“SATIETY DISEASES” REDRESSING THE BALANCE BETWEEN ECONOMIC AND SOCIAL DEVELOPMENT IN AZERBAIJAN)

Authors

  • Nazim MUZAFFARLI D.Sc. (Econ.), Professor, Editor-in-Chief of The Caucasus & Globalization (Baku, Azerbaijan) Author

Abstract

In recent years, sustainable economic development has been an increasingly higher priority for all, both well and less developed, states. The global economic crisis that broke out in 2008 showed that the steadily high growth rates demonstrated by many countries throughout the pre-crisis years, even giving some of them the honorary titles like, for instance, “Celtic tiger,” in actual fact do not always testify to sustainable development. There are economic and social “diseases” that can disrupt, or at least slow down, growth no matter how sustainable it previously seemed. Whereby these diseases can be both internal, that is, determined by trends governing the country’s development, and external, that is, brought in from the outside world, making sustainable economic development not at all what it seemed to be before the crisis.

Economic development can be considered fully sustainable if it meets the following three conditions:

(a) the economy increases at a stable rate that is sufficiently high for its size and for the given time; (b) it is able to efficiently resist external negative impacts; and

(c) it is not oriented toward exclusively current tasks but leaves sufficiently broad opportunities for the future—including with respect to resource distribution.

In other words, economic development is sustainable if it is stable, tenable, and long-term.

Practical achievement of this sustainability is complicated by the fact that it depends not only on economic factors as such, but also on other components of social development. Conceptually, balanced and harmonious development of the different components of social progress is a mandatory condition of its sustainability as a whole, on the one hand, and of each of these components separately, on the other, whereby in terms of all three parameters of sustainability.

We should proceed from the fact that the development curves of different spheres of public life, including the economy, politics, religion, science, education, public health, and culture, wind around the common trunk of social development that forms as their integral result. Should one of these curves ultimately break away from the main trunk (over the span of a hundred years, say), it will be unable to survive independently. Each sphere of social life draws other spheres toward it and tries to bring them to its level of development (higher or lower), which is what causes all the curves to gravitate toward the common trunk. Which curve proves the strongest and is able to attract the others to it depends on a multitude of factors, including its “weight and strength” at a particular historical stage in social development and on how socially important the functions it performs are in public life.

The development of the world’s countries and regions abounds in examples that confirm this governing law. We know that in Western Europe, the capitalist economy that came to life in the womb of feudalism eventually gave rise to so-called bourgeois revolutions that raised the political system to the economic level. In the U.S., on the contrary, constitutionally enforced political rights opened the way to economic and then cultural development. 

A splendid illustration, although of an entirely different nature, is the experience of the Arab world. In the pre-Islamic period, Arab tribes were disunited and extremely backward communities.1 Girls were killed at birth, burying them alive in the desert sand. Along with polygamy, about which much has been said, there was also polyandry, when several (up to ten) men pooled their money to pay for an “extremely expensive” bride and then went into her tent in turn, leaving their staffs propped up outside the door to let the other husbands know that their common wife was currently occupied. The forms of government had only some remote resemblance to statehood. 

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References

This period is called jahiliyya (ignorance).

See: S. Frederick Starr, “Rediscovering Central Asia,” available at: [http://www.wilsonquarterly.com/article.cfm?AID=1441].

Certain aspects of this problem, in particular the interaction between surplus resources and political development,can be considered sufficiently well studied (see, in particular: T.L. Karl, The Paradox of Plenty: Oil Booms and Petro-States,University of California Press, 1997).

Calculated according to the IMF Database, available at [http://www.imf.org/external/pubs/ft/weo/2011/02/weodata/

ndex.aspx].

Compiled according to the IMF Database. Iran is included in the Figure as a country adjacent to Azerbaijan. The new Balkan states, as well as Lithuania, have not been included due to the absence of data for 1995. In its current classifi-cation, the IMF puts Slovakia, Slovenia, and Estonia in the group of Eurozone states, although from the regional viewpoint they naturally belong to Eastern Europe.

Based on conversion of the index by the Azerbaijan State Statistics Board (22 billion manats—see: Statistics Bulle-tin of the Azerbaijan Central Bank, 12/2011, available at [http://cbar.az/pages/publications-researches/statistic-bulleten/]) into international dollars using the IMF purchasing power parity coefficient for 2011 (0.538).

In 2011, domestic investment reached $13 billion—65% of all investments into the country’s economy.

Data of the State Oil Fund and Central Bank of Azerbaijan (CBA), available at [http://www.oilfund.az/en_US/he-sabat-arxivi/rublukh/2012_1/2012_1_1/] and [http://cbar.az/infoblocks/money_reserve_usd].

Data of the Azerbaijan Ministry of Finance, available at [http://www.maliyye.gov.az].

Social “satiety diseases” should be distinguished from economic. The latter primarily encompass problems that arise when the inflow of financial resources begins to exceed the absorptive capacity of the economy. Azerbaijan, for example, is suffering from the severe pressure of oil revenue on the financial market, the result of which might be galloping infla-tion. This pressure is also having an effect on the national currency, the problem of which is no longer devaluation, but, on the contrary, value appreciation with respect to foreign exchange with all the potential negative consequences. So measures regarding so-called sterilization of money are (and will invariably continue to be in the next few years) an integral part of Azerbaijan’s economic policy. It is worth noting that the economic situation, when the goods and services produced in a particular country lose their competitiveness in external markets due to an increase in the exchange rate of the national currency, has come to be called Dutch Disease, after the country that it first inflicted.

The last report in this series available at the time this article was written was published in 2011 (see: UNDP Hu-man Development Report: Sustainability and Equity: A Better Future for All, U.S., New York, 2011, available at [http://

dr.undp.org]).

[http://hdr.undp.org/en/media/2010_Hybrid-HDI-data.xls].

Earlier, before 2009, the education index was calculated on the basis of two different indicators—the percentage of the literate population and correlations of students in primary, secondary, and higher learning institutions. Now the in-dicators used, while perhaps being slightly more complicated, make it possible to measure more accurately the level of education of the population and compare its level in different countries.

Created in 1946 under The Economist, it has more than 40 offices in different countries and is one of the leaders in cross-country comparative studies.

According to the State Statistics Committee of the Azerbaijan Republic, available at [http://www.azstat.org/stat-info/demoqraphic/en/2_4en.xls].

See: CIA — The World Factbook, available at [https://www.cia.gov/library/publications/the-world-factbook/geos/

j.html].

See: WHO — World Health Statistics 2011, p. 46, available at [http://www.who.int/gho/publications/

orld_health_statistics/EN_WHS2011_Full.pdf].

For the latest study in this series, see: [www.internationalliving.com/2010/12/quality-of-life-2011/].

See, for example: [http://news.day.az/sport/118276.html].

The most comprehensive studies in this sphere are carried out by the World Health Organization, which publish-es annual Reports on Road Safety in the world, the last of which is available at [www.who.int/violence_injury_prevention/

oad_safety_status/report/ru/index.html].

See: IMF Country Report No. 12/5 — Republic of Azerbaijan, 2011, Article IV Consultation, 18 January, 2012,p. 13, available at [http://www.imf.org/external/pubs/ft/scr/2012/cr1205.pdf].

The figures in parentheses after the names of the countries show their place in the overall ranking. Compiled ac-cording to: E. Dabla-Norris, J. Brumby, et al., “Investing in Public Investment: An Index of Public Investment Efficiency,”IMF Working Paper, 2010, pp. 36-37, available at [http://www.imf.org/external/pubs/ft/wp/2011/wp1137.pdf].

See, in particular: President Ilham Aliev’s concluding speech at the Cabinet of Ministers meeting (16 January, 2012)devoted to the results of the country’s socioeconomic development in 2011, available at [http://ru.president.az/articles/4107].

For more detail, see: 2007-2015-ci

(The State Program on Azerbaijani Youth Education Abroad in 2007-2015), available at [http://xaricdetehsil.edu.gov.az/do-mains/edu/assets/file/Proqram200715.pdf].

See: The 2010 NGO Sustainability Index for Central and Eastern Europe and Eurasia, available at [http://www.said.gov/locations/europe_eurasia/dem_gov/ngoindex].

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Published

2012-04-30

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Section

REGIONAL ECONOMIES

How to Cite

MUZAFFARLI, N. (2012). “SATIETY DISEASES” REDRESSING THE BALANCE BETWEEN ECONOMIC AND SOCIAL DEVELOPMENT IN AZERBAIJAN). CENTRAL ASIA AND THE CAUCASUS, 13(2), 131-146. https://ca-c.org/CAC/index.php/cac/article/view/1349

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