By AZE.US
Azerbaijan’s mountain and border districts are losing residents, and the trend could become irreversible unless the government urgently changes its regional economic policy, economist Natig Jafarli said on Prime TV Azerbaijan.
Jafarli said reports of depopulation were coming from Lerik, Yardimli, the mountain villages of Guba and Gusar, as well as Gazakh, Aghstafa, Dashkasan, Gadabay and other parts of western Azerbaijan.
Many of these areas have fertile land and considerable agricultural potential, he said. Yet residents have few economic incentives to remain in their villages.
“If we do not discuss this and make decisions today, what will happen to us in 10 years?” Jafarli asked.
Benefits and Lower Utility Rates
Jafarli said rural families need more direct government support, including child benefits and substantial discounts on electricity, natural gas and water.
He argued that applying the same utility pricing system to a small city apartment and a large village house is unreasonable because heating and maintaining rural homes generally require more energy.
The economist also proposed incentive programs for people willing to leave cities, settle in rural communities and start farms or small businesses. The support could include interest-free loans, assistance with home repairs and subsidized utility connections.
Jafarli noted that some European countries are already encouraging people, particularly those over 40, to relocate from cities to declining rural communities.
Business Faced a 200,000-Manat Connection Bill
Jafarli cited the case of an entrepreneur from Gazakh who wanted to relocate his metal equipment business from Baku and create about 10 local jobs.
The entrepreneur was reportedly told that he would have to finance an 18-kilometer power line to connect the facility to the electricity grid. The projected cost was approximately 200,000 manats, or about $117,600.
Jafarli said technical permits and grid connections should be provided free of charge for businesses opening in the regions. He also proposed electricity rates up to 50% lower for local manufacturers that create jobs.
Water Fees Draw Criticism
The economist also criticized higher charges for the use of artesian, river and lake water.
He said officials should consider not only the potential revenue for the state budget but also the broader impact of such charges on farmers and rural economic activity.
Instead of imposing additional costs, the government should help farmers reduce water losses by replacing unlined irrigation channels with concrete canals or pipelines, Jafarli said. A significant share of irrigation water can be lost while passing through traditional earthen channels.
Some agricultural projects require years to produce results. New tea plantations, for example, may need six or seven years to reach full production. However, decisions to reduce taxes, utility costs and administrative barriers can be taken much sooner, he said.
“A Budget Surplus Is Not an End in Itself”
Jafarli also questioned an economic approach that prioritizes accumulating budget funds over stimulating business activity.
If the state budget posts a surplus of several billion manats, policymakers should consider whether that money could generate greater benefits by remaining in the economy, he said.
“The budget exists so that citizens can live better. Perhaps those 3 billion manats could have created significant economic activity,” Jafarli said.
The economist called for lower taxes and fees, wider access to affordable financing and specialized state-backed lending for agriculture and domestic production.
He cited Türkiye’s Ziraat Bank as an example of an institution established to support agriculture. Turkish farmers, he said, can receive preferential loans, subsidized fuel and other assistance to purchase machinery, cultivate land and bring their products to market.
Jafarli warned that decisions addressing rural depopulation, demographic decline and an aging population cannot be postponed. Every lost year will make the revival of Azerbaijan’s villages more difficult and more expensive.
AZE.US