Azerbaijan’s 2024 budget is 3.5 times higher than Armenia’s, its military budget is 2.1 times higher, and its social expenses are 1.5 times higher; The state budget of Azerbaijan is 2.1 times higher than the main financial document of Georgia and 7.2 times higher than the military budget
In the last 20 years, Azerbaijan, which has experienced rapid development that no country in the world has been able to achieve, is progressing comprehensively against the background of the realities created by economic independence. Since 2003, the gross domestic product has increased by four times, state budget revenues by more than 30 times, and foreign trade turnover by more than ten times, and the investment of 300 billion US dollars in our country confirms this.
Our country, which is completely self-sufficient from the economic point of view and has no serious financial difficulties, is already successfully completing the year 2023. Sustainability of socio-economic development was ensured as a result of purposeful reforms implemented during the year. The significant improvement of all main indicators characterizing the level of development proves that Azerbaijan has become a country with the strongest economic potential in the region.
After the glorious victory in the second Karabakh war, the successes achieved thanks to the multifaceted reforms and comprehensive measures implemented in accordance with the new development strategy of President Ilham Aliyev indicate that the economy of Azerbaijan will maintain its development dynamics in 2024 and the positive trends of economic growth will continue.
2003-2023: 20 years of great achievements, record indicators
The implementation of the five National Priorities authored by President Ilham Aliyev, who ensures the economic independence of Azerbaijan by perfectly realizing the economic development strategy defined by the Great Leader Heydar Aliyev, creates a favorable ground for achieving great success every year.
If we look at the progress of Azerbaijan from 2003 to today, we will clearly witness great successes. Back in 2003, when the next year’s state budget was being discussed, its revenues were approved in the amount of 7,518,400 million manats, and its expenses in the amount of 7,833,400 million manats. The currency reserves of our country were only 1.8 million dollars.
Today, when we look at economic indicators, we are witnessing record indicators.
As President Ilham Aliyev said in his speech at the Summit of the UN Special Program for the Economies of Central Asian Countries on November 24, over the past 20 years, the gross domestic product has increased by 4 times, the state budget revenues by more than 30 times, and the foreign trade turnover by 10 times. has increased a lot. Azerbaijan’s direct foreign debt is currently about 10 percent of GDP. Our foreign exchange reserves exceed our direct foreign debt by 10 times. In the last 20 years, 310 billion dollars have been invested in the country’s economy. 200 billion dollars of them were invested in the non-energy sector. One of the great challenges we faced at the beginning of our independence was poverty. Although 20 years ago, the number of people living in poverty was close to 50 percent, now this indicator is 5.5 percent. For the past 20 years, the economy of Azerbaijan has been among the rapidly developing countries. In 2022-2023, our strategic currency reserves increased by 14.5 percent and reached 67 billion dollars.
In these years, the annual social protection expenses of the state budget are more than 20 times, the minimum wage is 38 times, the average monthly wage is 12 times, the minimum pension is 14 times, the average monthly pension is 18 times, the average monthly pension by age is 19 times, the pension is 14 times by the head of the family. pension due to loss has increased 19 times. The annual funds paid for pension increased 30 times and reached 6 billion manats, the ratio of the net minimum wage to the net average wage increased from 12 percent in 2003 to 41 percent. The average amount of targeted assistance has increased 11 times.
In the past 5 years, 4 social reform packages covering 4 million citizens have been implemented. During this period, the pension of the families of martyrs and war disabled persons was increased 6 times, one-time payments were given to the families of martyred servicemen and war disabled persons.
In 2003, the military budget of Azerbaijan was 115 million manats. In 2023, 5.3 billion manats have been allocated for the country’s defense and national security expenses. In the state budget of 2024, the amount of funds allocated for defense and security expenses is more than 6 billion, 421 million manats.
Thus, the achieved achievements indicate that in the last 20 years, Azerbaijan has been able to achieve successes that many countries have not been able to achieve for many years. All this, of course, was achieved due to President Ilham Aliyev’s completely independent policy, socio-economic reforms and global scale projects. The record indicators suggest that Azerbaijan, which is able to overcome any economic crisis, will achieve greater achievements in the coming years.
Armenia has the smallest budget in the region
Azerbaijan continuously increases its political, socio-economic power and strengthens its positions. There is no doubt that Azerbaijan will become the author of new achievements during the next year. At the same time, the steps taken give reason to say that Azerbaijan will further strengthen its status as a leading country in the region. This can be clearly seen by looking at the budgets of the countries of the region.
The draft law “On the state budget of the Republic of Azerbaijan for 2024” confirms that our country has the largest budget in the Caucasus. The draft of the state budget for 2024, which has already been approved in the 2nd reading in the Milli Majlis, and the documents included in the budget envelope for the first time determine the socio-economic development of Azerbaijan, which has fully restored its territorial integrity, in the next year, and its main priorities are construction, improvement of the population’s well-being, and ensuring its security. .
The budget revenues for the next year are predicted to be 34 billion 173 million manats, which is 282.5 million manats or 1.2 percent more than the revised indicator of 2023. State budget expenditures are predicted to be 36 billion 763 million manats, which is 139 million manats more than in 2023.
In the next year, the average annual price of 1 barrel of oil will be 60 USD based on the base scenario, the real growth rate of the gross domestic product will be 2.4 percent, the real growth rate of the GDP in the non-oil/gas sector will be 4.6 percent, and the average annual indicator of inflation will be 5 ,3 percent, the average monthly salary is predicted to be 980 manats.
In the draft budget, the social expenses were increased by 1 billion 34.5 million manats to 15 billion 772.9 million manats or 42.9 percent of the state budget expenses. It is planned to allocate 4 billion manat funds for the restoration of territories freed from occupation and creating conditions for population settlement. It is planned to strengthen the defense potential of the country, to further improve the material and technical support of the armed forces, and to increase the expenses allocated for law enforcement agencies to 9 billion 377.7 million manats, education expenses to 4 billion 549.9 million manats, and health care expenses to 1 billion 871 million manats.
Looking at the structure of expenses, it can be seen that, as in previous years, the main goals for the next year are to increase the level of welfare of the population, stimulate investments, develop human capital, and ensure the country’s security.
When comparing with South Caucasus countries, different indicators emerge. For example, the situation is different in neighboring Georgia. The state budget of the country for 2024 will be 27 billion 800 million lari (10 billion 500 million US dollars). 5.2 percent growth of the economy is planned. In the medium-term perspective, the real economic growth forecast will be 5 percent, and the average annual inflation is expected to be 2.8 percent. GDP forecast is 85 billion 370 million lari. For comparison, let’s note that in 2012, the state budget was 8.5 billion lari, and the GDP was 27 billion lari. In 2024, the combined budget deficit will be 2.5 percent, and government debt will be 38.2 percent of GDP. Thus, Azerbaijan’s budget is almost 2.1 times larger than Georgia’s.
For the next year, the expenses of the budget in defeated Armenia are estimated at 3.108 trillion drams (7.75 billion dollars), the income is 2.767 trillion drams (6.9 billion dollars), and the deficit is 341.1 billion drams (853.3 million dollars). This means that Azerbaijan’s budget for 2024 will be 3.5 times larger than Armenia’s.
One of the noteworthy points is the steady increase in the burden of Armenia’s public debt. Next year, the country’s public debt will increase again and will make up 48.4 percent of the GDP. In general, the national debt increased by about 1 billion dollars per year on average in the defeated country. According to the latest data, Hayastan’s public debt is around 11.4 billion dollars. Before Nikol Pashinyan came to power, it was 6.7 billion dollars. Less than five years later, $4.7 billion in debt was accumulated.
Next year, Armenia’s public debt will grow at a faster rate than in recent years. So, according to the government’s forecasts based on the 2024 state budget, the state debt expressed in drams at the end of this year will amount to 4,660 billion drams. Now it is 4.395 billion. That is, it is expected to increase by 265 billion drams by the end of the year. Already at the end of next year, according to the government’s forecasts, the debt will amount to 5.318 billion drams.
If these forecasts of the Armenian authorities come true, next year the debt expressed in drams will increase by 658 billion drams (about 1.6 billion dollars) mainly in accordance with the government’s obligations. Forecasts suggest that debt obligations will exceed 12 billion dollars next year.
Meanwhile, according to projections based on the 2024 state budget, the government’s debt service costs (interest payments) will amount to 3.1 percent of GDP. In nominal terms, it will be more than 322 billion drams.
Instead of increasing pensions and allowances, official Yerevan will have to pay debts taken and spent for unknown reasons. If everything goes according to the government’s scenario, next year debt service amounts will increase by at least 49.4 billion drams. If calculated at the exchange rate based on the state budget of Hayastan, this is 128 million dollars. Thus, debt service will also increase next year and will exceed $830 million in total.
Next year, social protection and social security expenses in Azerbaijan will be 4 billion 542 million manats or 2.7 billion dollars. This is 5.2 percent more than in 2023. Also, the 2024 budget of the State Social Protection Fund is predicted to be 6 billion 919.9 million manats, which is 10.4 percent or 690 million manats more than the approved forecast of 2023.
For 2024, the living wage will be increased from 246 manats to 270 manats, for the working population from 261 manats to 287 manats, for pensioners from 199 manats to 222 manats, and for children from 220 to 235 manats. For the next year, the threshold of the need criterion will be increased by 24 manats to 270 manats.
Thus, the amount of expenses related to social security will be increased by approximately 700 million manats, which will be the main source of financial support for additional increases in many social areas.
In neighboring Georgia, social protection and security expenses in 2024 will amount to 7.7 billion lari ($2.6 billion). This is about 10 percent less than in Azerbaijan.
In defeated Armenia, social protection and security costs are 745 billion drams or 1 billion 850 million dollars. This means that it is about 1.5 times less than in Azerbaijan.
One of the points of interest in the budgets of South Caucasus countries is related to military expenses. According to the draft budget of Azerbaijan, 6 billion 421 million manats ($3.7 billion) will be allocated for defense and national security expenses. That is, on the one hand, the construction of the army remains a priority, this amount is enough to buy modern weapons and develop the military industry, and on the other hand, Azerbaijan also shows that it has not started an arms race.
Neighboring Georgia’s military expenses for the next year will total 1,370 billion lari or 513 million dollars. This is about 7.2 times less compared to Azerbaijan.
According to the budget, Armenia will direct 41 percent of capital expenditures to support the defense sector in 2024. In 2024, capital expenditures will increase to 710 billion drams (about 1 billion 775 million dollars). 555 billion drams ($1.4 billion) will be allocated to the Ministry of Defense of Armenia. Defense spending will make up 5.3 percent of GDP.
In all cases, the comparisons lead to the conclusion that although Armenia has increased its military spending compared to last year, it is not able to be at the same level as Azerbaijan. At least because Azerbaijan’s defense spending will be 2.1 times more than Armenia’s.
The comparisons lead to the conclusion that Armenia, which kneeled before Azerbaijan in the Patriotic War, is not able to keep up with our country in any fields today and will never be.
Of course, the main factor determining the success achieved by Azerbaijan today is the correct implementation of the thought-out economic concept of President Ilham Aliyev. All this happened as a result of the successful implementation of the given promises. As the leader of the eras said, there is not a single promise that has not been fulfilled in the last 20 years. Today’s realities show that Azerbaijan is walking confidently towards the future on the right path.
Victory budget: Great return, restoration of Karabakh and Eastern Zangazur
In general, one of the main goals of President Ilham Aliyev in the last 20 years has been to turn Azerbaijan into a self-sufficient, independent country. For this reason, economic independence was the main priority in the country and played the role of a foundation for political independence. Thanks to Mr. Ilham Aliyev’s independent policy and successful diplomacy, Azerbaijan is today a powerful country with self-sufficiency and economic independence.
This is confirmed once again by the fact that the unprecedented reconstruction and construction works carried out in Karabakh and Eastern Zangezur after the Patriotic War were carried out by the state on its own without receiving help from anyone.
Today, the construction and construction works carried out in our lands freed from occupation, the implementation of the “I State Program on the Great Return to the territories freed from occupation of the Republic of Azerbaijan” are being successfully continued. Both our homelands are being rebuilt and our compatriots who were forcibly displaced are returning to their native villages almost every day.
Ensuring the Great Return to our territories freed from occupation is defined as one of the five National Priorities of Azerbaijan until 2030, and for the realization of this priority, the “I State Program on the Great Return to the territories freed from occupation of the Republic of Azerbaijan” covering the years 2022-2026 was implemented by the head of state 16 approved by the order dated November 2022. The program serves two goals of the National Priorities – sustainable population settlement and reintegration of territories into economic activity. It is planned to implement the measures under the program in accordance with the set target indicators of infrastructure, further development of the economy, social development and balanced development of the environment.
According to the latest information provided by the executive agencies in 2023, a total of 30.5 billion manats are required for the implementation of the I State Program on the Great Return in 2022-2026. For this purpose, approximately 6.6 billion manats have been allocated from the 2020-2022 state budget. In this year’s state budget, 5.3 billion manats will be allocated for the implementation of the mentioned program, and a total of 10.6 billion manats will be allocated in 2024-2026.
Thus, if the projected funds are also taken into account, the amount of funds to be allocated for the implementation of the state program for the years 2020-2026 will reach 22.4 billion manats.
According to the state program, it is planned to restore 8 cities, 8 settlements and 84 villages in Karabakh and Eastern Zangezur at the initial stage. With the participation of President Ilham Aliyev, the foundations of 29 settlements were laid. In general, 63 objects of various purposes were opened by the head of state within the framework of reconstruction and reconstruction projects during the post-war period.
In general, after the end of the Second Karabakh war, 7 billion dollars from the Azerbaijani budget were spent on reconstruction works. The planned minimum budget for the next year is 2.4 billion dollars. Therefore, our country has carried out the restoration of Karabakh and Eastern Zangazur without receiving any financial support and assistance, and from now on, Azerbaijan will turn our ancient homeland into a paradise at the expense of its economic power.
Support for socio-economic development of Nakhchivan is among the priorities
One of the priority directions of the budget policy of Azerbaijan in 2024 and in the mid-term period is defined in the “State Program for the Socio-Economic Development of the Nakhchivan Autonomous Republic for 2023-2027” approved by the President’s order dated June 5, 2023. consists of the implementation of measures.
The rapid reintegration process, large-scale construction works and applied concessions and exemptions in the territories freed from occupation, as well as the prospect of establishing relations between these territories and the Nakhchivan Autonomous Republic through the Zangezur corridor create opportunities for the application of a similar framework in Nakhchivan.
Currently, the work to be done against the background of accelerating the level of economic development in the autonomous republic, ensuring a decent standard of living and employment of the population, further improving the state of social well-being and strengthening environmental security has entered a new stage. As a result, development and implementation of complex programs related to the socio-economic development of the autonomous republic has come to the fore.
Taking into account the above, the main goal of the said state program is to accelerate the socio-economic development of the Nakhchivan Autonomous Republic and ensure its full integration into the country’s economy by ensuring sustainable growth and raising the standard of living of citizens.
In this regard, 11 priority directions and 5 target indicators have been defined in the state program for 2023-2027, and all measures planned for the implementation of the program are grouped according to those priority directions and target indicators. Thus, by effectively using all the available opportunities of the autonomous republic, measures related to elimination of shortcomings and acceleration of socio-economic development will be carried out taking into account the mentioned priority directions and target indicators.
In connection with the above, the implementation of the measures defined in the “State Program for the Socio-Economic Development of the Nakhchivan Autonomous Republic for 2023-2027” was considered as one of the priority directions of the budget policy in the medium-term period, and for this purpose, funds in the amount of 249.1 million manats are to be met in 2024. financial guarantee was created in the state budget draft of the year.
Thus, according to the updated macroeconomic forecasts, the growth of non-oil revenues and the expanded medium-term resource envelope based on the proposed trajectory of the budget rule, the strengthening of the country’s defense and national security capabilities, “State Program for the socio-economic development of the Nakhchivan Autonomous Republic for 2023-2027 “allows to meet the expenses related to servicing the public debt.
One of the new goals is the creation of “green energy” potential in Nakhchivan within the framework of the state program, the expansion of energy efficiency and the application of environmentally friendly technologies, as well as the stimulation of the circulation of environmentally friendly and safe vehicles.
In short, we would not be wrong if we say that the directions of next year’s state budget expenditures are a mirror reflecting the steps that the government will take in the socio-economic field in the next year.
Looking at the structure of expenses, it can be seen that, as in previous years, the main goals for the next year are to increase the level of welfare of the population, stimulate investments, develop human capital, and ensure the country’s security. Facts and real numbers show that the state budget of 2024 creates a reliable foundation for the future development of our country.