Togrul Valiyev

Economist

NAKHCHIVAN'S SECRET BUDGET...

03.02.2023 / The next stage of the "Transparency" policy

Considering the administrative changes in the Nakhchivan Autonomous Republic, the mass media has become increasingly interested in this region, reporting from Nakhchivan more frequently on television, online television, and news agencies. While there have been recent changes in management of other regions of Azerbaijan, in Nahkhchivan the attitude towards the press has remained the same and thus there has been no such revival in the press. The situation has been different in Nakhchivan, where media representatives were not allowed to enter the autonomous republic, and local media did not perform properly.

Despite the press being active currently, Nakhchivan’s ongoing issues of transparency remain unreported on.

Until the end of 2022, the transparency situation in Nakhchivan AR regarding transparency was unclear. Although some statistical data was published regularly and sometimes detailed information was provided, there was no accountability. However, these factors depend on the field or the institution controlling them.

Although a change in administration is usually accompanied by an increase in transparency, the opposite has been observed in Nakhchivan.

An Example

Nakhchivan Autonomous Republic's Supreme Assembly held its sixth session on December 29, 2021. During the session, the 2022 state budget of Nakhchivan was approved (as were the budgets of the State Social Protection Fund, etc.). The newspaper East Gate, founded by the Supreme Assembly and the Cabinet of Ministers, published this information along with the budget structure and related documents on December 30, 2021.

Here's what happened in 2023: on January 10, the Nakhchivan Autonomous Republic held its 9th session of its 6th convocation. Nakhchivan Autonomous Republic's 2023 budget was approved at this session (even though the year had already started). There has been media coverage of the 2023 budget approval, but no details of the budget have been disclosed. In the past, detailed information would have been published in the January 11, 2023 issue of the East Gate newspaper. The newspaper's website now displays numbers for January 10 and 12, but not for January 11. Could it possible that the newspaper was not published on this date?

Interesting to note that the newspaper issue dated January 11 was published, but it was not published electronically (while the number of the newspaper issue dated 10.01.2023 is indicated as 3 (24,140), the number of the newspaper issue dated 12.01.2023 is indicated as 5 (24,142). There is no reference to number 4 (24,141) in between). It is therefore necessary to check the hard copy of newspaper in order to find this information.

Previously, we encountered unpublished decrees and orders (even rules!) in Nakhchivan (the Supreme Assembly of Nakhchivan AR generally doesn't tend to publish its acts). We are now seeing unpublished newspaper issues, indicating that the policy of "transparency" has already moded beyond to new stage.

What is the difference between the Nakhchivan AR budget and the central state budget?

A comparison of the state budgets for 2022 for Azerbaijan and Nakhchivan AR is provided in table 1.

Both the army and the border service in Nakhchivan AR are financed from the central state budget (contrary to what is being said on social networks, neither the army units nor the State Border Service were financed from the local budget). In Nakhchivan AR, defense and national security expenses are only attributed to the Mobilization Committee, the State Security Service, and the Foreign Intelligence Service.

There are similar clauses in others too. For example, Nakhchivan State University students' tuition fees are paid directly from the state budget. In order to provide a more accurate comparison, we deducted these items from the state budget expenses. This provided an interesting result. When social expenses (education, social protection, health care) are added up, the Nakhchivan AR budget appears more pro-social because those social expenses account for 41.64% of the budget expenditures in Nakhchivan, while the same social expenses account for only 36.44% of the overall state budget. Moreover, agriculture, housing and communal services, and environmental protection expenses are 1.9, 2.6, and 1.9 times higher in Nakhchivan.

This difference in Nakhchivan AR budget from the general state budget could be attributed to a difference in regional needs. Previously open sources were available for comparison. However, the current budget structure for 2023 is unclear…