In 2019, the government plans to increase pension payments in Azerbaijan. Although it is has been touted as “revolutionary", experts warn it this misleading, saying the increase won’t have a considerable impact retirees’ lives.
Shahla Ayyubova, 61, and her family have been living on her monthly pension of 180 AZN (about $105) for five years.
“Forget a month, 180 AZN is not even enough for 10 days to live," said Ayyubova, who lives in Aghdash city with her husband and son.
The government of Azerbaijan has held out some hope for Ayyubova and other pensioners.
According to local news reports, the Minister of Labor and Social Protection of the Population, Sahil Babayev, said on Nov. 27 that in the upcoming year, the pensions of 45,500 people will increase by 35 percent in Azerbaijan.
“There will be a revolutionary change in the pension field," Babayev was quoted as saying.
According to the minister, granting 25 years of employment experience to those who retire next year will provide them with plenty of pension benefits.
The draft amendments to the law on labor pensions were discussed at the plenary session of the parliament held on Nov. 27. Later the parliament adopted the law. The law will take effect on Jan. 1, 2019
The revenue of the State Social Protection Fund for 2019 is set to be 3.9 billion AZN, with 97 percent spent on the people covered by the fund, Babayev said.
Minister of Labor and Social Protection of the Population Sahil Babayev. Source: Yenicag
Currently 1.3 million people receive pensions in Azerbaijan.
It is not yet clear how or whether any changes will affect the minimum pension payment, which is 110 AZN (about $65), which
is also 20 per cent below the minimum level of income in Azerbaijan.
Opposition ReAL Party board member and independent economy expert Natig Jafarli said that it’s still unclear how pensions will be increased, as the increase won’t be applied to all pensioners.
Rashad Hasanov, economy expert of the Center for Social Economic Research, says there might be an increase in social spending, but he predicted the increase won’t be more than 10 percent, based on what the new amendments offer.
“There will be an increase in pension payment but it will be nearly 14 AZN [$8]," Hasanov told Radio Liberty.
Baku resident and pensioner Aydin Mahmudov says that this kind of increase is the state’s attempt to pull the wool over people’s eyes, adding, “It is out of the question to survive with 10 percent of increase in pension payment.”
“God knows, it is impossible. The government should increase pensions and let people live a normal life,” Mahmudov told Meydan TV.
Inflation is expected to outpace the increase in pension payments in the upcoming year. Given the decreasing prices of oil, the country’s main source of revenue, the budget needs to be calculated accordingly, economist Vugar Bayramov warned.
For Ayyubova, the pensioner in Aghdash, medical problems make her financial situation even worse. Years ago, she was diagnosed with renal failure. She has to undergo an operation.
“How can I go to have a surgery, if I can’t live a normal life with this amount?" she said.
“This pension payment is trivial to cover my family’s living expenses. In addition, we have to pay for the bank credits. We are deep in debt. Without doing a side job it is impossible to live and to pay back the debt," Ayyubova said.
To supplement the pension and pay medical costs, she has started working at the nearby bakery from where she is getting daily bread and 250 AZN (almost $150) per month.
But it still doesn’t cover her costs. She said she ends up paying 150-300 AZN (about $80-180) whenever she receives treatment at the state hospital in Aghdash.
Ayyubova is pessimistic about the prospect of a pension increase. She thinks if there is any change, her pension might increase only 2-5 AZN (almost $1-3), not more than that.
Baking bread, she said, is better than depending on the state alone.