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 Political ThinkingIn January of this year (actually on the 11th), it was reported that the President of Azerbaijan declared that the "Azerbaijani government will have to prepare proposals on increasing pensions and wages in 2016".

This really does not strike us as odd at all, because this is exactly what many other politicians are saying. The only difference is that this president, Ilham Aliyev (Ali for the friends) had stated it quite bluntly. Let's recap.

A president of a sovereign state instructed their apparatchiks to find a way to increase pensions and wages. That's right. Apparatchiks. Those people who, by definition, produce nothing and drain state ill-gotten taxes.

And how exactly are these apparatchiks to accomplish such a magnificent feat? By following Ali's leadership! In an incredible feat of economic imagination, Ali will:



Expand reforms in agriculture.

More bureaucracy and more taxation.

Continuing melioration works.

Government spending (whatever it may mean)

Improving water supply to the population.

Government spending.

Improving gas supply to the population.

Government spending.

Improving electricity supply to the population.

Government spending.

Accelerating the process of creating industrial areas.

Government spending.

Increasing economic effectives of subsidized regions.

Government messing with free markets.

Development of tourism.

Government spending.

Development of the transport sector.

Government spending. Tax and tariff rip-offs.

Hold open tenders in construction

Government spending.

Ensure transparency in open tenders but, give preference, primarily, to local companies.

Government messing with free markets.

Resolve environmental issues.

Government spending. Government messing with free markets. Tax and tariff rip-offs.

Open new Asan service centers. (government bureaucracy centers)

Government spending and increase bureaucracy.

Grant additional powers to Asan service centres.

Give more power to government bureaucrats.

And so Ali's master plan to increase pensions and wages in 2016 can be summarized in one word: Spending. But if this is the plan, why not cut-out the middleman altogether and just give people free money?

Ahhhh. But we can't do that. We are now capitalist and western and pro-free-market. We need to "incentivize" and "stimulate" in order to achieve "sustainable economic development". And how are we going to achieve this? Through government spending!!!

Meanwhile, as the peasants have hard times working the land, the government is neither "reforming" nor "privatizing" the vast gas and oil reserves that exist under the soil. That's right. The government signed PSA's (Production Sharing Agreements) with many multinational companies for the extraction of gas and oil, profits from those operations going exclusively to…the government!

But not to worry, because Ali will demand from apparatchiks to "inform" him about accomplished works on a quarterly basis. We guess that this request is in opposition as to what apparatchiks are doing now, which is to inform Ali whenever they feel like it, preferably never. It's not like apparatchiks are corrupted and keeping part of the share for their own pockets. We know this because Azerbaijan ranks 143 out of 180 in the Currupton Perception Index; that's right, bottom of the barrel… just not oil. Oh… wait…

We have said time and time again that for as long as a government has money to burn (i.e. borrow, tax and print) they are able to do whatever they may want to do. And within this context, Azerbaijan may just pull it off… until the money runs out. It's not like they are increasing their debt per capita:

Azerbaijan Debt


But that's OK, because Azerbaijan can always borrow more money from international markets by issuing bonds which will sell very well because there is such a demand for junk bonds…err… junk bonds? Oh, yeah, that's right. Didn't we mention it? It so happens that in January this year (right about the same time Ali came with his master plan) S&P downgraded Azerbaijan bonds from BBB- (crappy) to BB+ (junk). So, we can't see any problem here and we have no idea what could possibly go wrong.

The point, dear reader, is that it does not matter where you live, west, east, north, south or anywhere else in between. The politicians will get you and will make your life a living hell. Not this generation you say? This is a "free lunch"? Not to worry. The next one will pay. In spades. With blood. And misery. By the ton (metric). Again. And again. And again.

And so, dear reader, now you know. If you wish to live your life in a worker's paradise all you have to do is to move to Azerbaijan. The new and improved. Now with more "socialism" in it. For the greater good, you know?

Note: please see the Glossary if you are unfamiliar with certain words.

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