P20 www. NEWSBASE .com Week 32 12•August•2020