Azerbaijan - Asian Business News and Tenders
Azerbaijan: Unemployment Rises as Economy Teeters
March 9, 2016
The decrease in Manat exchange rates and industrial goods pricing are shaking Azerbaijan's economy and increasing unemployment.
Imishli is the only Azerbaijani region this year that did not require government subsidies to meet its expenses. Even so, it has not escaped the collateral damage inflicted by the economic crash.
According to the regional government, 45 percent of the region’s revenue is generated by one sugar factory, part of a conglomerate that also produces limestone, plant oil and fodder. The factory, the Azerbaijan Sugar Production Association, is owned by Azersun Holding, a business operation that a report published by the International Consortium of Investigative Journalists indicated had connections to family members of President Ilham Aliyev. The president himself opened the 850-employee facility in 2006.
In December, management cut nearly 200 jobs, according to Azersun Holding spokesperson Afig Safarov, adding that those affected were sub-contractors. One laid-off worker told EurasiaNet.org the job market in the region is bleak. “Now, wherever I go for a job, I’m told to wait… Unemployment was always a big problem here, but now it’s worse,” he said.
Even some of those who have a job complain that wages are not sufficient to keep pace with the rising cost of living. One state-sector worker in Imishli said he is unable to make ends meet on his monthly salary of 180 manats (about $115). “One should get at least $1,000 [per month] in order to be able to live in Azerbaijan. We have so many expenses,” he said. “Let’s give $115 [per month] to a minister and see how he can survive on that.”
Official data does not seem to take the sugar factory layoffs into account. As of January 2016, the latest date for which information was available, only 47 individuals were registered as unemployed in Imishli.
Until recently, profits from Azerbaijan’s abundant energy exports helped keep the issue of unemployment off the public’s radar, noted Parviz Heydarov, an economic expert at Baku’s Scientific Research Institute of Economic Reforms. Starting in 2004, Azerbaijan spent more than 50 billion manats (about $33 billion) to spur economic development in its regions. Those initiatives have had mixed results. And now, the government is not in position to spend as it once did, given that Brent crude, the international benchmark, has slipped under $33 per barrel, roughly 70 percent off its average two years ago.
Protests over the manat’s devaluation and rising unemployment have occurred throughout Azerbaijan in January.
In Ganja, the country’s second-largest city with a population of 313,200, a job fair turned into a protest on February 5 when applicants grew agitated that they would not receive job offers for one of the 750 positions reportedly available. Police stamped out the impromptu demonstration and the job fair was canceled.
To keep a lid on popular frustrations, the government is mulling fresh initiatives aimed at the agricultural sector, which employs roughly 37 percent of working-age Azerbaijanis. Azerbaijani officials are engaging Ukraine, China and Japan, among others, in discussions about various forms of agricultural cooperation.
In Imishli, an agriculturally oriented region, the government recently opened a “milk-collection facility,” co-financed with the US government, which could provide jobs for upwards of 1,200 people, Trend news agency reported. The regional government also plans to open a dairy farm that will produce cheese for export, a 20-million-euro ($21.9 million) project, News.az reported.
Even the sugar factory supposedly has expansion plans. Azersun Holding spokesperson Safarov maintains that the plant’s production rate of 1,000 tons per day will not drop, and that experts are looking for new projects to rehire those recently laid off, he said.
Originally published by EurasiaNet.org, http://www.eurasianet.org
Copyright: EurasiaNet.org, © 2015 The Open Society Institute