"What is a holiday for us when our pockets are empty?" New Year's Eve report from Baku
New Year spending woes
New Year’s preparations in Baku this year have not returned to pre-pandemic splendor. The decoration of the city is no longer as luxurious as in previous years. The number of New Year fairs is extremely limited. Apart from the traditional “Cold Hands, Warm Heart” fair in Fountain Square, there are mostly small stalls with Christmas trees and toys in the city center.
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When observing these stalls from the outside, one can see that often the dialogue between sellers and buyers does not go beyond finding out the price of the products.
“How much do these Santa Claus toys cost?” – asks a young girl.
“They are 25, 35 and 45 manat [about $15, 21, 26],” the seller replies.
“And these in a glass box?” – the girl is referring to the smaller souvenirs. Hearing roughly the same answer, she walks away.
Sellers complain about a lack of buyers, and buyers are not satisfied with high prices.
“The wages we receive are 300-400 manats, and most of that goes to debt and expenses. People are not in a festive mood. What should we celebrate? What kind of holiday when our pockets are empty?” – complains one city resident.
Independent experts believe that there is a sharp difference between market prices and the current minimum wage and median average wage. One of the reasons for this is high inflation.
The highest inflation rate in Azerbaijan in the last 14 years was recorded in 2022 at 13.9 percent. In 2023, the figure was 9.4 percent.
According to economist Farid Mehralizadeh, the inflation rates recorded in Azerbaijan are quite problematic.
“The government also confirms this with its documents. Because, I remember, in the Development Concept “Azerbaijan’s Vision for the Future”, the government set a task to raise the minimum wage to 60 percent of the average monthly wage by 2020. So this is considered a normal limit. But the government has so far failed to achieve this goal.
Currently, the average monthly wage in Azerbaijan is about 930 manats [about $547], and the minimum wage is 345 manats [about $203]. That is, it is equal to about 35 percent of the average wage. If the government were to realize this goal, today the minimum wage in the country would have to be more than 500 manats [about $300]. In addition, the high inflation that has been going on for the past two years has led to a decrease in the real purchasing power of the population,” the expert says.
Mehralizadeh notes that wages are at such a low level due to the underdevelopment of the country’s economy. Such reasons include the provision of budget revenues mainly from the oil and gas sector, limited large companies and investments in the country.
Workplaces usually pay workers’ salaries earlier on New Year’s Eve, a move that takes into account pre-holiday expenses. Most people we talked to don’t know how to live until their next paycheck after the holidays.
“I got my paycheck a few days ago, and more than half of it has already been spent. Most of the money went to food and utilities. Also on the eve of the holiday, I thought, I’ll take the kids and go to the city, sit and eat as a family somewhere. Now, with the money we have left on hand, we shouldn’t even have guests over. Otherwise we will have to go into debt to pay at least the cost of public transportation until the next paycheck,” says another resident.
The expert says the result will not change regardless of which day the wages are paid:
“It makes sense to pay wages before the holiday. But I agree that sometimes it causes problems. There are a lot of needs. And many people’s salaries and pensions are so low that they run out of money as soon as they get it. Because they have debts to pay off. From this point of view, salaries will be spent quickly no matter when they are received.”
Many Baku residents say they will celebrate the New Year by spending their last paycheck of the year on a festive dinner.
