Shamseddin Hajiyev – professor, rector of Azerbaijan State Economic University
Dear forum participants, Ladies and Gentlemen!
I would like to declare the meeting of Baku International Humanitarian Forum open. Today we are at the meeting of the V Section. We are going to have three round-tables on humanitarian aspects of the economic development modules. I would like to introduce to your the procedures and time-limit of round-tables before we pass on to the Forum. Each round-table will continue for an hour and a half. Moderators can lead the round-table discussions in any format they prefer. After the first round-table there will be a short coffee-break; after the second one there will be a break for lunch. We’re planning to start the third round-table at 16:00pm. After the Statement of the Baku International Humanitarian Forum will be discussed we should have commitments on the paper. The Statement is distributed and you all have it. And we invite all guests to Yacht Club for dinner party. Furthermore, with great pleasure I invite all our foreign guests for a short acquaintance with the Azerbaijan State Economic University. If you have any proposals on what has been stated here please, individually make your request.
Now I would like to introduce the topic and the participants of the first round-table to you. The topic of the round-table: “The World Image of the Economy”. Mau Vladimir Aleksandrovich, is the moderator of the first round-table, Rector of the Russian Presidential Academy of National Economy and Public Administration (Russian Federation).
The participants of the round-table are introduced:
I would ask the participants of the round-table to take their seats. There’s one more issue that I would like to bring to your kind notice: we have a guest among the participants of our section, Mrs. Dora Bakayanes, Former Minister of Foreign Affairs of Greece. She would like to make a speech in our first meeting beyond the program and share with us her ideas. I am sure she will have opportunity to make her speech. For the moment, I finish my mission.
Маu Vladimir Aleksandrovich
First of all I would like to thank the organizers of this Forum and start my modest obligations as a moderator.
The theme “The World Image of the Economy” hasn’t got identical translation. There are endless discussions on what is the economics of science. It is said that economy is that field of activity that economists deal with. In the East the first economists were doctors. There’s the second generation of economists-they are philosophers and lawyers. So, what is economy? Robins told that economy unlike social sciences deals with define factors but not with values. I think today we can discuss this issue only for ourselves: is economy a technical science or more of a social one? Every period has its specific principles of economic development. Presently the world economic processes depend on many factors; even the economists themselves aren’t able to state them.
Thank you very much. Thanks to the organizers inviting me to participate in the panel. There are two approved models what I should talk about it. I will do my best. Perhaps, I should I ask the moderator. How long do you want me to speak to?
Well, we have already run out of schedule. Maybe, ten to fifteen minutes.
Ah, even although I am the first member.
First, I know why candidates said economy is a moral science, because that’s what there was in Cambridge, told after mile show managed to connect the independent subject to independent philosophy. Subject based on a philosophy. It would be incorrect to call it an empirical subject. What we have to look is not very abstract things, but quiet concrete habits. So I decided to study the economic development models as the particular way to interpret that the countries have done their economic developments. It is perhaps to say that the countries haven’t been done their economic development in such similar way. I am going to think particularly of Chinese economic development model. And very deliberately and exclusively, China during economic reform – in 1978, decided that they were going to industrialize. To say they were going to follow a development model that would probably involve Peking barbarization. Great deal of investment and industrial pagans one time. Of course, this would mean, that there should be consequent improve spiritual of export, rapidly increasing development of foreign trade, for the best my knowledge most of the discussion was put them in these terms. They were going to introduce free markets, somewhat gradually, they were going to allow private price, but they were also going to take carefully considered researching developship infrastructure of the economy, generation of power. Pigging out the codes. So, this is all terminology that makes people think that so it is not talking about what was going to happen with people, seems that to be surprising. No. Look back of China, and say if you consider one very important aspect of human results of economic development, namely level of poverty in the country that beaten on any reasonable measure, poverty has significantly been increased. The standard measure that is called the property head come. Not all of us are aware of that. Just remind you reflects to extra part of population who are on average in joint of extra work where 1 dollar 25 per day and it touches incorporative patterns will get down precisely property terms that’s reflect 500 US dollars in a year at prices around . According to the figures of the bank websites, not talking of only Chinese so not to talk considerably involved. It is out of 85 % above mentioned below that poverty line in 1970-1980. In 2005 which is the last year of the actually have more or less reliable figures for the property head come 15 % below that level. Per step, that seems to be tremendous development. It is interesting to me that, Kazakhstan has had a similar experience. Perhaps not quiet sublimatic that’s from random higher property head come, stabile 2 dollars a day. And it seems to me that it was nearly with similar reasons. And now, let me get into what I think that question might be enthusiasts me faced to the mentioned:
Did China do well?
I think it is planned pretty well. But there must be a question more might be done. Because, going for industrialization does not seem to be quiet the right way to developing papule really care about it is the standard of living of poorest society. If you look for industrialization that the idea that is economic model, that puts production in industrial part of economy, because of preferably very fast. It is reasonable easy for countries to globe the webs ling 10 % of the time. If it’s succeeds probably by its own savings GDP China had rapidly achieved. But the question is how to operate a small number of workers? For the first, you must be dry in those who have been living in the less form of the economy. Especially in agriculture and local services for the rural poor… and you can be driven in cities, go to cities… but, what happens there? Because it’s China. The same kind of picture. For all of the successful developing countries, who have considerable population from rapidly grow and that movement in China is about 4 % of the urban population through a year. So it is not perhaps the enormous move and the other countries rather bigger ones. Ones that doing that is bringing people in from rural areas where their standard living was average below. To get job in urban areas, where the wage would be high for China. This is three times that average income that has been in rural areas. And then that is remaining the pearly steady figures of period of economic development. And the increase will save that is random expensive way of dealing with poverty. And what you said is true; we will stretch your income. And we are also doing. You are going have to spend chunk of land on housing issue, actually much more expensive in rural areas. In real terms of living standards, it will not be increased by as much. Cost the economy that level of wages, because standard living consists of not only … you can spend and then you will pay tax from wage. This also facilities a necessity. Bank of freshwater.
I tried to do more carefully that whether one could say what really wrote about this improvement policy figures in China… Certainly, industrialization make contributions… say, quiet a lot of people who move from rural areas to urban areas…. The standard of living is much higher and very few urban areas and extreme any form of them approved. And to my surprise I found that one actually had credit a large part of reduction in publicity measure to the growth of agriculture. Now in China…hmmm you are going to notice many of you. This is very high in Azerbaijan. The gross rates of agriculture were admirable good. But it was much low than the grow rate of economy, roughly 5 % a year of the economic form period compare with 8 – 9 % in the standard. This is a very substantional contribution. Why? Because, first incomes of the people in urban areas were been increased. And rates were low because, they produced more in the bottoms. And they sold them. And the key thing is the relationship between item, which is an abstract monetary concept and enginemen line having enough food…being able to find necessary current…it’s the human side of aspects. And that is where it comes from. That help is not. Because, China produces more food than reduce poverty. This is because; they generate more income for farmers. And of course, the spins of economy in rural areas are generally will normalized poorly and in provisional services and local manufacturing as well.
And I chose some figures from Azerbaijan. And, did Azerbaijan very impressive growth of agriculture. But also, it seems to be strong considerably low rage growth than the growth of economy in the whole. Because the norms are different in Azerbaijan and in China. Because, Azerbaijan has tremendous grow from oil. But I think this is absurd, but probably true that, that has made considerable contribution to the reduction of poverty. I think clearly all of these raise questions but more should be done.
Whether the economic development should be concentrated more in rural areas? In Chinese case, it will little hard say that Chinese government did very much to Chinese, to improve standard of people, their incomes. But they did substituted fertilizing. China has enormous grow of fertilizers than another chemicals used in industrial parts may develop well Subsidies seemed to be very good. Probably, that was intended to the precisely level of effect.
I met here some questions about whether the economic development models are truly previous assessment that might still have been more successful proper waste to the human effects. That is to say particularly standards of living in the poor’s. And I surely relate that reminds to constant that complains. Everybody needs, but it seems to have attendance in increase and best reward the difference between took the industrial revenue and the rural, agricultural be true is exactly creating the acres of corporate in a many of the developing countries. That is not mind in American’s. For the developing countries that is exact what is going on.
Yevgeniy Grigoryevich Yasin – Head of National Research University Higher School of Economics
I would like to enrich the issue that all citizens of countries are concerned about which is the process of transition from a socialist economy to a market economy. Nations having the process of political experiments thought about taking the people towards better life; provide high level of life conditions and become more independent. And 20 years had already passed. Presently when we meet people who lived in Soviet Union most of them criticize “the shock therapy” that had to bring to quick success in market economy. There weren’t great successes. I exclude Azerbaijan and Turkmenistan that had possibilities to benefit from natural resources. This factor is less depended on those efforts that the Government initiated. We should think over those factors that are important and would bring to positive results. I would like to share my opinions about this issue with you. We should look at the world in another way: in the case of culture and social norms that settle social cooperation.
More concretely, the history of human civilization is extension and expansion of cultural relationships. Presently we live in the world with several dominating civilizations. Nowadays it is popular to speak about multi-culturology: all cultures are equal. I agree with it only from point of view of political correctness. But from point of view of the world image of the economy, at least it “creates abnormality” for us. Presently we should focus our attention on priorities of western culture in the period of globalization. We should pay attention to: 1.high level of impersonal relations; 2. Competition that creates big malice. On the other hand, in capitalism we observe extraordinary material progress. The whole mankind felt independence that had happened due to competition. Competition creates real demand for innovation. All nations are clever and creative. Healthy competition should be held on equal terms. Here I take into account not only economical competition, but political one too which is oriented to increase material welfare and intellectual development. It is extremely important. I am for economic competition if there’s also political competition that allows you to give healthy character to economical competition focused on productivity but not to look only for material benefit.
Connection between prosperity and good government
It is debatable, some says it’s prosperity without good government, others say you can have good government without prosperity. I am using these terms round elusively, by prosperity I mean economic development and by good government I mean band of institutions, associate good democracy, freedom, political liberty, and rule of law and so on. But the question then remains; which comes first? You should have good government in order to get prosperity or is it a government of some result for some pro prior stage of economic development?
And in fact sensible people understand there is two interact in rather come complicated ways but it may be useful just to stop the discussion by taking two different genius seeing two – consequences they did. But well – known book on economic development the “Rise of the West” Douglas Row and Tomas argued that in order to have economic development you need a shift in institutional parameters. And specifically individual and social rates have return after be implied and for this, for that to happen set elements remarked. Economy has to be established like well – specified property rights protected by law against both sovereign and against custom. And said the book is rather it is an examination of the incentives facing the government two other institute pro – grove market institutions or to repress them and England is an example of a country that did the first and Spain is an example of a country failed to innovate institutions that provide the market development and a fate is large in economic history at last two, three hundred years.
And nearest two things in this to be; first good government does not have to be indigenous, it can be poled from outside and that is the argument from pluralism as an agent of development. And secondly for the later development of the market economy requires a degree of political pluralism, obviously to elevate the rulers very ready to consider the market institutions voluntarily there has to be some sort of pressure and that presuppose certain amount of pluralism. And that political pluralism does not have to amount to democracy. It does not have to amount to democracy or it does not require democracy?
The argument for democracy and at human rights comes after, in the later stage. And there is no connection between democracy and economic development too, except possibly did it heroes once in America. Well, what about the arguments that good government is a consequence not cause of economic development. This view rarely comes in the simple form a sensible version would be the safe government has to be at least effective enough to maintain law and order and the security trade for economic development to start. Then after it started you get the rise of the middle class or the merchant class and further development of economy depends on this middle class forcedly and extracting political concessions and from sovereign and from this view of matters a liberal political system is a consequence not cause of economic grow. And I would say this is the Marxist based superstructure argument and in which the material conditions in production I am determining it is as the political development.
Now, I mean these two views have consequences of one things policy about how the development should be. If the first is correct then reestablished multi liberal institutions broadly defined whether indigenous he generated or not is a necessary condition for the economic development for the world? If on the other hand we believe liberal institutions follow on from the economic development then keeping a dictatorial but pro grove government in part is paradoxidly the only way of the possible political progress at the next stage. Premature democracy on this argument may well be antigrowth sensibly its populist policy which aims to dispose the middle class.
So I need the history. The history is full of examples. I think it is a general law. And if you could do, the English place then I mean, seems to be example of the first view. You have very pro grove pro political institutions established very early of 17th century and then economic growth follows from that leads eventually towards the end of progress process towards political democracy whereas Spain has the different goals. They did not have pre – market political institutions which is established from others never forced to share power, he never had incentive to interfere with customary property rights, and therefore the country` stag native for two hundred years.
And today Botswana may be set the constitution model version in England like The Ivory Coast, contemporary version Spain have the same contrast to Latin American Costa Rica and Guatemala. But then on the other side you have only examples of Germany, Japan and China. And Germany and Japan certainly have experience of very rapid grow in per capita income. In the end of 19th century and early years of 20thcentury but not having liberal political institution in fact market and political system was somewhat repressed.
In both states they were very, very successful. And you cannot say whether that is that sort of authoritarian political system would not led in the end super development of full liberally economic and political institutions because they were opposed on them Germany and Japan after their defeat in the two World Wars. You could say that it was not sustainable system because system in which you had a repressed politics and free markets was bound to produce tension so great that it would explode some kind of war.
That could be an argument, but again it is impossible to say but it is relevant typical of China. Because, China is another case, the example of a country with a very repressed political system. It is experiencing very rapid grow. And the question is; will the dictatorial system lead amatively wide prosperity of the middle class to free political system? The institutional change which should make the economic development self sustained. Well I think this is a question we will never find answer. I have raised very difficult materials, I have really been able to find my terms properly but I think today the dominant conventional wisdom is that we wholly need to get to or what you need to get economic development is to get good governance and what you need to get good governance system the helicopter in the sector of institutions. UN could be.
Anyway basically you helicopter in sector of institutions and then they get economic growth. I think that must be wrong. And locked policy based on it must be wrong. But what is the right policy, because it does not seem to me live in take irrupted taker ships in power and hoping they will produce economic growth to have a little class could be able to provide disciplined system, it does not simply backward thoroughly that is so as you know universal law only the second question but I don’t think I did interest in…
Thank you very much!
Ladies and gentlemen, good morning! And probably, I am the only lady –member of around this table.
So, let me speak a little bit about the Greece experience. Probably, all of you have been following the news. I would much like not to be in the news but I know that the last year was full of Greece in all the news of the world. Lord Kerensky was polite enough to mention Spain and not the Greece. But I cannot speak about anything else today when practically my country poses so many problems around the world and mainly to our European partner.
So, let me thought and say what went wrong with the country with the geography of easily privileged position which for the last 10 years had GDP growth focus add average where people live well, I would say, extremely well and with the second biggest marine fleet in the world, the first in the European Union transporting on further the world woods, what went wrong with this.
So, let me just continue a little bit what Lord Skedelski spoke about good governance. I am a member of this political system, but I must only admit that Greek political system is faint, completely. And we say completely because when there, it is an agreement that we went democracy as you know in Greece. But together with the democracy we invented also democratism, populism. And that is exactly what went wrong in this. Because for years that political system falls, that we should produce more, give more for the people.
And on the other side was lonely in the money, because, we depended on the money. So, we lived much over our possibilities. And thus went wrong. And thus was international crisis of course. It is blue up. And when it is blue up, we are now in one of the most difficult situations for the people around the world.
Because the Greece woke up and realized that they have to live with 30 percent at least less when they used to live in the last 30 years. This is extremely difficult.
So, if there are two lessons to be learnt by the Greek experience is that: “Yes, you need good governance.” You need good governance and democracy has there a big progress. Because for the first time we realized that in democracy you have your limits. And the limits are that, if you don’t have responsible politicians than they go on, so but there are some other politicians, but trying to be popular, you gain votes, you don’t gain good figures, of course in your following.
And the second is, this is that what you just wanted think about. Probably most of people sitting around the table are the professors and academics. What is a democratic system? What is this doing? I am not speaking only about the country now, but also for example about bigger unions like European Union. When it faces with the markets which have a possibility to make decisions very quick, in one night without asking anybody or in one minute, yes. And on the other side you have the institutions which are, which have to meet, to meet again, to talk about it, the media and all the complex system we live in, which practically puts you always in a disadvantage towards the markets. And for the first time the politics is losing ground. Because politics cannot ground, win over the markets and this is one of the main issues for us in the European Union. It will be for you also, for Azerbaijan, later on. But this is one of the principle questions, which I don’t know if anybody has the answer to it, I have not found an answer. Any find understanding the world situation, this is the main question for the United States and the European Union in the days to come. And for us, we may be two and a half of people said of the European GDP, but Greece might be the region to reconsider our institution on the European Union.
So, that we have another way to make decisions. So, the decision making process can be quicker. So that for at least we keep up the hope that politics can win over the markets.
Thank you very much!
Thank you very much. I would like to thank the organizers for inviting me to a beautiful city Baku. It is my first visit here. I would like to start with personally note which has relevance for a discussion. I grow up in India, in a very provincial town, thinking and dreaming in the English language. And when you think about language in India, there are 15 main languages, hundreds of dialects and then wide variety of cultures, customs. How do you describe this situation? May be, the cultural forum to which I have come here and then I go to America and teach at Columbian University and I walk to, only walk to my office and I see so many diverse faces: Chinese, Indian, Russian, African-American, certainly. Here, so many languages and I tell myself how may I describe this situation in America. When, there are so many diversity. And may be again cultural humanitarian Forum, where there is the mixture of I am living world that I have been living and working for 50 years, now.
That is my personal observation. But the country I have adopted is my own America. What can you do more have been adopted there which I do not want to discuss.
But I am going back in to my own historical development, talk about the root model in India which began in the 1950-th under Nehru, after India became Independence in 1947. And then make a few comparisons with the Chinese developing model.
So, this is then thought of the basic conceptions underlined the root models in both of the countries, I would see the Chinese under tension of the period which started in the 1970-th.
Asked for the differences for both countries anything what you want to talk us specifically the first, the Chinese root model I think, as it took its shape in 1980-th, wholly in 1990-th, it became up the export oriented root model. The rapid route of exports were promoted the root of the economy, whereas Indian model from the very beginning have been not to be have calling in India, the Indian economists had been calling it as an import substituting model.
That is to say we produced Indian producer home which they used to import from the abroad. So that, I have distributed some numbers not to use the pointed out for our presentation here, but if you take the number of export and promotion of GDP in the year thousand and seven Chinese exports and promote of GDP becomes 35%, whereas Indian what is about 13%. So, that is therefore a great difference in the developing strategy of the root model. And further had been referred to here, in the discussion earlier the root models, the main difference of both is that Indian root model under Nehru has been more or less a liberal particular model. So that, if you go to India and if you read about India most of the time the elections are taken place in a province, in a city and percentage level up to the level in a period up past 60 years the public had been exposed to so many elections, it is incredible. There is always some elections taken place, any people do that. And my formal teacher at Harvard described India as the world’s largest functioning energy. It is energy when, it is poses but it functions. So that model, of course it had been very different from the Chinese model as it had been referred to earlier a humanitarian model. But if you take then both from the differences here of the strategy: export – promotion was a system, substitution of root model, authoritarian was a liberal root model.
The consequences, the desires – what are the humanitarian or the welfare aspects of these two models. And again I have distributed some tables which I couldn’t display here but our point just a few numbers.
China outperforms India on all social indicators. If you take, for example, infant mortality – there about 48 children die out of one thousand life expectancy at birth in India. This is thousand and ten number, whereas the Chinese figure is 60. If you take female literacy grade – China is again well ahead of India. The Chinese number is 91 out of our agreement – educated and Indian number is 51 in 2009.
If you take the poverty rate the number of people who is below a certain poverty rate established each country the Chinese promotion is only 3% of the people that are in the poverty rate in 2004, whereas in India it depending 8% of population under poverty rate. Just, those the other day in United States that is 46 million Americans are currently under the defined poverty rate. And that is when the enormous number. But I think again about other thing.
But coming back to the China-India comparison the two models therefore take the humanitarian aspects, welfare – china had been where there head opinion is root model is social indicators. Yesterday in the panels there was …five minutes? Ok.
I want to tell about the role of technology in this development process. It is a lot way going on in India. It is very inspiring. For example, the cheapest car in the world had been put together by the car company cost to seven thousand dollars when the certain car watched that an Indian family goes on scooter. The father drives the scooter with the child in front of mothers sit the back with the child in her lap and this is the way to starve, even in the rain and eat.
So, I can construct a small car. And he did that. The Indian company has produced the cheapest, modest computer now which costs about 35 dollars. There are millions of Indians now using the mobile cell phones and there are enormous researches ways on, than by, for example, forwarding common wealth in southern part. The fisherman the half dressed goes on to a little boat to the ocean to catch fish and then comes back with his fish. Where shall I take my output of fish which part of the shore, this part or that part? He uses mobile phone and then went the prices higher. Where I may take my fish supply which I have caught. So, the grown technology is again making an important role in India for the first 3-4 things.
Finally, I want to think of convinces made by my eastern colleague Yasin. The export promoting model in Azerbaijan and Russia was the last table I had given. They both in Russia and Azerbaijan have brought more emphasized group an export and extra-natural resources they exports. And if you see the cable, the enormous volunteerism. In the export of oil, for example, the export blue at 63% for Azerbaijan in the year 2007, in the year 2008 it blues the country exports more than 24%. In a year export brought in. It is so-so negative for some years, similarly for Russia. So, then the whole question analyses what kind of instability and dependence of an export the root model from the natural resources. Root model creates for some policy makers. So my final point automated as certain kind of institutional framework where a certain direct making try to pay to relationship develops between dominant and private enterprise which is national recourse leaved very much. And how does this create certain competitive market based environment? In recourse based large enterprise close relationship in the country. Finally, what is the sign of marvelous, which they can treat like Azerbaijan, Russia and similar situations should imitate how will it develop, how will it broad it to western style, market based, competitive model, and then I would like to finally end with the quotation Todelsky sites, on the greatest reformers of the 20th century Payne’s who said that…like Western civilization, because of the three things, that it has scientific inquiry, it is a law based system and finally there are religious sensitibilities. So these three aspects, they create a certain kind of institutional environment and still problem for someone in develop emerging markets emerging market economies, with enormous talent Russia and Azerbaijan, enormous level of education, enormous recourses, all these facts allow to think for years in Russia and here also, how do these countries go into that kind of arrangement? Thank you very much.
Nazim Imanov – professor
Dear friends and colleagues, I warmly greet you. Today I decided to talk about the harms of accumulating too much, in other words, about the complication of superfluous. Before passing on to the topic, I would like to share with you scenery that I have observed in Azerbaijan. In Azerbaijan, it is a rule that students complain about teachers and teachers about students. The complaint is that students don’t study well, and teachers don’t teach well. People of both these categories complaint about doctors, saying that they don’t treat them well. These three group complaint about police. The sum of it all is that these four groups together complaint about the economists saying that they aren’t able to think out good ways of resources ways that can revive the state. But deep down all our complaints, there’s incorrectness, and it is that: what make up the doctors also makes the teachers; same is with teachers and journalists; journalists and students; and finally, students and pupils. The basic principle is established in one of the laws of nation’s development which is that the spheres identifying public life can’t be separated and has different directions. They look like functions dancing on one common development line. One of them science, education or economy in some cases can go ahead but can’t advance higher. In this case it can pull other spheres of public life after itself. In some cases when its weight becomes heavy, the one left behind can bar the development of others that are in front. But they are inseparable. Religion, science, education, health, and economical increase – these are inseparable components of public life; sometimes we consider it as an example, but in reality it is so. In various states and nations the diversity of these public spheres comes first. For example, when the Koran was sent to our Prophet, then the Arabs were the most ignorant nations: kill the baby if she is a girl, polyandry, polygamy; it is unimaginable the height of ignorance like this. But when Islamic religion came, Arabs started to establish their own state, nation and later the Golden Age of Islamic East began. Since XIX century Islamic movement has led to the greatest discoveries, the greatest sciences, the greatest art established in the East including our region and that time we lived the Renaissance Period. Religion was so progressive that it could easily carry after itself other spheres of public sphere and therefore we lived the great Renaissance time.
Development of America was different. Initially Constitution was adopted, ethics policy was created and then political freedom was synthesized into economy. The experience of different countries is different, but the main issue for us is: what happens when economy comes first? If in the development of society, economy overcome other spheres, doesn’t matter what brings to the sequence, oil, gas, etc., what happens in the development of the society? In other words, if there appears economical surplus in the economics of the society then what does happen in the society? Certainly it should be taken into consideration that surplus and fat are different things. A fat man may be hungry, and thin man can be satisfied and have a surplus. Economy is also so. Big and small economies can be hungry. Our economy is comparatively small; as we know our country is on the hundredth position in the world for common internal production per capita. Despite we have a small economy but it is a very fast growing economy.
In 2003-2010 the total domestic production per capita in Azerbaijan, taking into account the purchasing power of the manat, it increased from 2,326 dollar to 10,063 dollar. It is unbelievable surplus and development; and this economical development provides very great resources for the economy. I understand with this the priorities should also be clear. First, the people’s well-being becomes better; the money entering the country willingly or unwillingly is distributed among the population by any way, the state also thinks in this line; it means that material well-being of the people also increases. Secondly, it creates possibilities for internal and external investment. Presently Azerbaijan is investing big capital both in the country and foreign countries. For example, Georgia has a very small economy and total volume of Azerbaijan’s investment in this country, instead of annual accumulated volume is above 2 billion. These are official figures. It means that Azerbaijan capital contains the core of Georgian economy. Azerbaijan makes investment not only in Georgia, but also in other foreign countries. Widened possibilities creates opening for infrastructural building; political and economic reforms become easy as the government gets possibilities to fulfill the population’s needs. But along with economical increase and surplus also comes complications. One of these complications is related to other areas of public life – development of science, culture, health, education, religion; all these are not able to follow the economic development, and don’t achieve rapid improvements. Obvious case of this is the scenery we all observe in Baku in our daily life.
An Azerbaijani driving a car of 200,000 manat through Baku streets can easily throw out from the car window the empty bottle of mineral water. Therefore with riches culture suffers; this means that culture can’t follow well-being, it remains behind. It is certainly a very simple example. But in general this is what we have achieved today. This is the common shortcoming of human being. But there are more concrete complications of this process. One of them is that the resources are not used rationally as possible in all cases. It happens not only in Azerbaijan but also in all other countries. The other complication is related to extreme consumption in the society. Azerbaijanis keep three, four, five, six, sometimes even ten cars per a family. And they don’t understand that this is consumption in Azerbaijan society; of course, the level of well-being is good, wealth is fine. But if the growth rate of economic development overcomes the growth rate of other spheres of public life then the negative cases related to high consumption are not unavoidable.
I made analyses and determined the relation between the growth of common and per capita domestic production and development of education, health of the population in 1992, 1998, 2003 and 2010. Unfortunately, I have no opportunity to demonstrate the results of these analyses here. Mr. Avaz has seen all these results, he is sitting nearby and the results achieved are strange. Anyway, during the development of civilization we have always been, and we are, in front due to the rate and level of economic growth in comparison with our neighbors and nations around. However, despite we are at the forefront of economical development, we are below the trend related to the development of other spheres of public life that is the level of religion, culture, science, education, that should logical have attained same level of the country’s wealth. Therefore, I think maybe we need to review the costs directed to these spheres and the achieved results.
For the analysis, we compared the indicators in nearly 30 countries. And it is strange, but we found that there is no direct relation, or rather, correlation between the cost of health sphere and the health of population or in some instance, the gap is too big. It is interesting, why? And I came to such a conclusion that health, education, religion, of a population and in general, other spheres of public life besides economy are extremely inert. To activate these spheres, make them mobile, advancing demands great resources and long time investment. For example, Azerbaijan increased its capital for the development of health for 5.1 times. Presently Azerbaijan spends more money per a capita than its neighbors, even more than many countries in the world. But if you increase your capital for the definite sphere it doesn’t give results in the second year. You should keep financing for fifteen years in order to achieve the planned outcomes. It means that inertia of these spheres is very high. Another outcome that I have obtained during these analyses is that it is the duty of the Government and the Government should do its best to fulfill its duty more effectively and in a good manner. For me I think that our problem is related to the society that doesn’t fulfill its duties. In fact, intellectuals, religious figures, public organizations, the whole society in general keeps itself aside from personal-cleaning. Communities – working communities, student communities, teacher communities and vocational communities are not functional. These communities don’t fight for their interest (in the meaning of to ask, to want something from the society). I think if Azerbaijan wants to eliminate this difference, there’s only one way, frankly to say, to achieve it, and the society owes itself a duty and should possess it. Thank you.
Avaz Bayramov – professor
Dear colleagues and guests!
Usually when you start your speech you meet the problem of what sentence to begin with. It’s strange to say it but I resolved it at the last minutes. My colleague Prof. Nazim Imanov used such a phrase: what happens if economy goes in front of everything? Such an impression arose that if economy is wholly an independent creation from social nature. This is a spontaneous process that moves as it wants and in form that it wants. Actually, we know that the thing that we call an economic substance of a part of social life. Such interesting nuances appear from this. See, we economized everything related to social values, even democracy – we say economical democracy. But for justice we don’t say economical justice; we say social justice. It is clear that the main principles of the rules of joint co-existence of society are those with universal peculiarities. Since the neolith revolution till our times the world had only one high desire: to develop the human society on to the level where the human being is able to live as a human being. Unfortunately, the global scenery doesn’t demonstrate the fulfillment of this desire; it reflects how many problems, complications exist in this sphere. For example, I would like you to pay attention: In Europe at least 2 dollars is spent on a cow per day. But in Africa, in countries located below Sahara even 15 cent is not spent per a man. If we speak from the point of view of economical logics, then we should put aside all that is related to social and say that it is better to be a cow in Europe than a human being in Africa. Economist using the term of “social justice” usually they were corrected as this term is an ethic one; it is related to morality and economist is not able to adequately estimate it and explain its essence. We radically disagree with this point. Why? Five concepts (neither the “democratic justice” based on English utilitarianism nor liberal concept that accept absolute freedom, nor the “elite”, nor the “egalitarian” concepts relying on intellectual differences) related to definition of social justice in philosophy are able fully cover problems related to social justice. The biggest problem is the issue related to economy. Some minutes before respectful Vladimir Aleksandrovich asked if economy is an axiological or technical science. To put such a question in itself is problematic. There’s no need to prove scientifically that economy is an axiological science. It means that there’s no need for a guide for the mountain that is seen.
Economy can’t be erased with a primitive scheme; it is a science working with values. Economic factor is nothing but a value transferred from potential state into reality. Economic factor is different from that met in nature study; it is “charged” both theoretically and mentally. It means that in economic factor those that exist materially and morally are intentionally related and closely mutually tied. If we consider that the principle of causality isn’t the only one and it is free unlike the nature study, and at the beginning there stands the subjective factor then we should see the social justice as the backbone of a normal society building. It means that social justice can’t be viewed as criteria. Checking of existence of social justice is impossible due to verification principle by neo-positivists. It is not a creation that is paraphrased by the terms of “lie” and “truth”. Social justice is a measuring procedure for economical development. Its existence or on what level it exists is limited to the situation established in the society on the plane of social solidarity, social collaboration and national leadership. If such a powerful union is not established then, of course, it is impossible to hope even for short period existence but not for long term one; but if these values are in the society then we can talk about the existence of social justice. It is not indicated with quantity, it is not measured with concrete figures. It is impossible to define the social justice with income per capita, compensation of market demands or use limits of existed possibilities. Here we meet a situation of absolute paradoxes. To have good level of life circumstance doesn’t indicate the existence of social justice in the society. For example, let us imagine such a case: a capable young man wants to become an engineer, but due to extreme high education charges he can’t gain the university. He starts to work as a craftsman, graduates from a vocational school, and life circumstances is rather high in the society and as a craftsman he has good life circumstances. But is it correct to speak about the social justice for this young man? Of course not! If we take into account that a human being doesn’t exist only from material point of view, he/she doesn’t live with materiality; morality and callings are insight of a human being, in his/her nature, it’s impossible to put apart. On the other side, economy by its structure is characterized as isomorphs to the structure of non-economic spheres (social, political and cultural); it means structural equality principle works here; in this case it is incorrect to define the structural changes in economy with criteria evaluated without reviewing the reality from various levels of anthological view point and measured only with empiric level. It will take science of economy to completely erroneous way. Therefore we suggest having anthologized economic theory. Real levels of economical reality (levels different from anthological view point and levels that never coincide) should be considered. Without doubt we can say that idea is the start point for economical process.
Economy in fact is ideological construction. While analyzing the national economical system of any state it is possible to prove that the present structure of the system is isomorphs to the structure of that country’s national idea. It is not outside of it. If the state wishes to be independent, it lives independently; if the state wants to be dependent it lives as dependent country; if the state wants to be super state, ruling one, it becomes as a ruling state.
Thanks for your attention.
I work at the Academy of Sciences. The Chairman reminded that economy is the field that economists deal with. Too many questions are asked, if economists are involved into the economics of politics? If scientific methodology demands to transit from positive to normal this practice is practically recommendation. Even considering the economists’ theses that deal with investigating factors, they often go to shops and in reality they are involved into the drafting and implementing the economics of politics. This activity is the main one for economists. Here it was sounded that the first economists were doctors. Doctor is the same zoologist that specializes on human beings.
Reality of the life is the activity defining practical objectives. Here transition from neutral to positive science takes place.
By the way transition from positive to normative in scientific methodology is a practical recommendation.
What is competition? Situation with competition is better now in the countries where competition takes place in the correct manner: people pays more for the goods he gets more; the Government holds regulation of prices. Essence of other forms of competition increases. Furthermore there is title competition and competition of possession. There’re peculiar principles of the game. Advertisement is also used in competition. Definitely clear to take off the disparity between advertisement competitions from that what is in reality. In economics of politics it is needed to pay more attention to competition.
The text of verbatim report was provided by Azerbaijan State Economic UniversitySecond working section
Shahmar Movsumov (further Moderator)
Dear guests, dear forum’s participants, dear students. We are going to continue the next meeting of the today’s economic forum. There are many interesting participants. But before beginning of the speech the prince of Italy, Mr. Sforza Ruspoly has applied to us. He asked to apply to the participants. With your permission we would like to give him a word.
Sforza Ruspoly – prince of Italy
Sorry for my English. I’m not only grateful, but also I wanted to take part in this forum, also because I strongly feel all the attendance today, I guess to go around about this discussion. Now, I would like to express my wish for a better work in terms on a critic hope at the same time. First of all, I dream of a strong Europe, a unified body, a large continent on the Atlantic Ocean, on the West. While Europe made of one main constitution, one main economic policy, one stable and single currency related to such as gold and commodities. Finally, why Europe made such a political philosophy? I’d like to stress those times of crisis, the struggle against every kind of poverty and injustice. At this point I would like to stress like a times of critic it’s almost the only primitive suffer the most. Billions of people have forgotten by a system the use of paper money and trying to explore the planet and trample on the universal declaration of old times that was adopted by General Assembly on the 10-th of December,1948. Universal declaration was adopted in order to protect the freedom of all U&B. (see article number 1) and I also like to mention article number 25.
By 2020 while billion of people will suffer from hunger and food, half billion of people cannot afford their safety, Africa will suffer of emergency. Every year more than 20 million of people die from stagnation. This is planetary crime. To report energy today, it is our first priority, there no all the dates as important at this now. We are short feel responsible for this. Every continent has to reach the food self-sufficiency. So to implement they can dumpy of rich countries. There is of all point universal value of religion which represent the implement other countries.
Thank you. Now, the word is given to our guest from Russia.
Valery Tsvetkov – professor correspondent–member of the Russian Academy of Sciences, deputy director of the Market Problems Institute of the Russian Academy of Sciences
Thank you. First I would like to express my gratitude to the Forum organizers for their hospitality, warm attitude towards participants and wish success in our work and such meetings taking place more often to all of us. I would like to continue and develop the ideas of the previous orator. He talked about global problems which mankind faces today. Yes, today we are closely connected with economy whether we like it or not. Nowadays we witness capital transfer, transfer of labor recourses and manufactured goods of all countries and continents. But at the same time we witness lack of regulatory rules of these goods transfer. What have we got as a result? Crisis in 2007. Migrant capital cut from industry and used mostly for speculative purposes. Bubbles blow at the mortgage credit market then at the oil market and now at the food market.
Bubbles bursts, there is crisis and depression all over the world. If before the crisis of 2007 8000 million people in the world systematically underfed, after crisis this number reached already one billion.
Next manifestation of globalization is connected with increasing gap between wealthy and poor countries. Today not modern but backward technology goes to poor countries. The goal is to use both industrial and human raw material resources with preferences given to highly – developed countries. As a result poverty is not decreasing but on the contrary increasing. What is it leading to? Too mass flows of population shift from less wealthy countries to more wealthy ones. On the one hand what’s wrong with that? Undoubtedly it is progressive mixing of races, nationalities and cultures. But on the other hand interethnic problems arise. And if it continues so the world will encounter with global tension which will exactly develop on a national basis.
But besides global problems which global economy dictates there are those problems which existed earlier but as it seems to me are exacerbating now. And globalization is not the matter at all. For example rice in population on the planet which distributes on the earth more and more no uniformly. Thus of the last century population increased 4-fold. At the beginning of the 20th century it was 1, 5 billion people and at the beginning of this century it is already 6 billion people.
The second problem is violation of statistical development between population size and production volume of food.
The third problem is connected not only with exhausting natural resources (raw materials including) but also with their consuming extremely no uniformly. First of all I mean such resources as land and energy caries over last 50 years agricultural areas have reduced by 20 percent. They have reduced not for natural causes. Yes, there are a number of causes: building of cities, creation of megalopolis groups. Mankind might want to use these lands more rationally but land application of various chemicals for pest control has led to land damage. As a result arable lands (lands for agricultural purposes) are reducing. Now with regard to your water. At the moment consumed water supply is only 3% of all water resources. At the beginning of the century there was15000 cubic metersof portable water per person. In 2006 there was8000 cubic metersper person. As predicted by 2040 there will be left only4000 cubic meters. Along with that 15000 people die daily from consuming inferior water.
Now with regard to energy resources which are exhausting day by day. According to some projections oil extraction in Russia can be extended for about 20 years more. And what about Azerbaijan? What about other countries depending on oil? Some countries are dependent because they are producers; others on the contrary are simply consumers. The problem is lack of substitutes for energy nowadays. We have set hopes on industry but it hasn’t substituted coal oil or gas. It has become only a supplement. Certainly there are other ways of extraction of energy resources but all of them demand high material costs.
Other problem deals with raw materials. Raw materials are no uniformly distributed on the earth. It leads to big problems arising between consumers and produces on the issues of price setting, ownership and control over these raw materials. Problems of delivery and processing of this resource can also be added here. Taking into account the fact that resources are exhausting with time as I’ve already mentioned this problems will be increasing.
Thank you. Now, the word is given to our guest vice-president of the Jordan University, Bashir Al- Zubi.
Bashir Al-Zubi – Jordan University, Vice-rector on humanitarian issues
Thank you very much! First of all I would like to state thanks to United Europe for the well organized work and also I am very glad to participate here, in Baku. I’m going to speak about some points of the relationship between humanitarian aspects and economic development. As you know, there is difference between non-developed and developed counties and unfortunately some people mix these 2 terms. Whereas economic development is the policy of comprehension invisible with the aims of economical and social being of input. Economic growth is the phenomenon of market productivity and ISGP. This economic development refers to sustain efforts and community to promote the standard of living and economic activity in specific area. Such effort can involve multiply areas including development of human charity, create infrastructural, range of competitiveness, environmental sustainability, social culture, safety, freedom etc. The study of economic development was burnt out of extension and that forecast interactively on national protect of the agreement of goods and services. And also it was concerned in the extension of peoples’ instructiveness as resource provide us to live in industrialized countries, also there is a posing argument, although that economic development because some of them peace and income gets spend on economic development, such as education and health. In fact economic growth and human development has a main relationship. More often, the first chain consists of economic growth with human development when gross national product, specifically GNP, we need to increase an economic development by the government and other organizations in Europe. With the rise in economic growth in families, countries we like to increase expenditures when high incomes which develops needs to growth to demands. Why do we have economic growth or why we don’t have investment, because the lack of low income, low activity. Economic growth also generates additional resources that can be used in social services, such as self drinking water etc. By generating additional resources of social services unequal income distribution with range will not exist, such social services are distributed equally across each community individually. The relationship between human development and economic development can be explained in three ways:
1. Encreased salary income links to improvement of enhancement not as expansion economic growth.
2. It is believed that social outcome can only be improved by reducing income points as appropriate expansion of poverty reduction.
3. Social outcomes can also be improved with essential services such as education, health care of drinking water, not as expansion of social services. The use of community environment tools is also one of the main aspects of economic growth.
Job creations, economic output, an increase in taxable basis are the most common measurement tools. When considering measurement too much emphasize has been based on economical process of creating jobs. However, the reality is that economic development doesn’t typically create jobs, but facilitate the process for existing business and start ups the use of it. Participation in the development process, this requires relating framework of cyber – society institutions. It is necessary to support explore and ability to promote of human rights, democracy and tolerance, increase of cultural institutions. Encouraging the between civil society institution with the government is also of minor importance. Instructions and business that could be followed with interacting legislations the most important being legislative amendments shown in achieve, increase, protection and great up respect for human rights as stipulating international job, health communions. In addition, such principles shall reinforce social solidarity may care social security and insure general policy protect the family. In order to reduce poverty some affairs must be implemented:
One minute about what with our agenda in Jordan. We have developed national agenda for ten years from 2006-2015.It stands as an unique, inclusive approach than aims primarily to including the life of Jordan. Very sonly it became guaranteed base freedom as human rights and democratized and cultural political feudalism. It shares included the national agenda of asset mechanism to achieve the development of human and economical resources. Some of the most initiatives in agenda are restrictive recessional reinforce development plan and environmentally requirement. In addition , that supporting the set of development programs to financing insure, improving human resources and their capability. Thanks for attention!
Thank you. The theme of this round table is modern intellectual, potential and economic development. Mr well described in his speech which challenges wait us? A very difficult and hard development. At the same time, Mr. Bashir Al- Zubi spoked about the best economic development .
What do we mean when we say intellectual potential, I would like to begin from this. Until the twentieth century, the economists have shown the development as economic development, physical capital of production function of the working labor. In the twentieth century a new factor was created. Recently they have begun to talk about technological factor and human capital, as the human capital is the factor that stimulates the development of economy and greatly influences it. But today not everybody clearly knows about what human capital is. I would like Elkin Nurmammadov the cooperator of Azerbaijan Diplomatic Academy give some information about human capital. Here you are Mr. Elkin.
Thank you. I welcome reputable forum participants. This world wide important ceremony has a great importance in our country. The aim of my speech is first of all to speak about the role of human capital in economic theory, particularly in macroeconomics and microeconomics. Besides it I’d like set some questions. As you know, the core element of the research is to focus on the right question. Finding answers might be the second task. Human capital is people’s or employees’ attainment of certain skills, knowledge and abilities through teaching, education and work. Why labour capital? Because Human capital is more related with labour capital. Because labor capital is obtained through investment by people. The objective of investment to labor capital is to increase the efficiency of labour force. It means to achieve the use of more goods and services on the basis of the same labor force. The function of human capital is to increase the productivity of investment directed to human capital. I want to talk around the two aspects of research; microeconomics and macroeconomics. I mean why individuals invest in education? I want to answer to this question in advance. In order to increase the productivity macroeconomic theory started to reveal this question in 70th years. I mean the theory began to examine the relationship between people’s investment in education and its profitability. Obviously there is a fierce, stiff colligation. I mean there is a stiff, colligation between investment in education and its profit invested by people. Colligation doesn’t mean post hoc fallacy. The subject becomes quite hen and chicken. I wonder the reason why people’s profitability rises? Due to the reason that they have invested in education or having sufficiently high profit? It is very essential to reveal this economic thinking “post hoc fallacy”. This is a belief that when one event precedes another the first event is the cause of the second. This is very important to understand it and some researches are carried out in this direction. Researches show that if we add a year to the average school years it will bring about an increase of profit between 6-10%. Of course profit per capita and these figures might change depending on countries and period of time. But there is a common consensus in macroeconomics and of course some problems too. First of all, how to measure human capital? Regarding the statistics reports we might say that there is no any measurement for human capital. The researchers use some instruments in order to measure human capital. The instrument is just only average period. To tell the truth this is not an ideal instrument. Because first of all this indicates only quantity and might not indicate quality, which is quite possible. Second as I mentioned above there is a problem of post hoc fallacy, I mean cause-result problem. It means people want to invest in education more if there is sluggishness. Third there is a certain concept; it doesn’t mean that if I spend ten or eleven years at school my profit will increase, the cause is that a good education system is available. The cause is that either my parents pay more attention to education or my parents are highly educated and consequently they motivate and direct me. I mean there is something different here; individual profitability of education and publicly profitability of education. The question arises; should the government invest in education? The government should invest in education incase provided that the profitability of education in public is more than the individual profitability. Why? Because if individual profitability doesn’t regard the profitability in public it will bring about the optimal rate of investment in education. That is why in market economy the government should strengthen its role and should regard this margin. Fore example; somebody is studying, this is investment in education and the researches revealed by him might be very beneficial. These revealed researches are not only beneficial for himself but also beneficial for the society. This is valuable contribution to society’s knowledge basis and enriches it. Others also might benefit from this knowledge basis. Indirectly an individual’s investment in education doesn’t increase his own productivity, it also increases the productivity other labour force too. But his individual’s investment in education isn’t reflected in his personal disposable income and the government should pay attention to it, help him. Of course this margin between social profitability and personal profitability can’t be measured on the macroeconomic level. That is why this macroeconomics gives boost to researches that are on the governmental level, plan. As Mr. Shahmar mentioned that traditional development models, economic growth models serve the growth of the development of technology, production function, physical capital, labour force, their efficiency and so on. Long term increase doesn’t account for investment in physical capital. For example we are involved in gathering apple in Guba and we have labour force, who gathers crop. We have got physical capital too. We need ladders, because we have got some labour force. The first ladder might increase productivity, the second one also. But fifteenth ladder will not be so efficient. I mean physical capital and the law of diminishing marginal utility have much in common. But if we talk about human capital, the law of diminishing marginal utility isn’t so influential. I mean the addition of human capital into production function results in economic growth. This economic growth theory not only expands the definition of physical capital but also adds physical capital into human capital. It is enough to explain this economic growth as being long term. Besides it the expansion of society’s knowledge basis will have positive effection the another people too, not only individually. It might be beneficial as the followings; the expansion of knowledge basis, increase in the number of educated people, the highly educated people’s carrying out some social functions, the decrease of crime rate and so on. This concept is extreme, by-effect. By-effect concept gave a strong boost to the study of human capital. But this is macroeconomic theoretical knowledge. It is a pity that empirical tasks don’t give a boost to theoretical results so much. There are some debates too; if investment in education causes economic growth or not? May be vise verse. I want to focus on two questions. I want to answer them and then to continue the discussions. The first question is if the government should invest in education or the market should do that? Which of them should give the distribution mechanism of resources; market or the government first of all I tired to answer this question. If your social benefit is more than your personal disposable income in this case the government has a great role. The government should invest both in brainy people who have a great contribution to a technological development and in education. The second reason is more microeconomic level. I mean some people who invested in education will benefit from it in future. This future expected benefit is quite enough to cover present expenditures. But right now these people are unable to cover these costs; here the role of market is very important. It would be great if they could borrow from financial markets. In most cases the financial markets evade from it. The latest crises showed that the governmental interruption, investment is very important. The government should invest in education, but not unconsciously. The government should act as Venture Company, as there are business literatures. There should be differences between investments; efficient investments, inefficient investments. Investments should be made on more efficient investments. Which investments are characterized as efficient? Researches show that it depends on the financial position of the government. For example countries like America, being at the leading edge in technological sphere. The researches show that investments should be made in high education. It causes innovations. These countries develop at this expense. For example, investment in Peycil education. For example the doctor of science is in great demand in America than ordinary carpenter. But in technically less developed countries and developing countries human capital influence economic growth by the method of imitation. The different technology adaptation methods in developed countries in the west are the same as the development direction after the II World War, Asian tiger’s development ways. The developing countries invest primary education or secondary one. This is my second question. I want to read the last question too. How to invest in education if the country is rich with natural resources? The other forum participants would answer to this question. Thank you very much (applauds).
Thank you very much. The main important factor you mentioned is the physical capital with decreasing efficiency ratio between the physical capital and human capital, on the contrary, human capital is increasing, efficent.
Some questions were raised and I hope Emin Huseynov, Director General of the Central Bank of the Republic of Azerbaijan will answer them. Please.
Thank you. I also welcome the participants of the forum. I attach great importance to the work of the round table, the forum. A very interesting topic has been selected for today’s discussion. First of all, I would like to point out that in general, when reviewing the formation history of the economic development doctrines, when reviewing its stages, we see very clearly that while, let us say, in the 50s and 60s economic growth was promoted more as an aim, as a goal, in the following years the economic growth is not sufficient, and the other customers of the economic growth, that is, its other aspects were to be given priority. Among them are employment, inclusive step, human capital, fight against poverty, etc. Meanwhile, in the previous session the role of the institutions was dealth with, spoken about. All this shows once more that human social welfare, economic welfare is a very independent concept. And it would not be correct to express it only through humanitarian terms. And as I said, there is an inclusive growth, the growth reflecting wider aspects. I thank my colleague Erkin muallim who provided quite enough information about human capital. And the questions he raised, I think, are quite vital. I’ll try to give some possible answer to the last question. I would like to speak about the role of the human capital in economic development in the countries rich in resources. In general, it is known that Azerbaijan is a country rich in resources which was reemphasized here too. There are some choices, specific choices related to the development of human capital before the state policy in countries rich in resources. And a contradiction is generated here, especially in the state policy. On the one hand, oil resources, natural resources allow to provide the level of more income, after certain period the world practice of those countries show that there are more negative experiences than positive ones. That is, the incomes from these natural resources have more stimulating positive impact on economic development. It is connected with negative experiences rather than positive ones which as the main demand shows that more convenient incomes are gained through natural resources. And actually those incomes cause postponement of the need to create higher added values in other spheres of economy, to organize higher economic activity. As a result, more concentration takes place in the country. That is, economic vertification decreases and concentration, the concentration of some resource sector increases which, in its turn, causes the decrease in demand in human capital in other sectors and leads to, I would not say to the decrease in the need of the human capital in that sphere, but to the increase with speed less than the growth level of the country’s incomes. On the one hand, such kind of problem emerges, and on the other, if this sector develops in that country, in the country rich in oil, resources, it means the formation of more physical capital, the formation of more financial capital. And as it is obvious from economic theory, in the economy with increasing financial capital, physical capital, there must be need in human capital, higher human capital as well. For, the presence of money is not sufficient yet. There must be high human capital to be able to use it so that it has some result. So, there is a choice before the state. On the one hand, let us say, there is convenient income. On the other, the presence of that income necessiates the formation of additional human capital. In such case, no doubt, the state, different states react to this sphere in different ways. As I mentioned, the number of good experiences in the world practice is fewer than negative experiences. And now let us deal with human choices. Earlier Erkin muallim also mentioned it. In general, in a country rich in any resource because of the considerable increase in human welfare level within a short period of time people encounter choices where to aim their productive activity, where to invest. Whether to invest in education or let us say, in an alternative sphere. For, if any young person wants to develop, he/she thinks about his/her development choices, ‘Shall I apply for the University, shall I invest in higher education and spend some 5-6, sometimes 10 years on it. Consequently, I shall be trained as a wonderful specialist and benefit from it in the end. Or to follow this process is very challenging, it demands a long time, it demands long-time investment. Economy is developing already, there are wonderful opportunities already. I can get engaged in some entrepreneurship even now. And let me replace the incomes I can get in future from my education with the present incomes.’ And the youth facing such choices conducted a Gostpertive analysis. That is, they conducted an analysis of income and expenditure. It turned out that in countries rich in resources people are particularly more inclined to prefer the incomes to be gained at present time. Of course, this is, let us say, a dangerous tendency. And the states of the countries rich in resources should realize a policy providing the development of human capital despite all these tendencies. And in the end, I would like to say a few words about the processes going on in Azerbaijan, the related processes. In general, if we divide the economic development history of Azerbaijan into 3 stages (that is, what developed and what took part in the role of the source of economic growth, in the role of its driver), we’ll see very vividly that at the preliminary stage important experience, foreign direct investments entered the country in the frames of “The Contract of the Century” signed by our national leader’s initiative and with his political will-power. And this led the economic growth. That is, economy already stood on its feet. And it lived a long way of stability and development. Further, at the second stage, already with the utilization of Baku-Tbilisi-Ceyhan pipeline, oil incomes in great volumes began to enter Azerbaijan which leads the economic growth, economic development at the second stage. We are at the third stage already. That is, a global financial crisis has already taken place. Now we are suffering its consequences. Now there is a strategic question ahead. A country like Azerbaijan rich in oil has several features. What will be the new development history, what will constitute the main source of its economic growth in the long period confronting a country rich in oil, a country with moderate income and specific, social and cultural capital, that is, a country situated at the juncture of East and West, and reflecting the symbiose of different cultures. And in this connection our esteemed President Mr.Ilham Aliyev has already presented his strategic view today. As you know, a special state commission has been created to develop the national education strategy in Azerbaijan for the coming 10 years. Esteemed Shahmar muallim is also a member of the commission. This is the vivid example of the importance attached by the state to the human development, to the development of human capital. What is the goal? I’ll answer very briefly. The goal is that Azerbaijan is a very small country. Its internal market is small enough for it to gain economic development, the rapid economic development on the basis of internal demand. That is why, Azerbaijan must prefer a foreign-based development model more. However, in order to export, in other words, in order to be able to sell its product abroad, innovations are needed. High development force of human capital is needed. Hence such a strategic view is presented. I thank you all once more, and will answer those who have questions.
Thank you, Mr. Emin, The floor is given to Mr. Qabil Manafov, the professor of ASEU.
Thank you, dear forum participants, Ladies and Gentlemen, dear teachers and students.
My speech is directly devoted to the one of the main problems of the forum. I’m going to speak about the humanitarian aspects of entrepreneurship. The subject is chosen intentionally. First of all we live in the market economy system and the economic reforms are implemented in this direction. Market economy is an economy of free enterprise, and the problems of market economy system at the same time are the problems of entrepreneurship or vice versa. The second reason why I have chosen this subject and speak about it is the economic approach to the entrepreneurship as a profitable area from the economic point of view. Thus the changes and the realities of the last period prove that the benefit factor is not enough for the modern world. The modern requirements of the world demand new approaches and new views to the problem. We know that the systems preceding the market economy differed with their historical temporary characters; consequently, the one system can not be replaced by another. The conformity to the natural law of this substitution proves that the market economy system is a temporary system.
But last 20-25 years, particularly, during the global economic crisis the market economy has changed so much that this makes people wonder if the market economy system is out or new trends directions which hadn’t existed before and appeared nowadays, need to develop in the future.
The most important tendency among these directions is the formation of tandem between entrepreneur and government like the formation of contact, agreement, cooperation and social partnership. This exists in all models. The character of economic reforms and the results of economic opportunities show this. Social-oriented researches and reforms for developing the economy in the country demonstrate that there is a common consistency with law: state and entrepreneur. When speaking about entrepreneurship we have to mention that capital, that is, the entrepreurship and sociality turns into the main problem and the object of research. I speak about sole proprietorship not about state ownership. How must capital and social tendency, humanitarian aspects be expected in the modern world and in which direction it will be reflected in future? The second problem is that the entrepreneurship is an intellectual potential, human potential and human factor itself. If we speak about entrepreneurial and humanitarian aspects we have two approaches. The first is the development of education, health, IT fields and etc. And the second is that the entrepreneurship is not out of social system as humanism and human factor which is in the centre. They interact and serve each other. Entrepreneurship has a great role in the social support, social security, and social stability and in the formation of middle class in society. I want to mention that the middle class has a decisive role in the formation of entrepreneurship.
Who does the social structure of entrepreneurship consist of? Who has joined to this process? Who expects the result of his hard work from state and society? Economic model refleсts the nature of each country. In this regard our model does not distinguish from others. There is a general regularity but at the same time there are characteristic models for each country. The characteristic feature of our economic development model is the unity of the East and West. When speaking about social structures, social results, and social motive of entrepreneurship we need specific approach. For example, social motives of entrepreneurship are not only for ownership, and its employees working for enterprises. The famous Japanese businessman Tateti asks: (a manager can understand it more clearly)” When does an employee get motivation at the result of his work? First, he must enjoy his job and secondly, he must have an opportunity to earn more. Third, he must be involved into management of the company. Nevertheless, all above mentioned is not expected in modern economic systems and countries and this is only a theory. What is the owner’s motivation? The main motivation is profit. Must the entrepreneur rely on himself or government for getting profit? There is an aphorism: the more the owner is satisfied with the government the more he will be involved into the solution of state’s problems. I mean, if the owner’s legal ownership is not protected by the government, we are not able to speak about owner’s and his employees’ interest in humanitarian aspects.
Our guest on my left spoke a lot about empirical facts. It is natural, because it is impossible to go out of facts. I want to say it for our guest too. A lot of working places have been opened in the last 7-8 years, from 2003 to 2010 and about 650 thousand of them are permanent. Most of them are in entrepreneurship, especially, in private business. Another fact is that the natural allowed limit of unemployment is about 4% and theorists know this well. According to the latest facts today the unemployment level of economically active people in Azerbaijan is about 5,6 % so it does not exceed allowed standard.
I will summarize. I can speak a lot about it. I think the development of society and economy depends on supporting and realization entrepreneurs’ interests and development of entrepreneurship. Satiety of economy can bring about illness and we are able to find out the ways of its solution. For example, the development of economy creates some environmental problems and at the same time it can give us material opportunities for their solution. Then it will create consumer society and it will create consumer’s new models and life style. At last the human’s material existence determines his consciousness. There is a huge role of entrepreneurship in the formation of conscious human, the human who lives in developed society and the human following the rules. Consequently, nobody will throw a bottle out of the window of the car.
Thank you. We don’t have enough time, if anubody has a question, please ask. Here you are. Nothing is heard.
It’s known the theme of today’s forum is the human aspects of economical motives. Today Mr. Elkin had an interesting talk. He spoke about human capital and I think that human capital can totally be refered to the humanitarian aspects. I have a question to Mr. Elkin. But what can the state and non-governmental organizations do in order to eliminate the poverty. In addition I have another question if economy must be establish on the middle class? But nowadays the middle class in Azerbaijan has decresed a lot. There are strong sites and weak sites. Which strategy should the Azerbaijan government move forward for the developing of the middle class.
I can’t answer your question at all. It’s the problem of the state. But I couldn’t understand your first question. Will you repeat it?
Our first question is what must the state and non-governmental organizations do in order to eliminate the poverty?
I notes the formation of human capital from the point of general economy. Should we direct investment to this area or another ones. And when we say human capital it means investment. If I move forward invest here I can’t move to another site. Here the tension must be how Mr. Emin showed.
As I understood you put a question. When you talked about human capital you touched upon only one aspect of formulation of human capital. You spoke about education. By the way human capital is a wide idea. There is a medical issue, the health of humanity is a part of human capital. Of course all these aspects influence formulation of human capital. And the main subject is that we mean by saying human capital and globalization. Globalization – is the globalization of competition. Every year the companies in the frame of the country could complete among one another, but nowadays companies began to globalize in the international level. The competition of the countries complete with each others have already began. In this competition the countries have gained majority on the basic of human capital. The influence of physical capital is very little here. We can show it in a great plenty of examples. As we know a great program, attempt has been suggested by Mr. President. His suggestion has a magnifisant name. The project of changing black gold into human gold. And according to this project we shall try to gain the majority of international competion by human capital. Here you are, Mr.Gabil
I can’t answer to the first question. But I’ll try to answer the second one. Middle level, middle class. What’s this? This is the same , approximately has the same life style. There isn’t any serious difference in the level of income, may be at a scale. It is nearly the same class, layer, crowd among the people, owning the same production capacity. How is this section being formulated? How does the section create this class? Of course, let’s have a look at the developed countries. Assuming that the middle class and middle level was formulated. Totally crossing, there are distinct poor and rich people. But entirely the stability in the society is fixed on the shoulder of the middle class. At the same time the formation of the middle class, the way of development in Azerbaijan I can see in such way. The main factors of economic growth are the quantity and quality of natural resources. Allah has given all these resources to Azerbaijan. Nowadays the government of Azerbaijan uses these resources in the sufficient extent and with the considerebly efficient way. Thus, the main part of oil income is spent on the answering of future nations demands, other part on the infrustructure development of Azerbaijan population, significantly for the benefit of future generation. But selling oil resources and fuel resoursesare not the main targets. It’s a mean. Middle level, middle generation and middle class create the sphere of entrepreneurship. Non governmental’s sector is developing in the parallel order. Apparantly, if this non-govermental section serves to the development of education, health, economic development of the regions, improving social welfare in the districts has the target of parallel improvements, in conclusion it assures dynamic, sustainable policy and creation of middle, social rank of society. Thank you.
The text of verbatim report was provided by Azerbaijan State Economic UniversityThird working section
Shamsaddin Hajiyev – professor, rector of ASEU (further Moderator)
Dear forum participants! We have left only 50 minutes to the end. I wanted to speak more here, but it is a very pity that we have very little time that is why I must make my speech in different way. I ask from my colleagues to make their speech more briefly.
Certainly, discussion on the interesting topics before us cleared the actualization of the problem concerning humanitarian aspects of economic growth. At the same time we tried to find the answers to the questions such as, to understand the content of the positive processes in the world and also in Azerbaijan with researching the negative and positive features of humanitarian aspects, as well as to realize the prediction of challenges in this sphere in the future and where the economic growth is leading the world, how the global problems and indefinites will be solved etc. The basic subject of under the discussion of our third round table is the problem of defining the social measures of economic growth, economic model. The problematic situations in the methodology of economic science complicate the real sight. Can the human factor stand in the centre of economic process today? We are going to find the answers to the questions like, does the economy give the opportunity to provide with the normal living standards and how this matter was interpreted in the process of historical evolution of economic development models and which position the humanitarian aspect holds in the available economic theory construction, etc. I consider that if we find the answers to these questions we can proudly say that we‘ll have achieved the solution of the problems under discussion. Very strict and more controversial problems were raised in previous speeches, too. It’s enough natural. Therefore, there are not important scientific works and researches related to the humanitarian aspects of economic growth models. So, there have not been any acceptable axiomatic provisions there, yet. Any rational settlement is observed neither in theoretical-methodological, nor in extreme remote approach struggle concerning its essence and content. I can express with surprise that we, economists have not understood the essence and content of the term- economy, yet and we don’t make any attempt to understand it. Therefore, when approach on the other side I accept quite naturally rising such polemic. Because, the world is changing very quickly, we have already passed the first decade of the XXI century; we have stepped to the knowledge society. We are speaking about the postmodern society, and here both economic subjects and also economic theories are quite transforming and changing. Including, the role of the society in the economy must be viewed in the quite new recurs. I consider this approach quite objectively from this point of view. As, the changes encircle the whole society life. But one thing I also realize that the economy takes the basic and main part of the social life, and also in close relationship with the social sphere. The economic progress can affect the process in different spheres both positive and negative influence. At the same time, human’s development, the formations of human capital are in the basic row that affects the economic development at result and it must be accepted in this way.
Today we must speak about economic growth model of Azerbaijan and cause to swell the social aspects of this model more and more. It sometimes seems to participants who made speeches that speedy development of Azerbaijan was gained easily; that it was connected with oil; that any country with this natural resource could successfully utilize it and could raise its economy and social welfare as well. Actually it is wrong, the world experience shows that the base of the economic growth is not the existence of hydrocarbon resources but the conception of considerable utilization of them. But it is enough to remember these countries which are much wealthier in oil than Azerbaijan, and intrigues in these countries which the economy depends on oil. But today the probability of happening of the spoken intrigues in Azerbaijan is equal to zero. Therefore there is an economic policy with deliberate intend and at the same time the economic growth model based on the synthesis of the liberal values with optimal interference of the state and institutional system. We have made our market economy, but it is absolutely different from the traditional classic models. Market economy towards social development- it has been formed as a system which occurs maximum opportunities for the free and liberal activity of entrepreneurship and minimum interference of the state.
But it does not mean that we have no problems in our development especially in solving humanitarian issues, in humanitarian spheres. We have them; there is also substantiated economic growth strategy towards permanent targets. I can cognize something exactly that whatever we charge to the notion named the process of economy there is a human factor at the beginning and the end of it. Today the human factor is not exogenous in economic process, i. e it does not act as an external factor. It is inside of the process- endogen. Economic process must be perceived only in this sense. The theory should accept that human stands in the beginning, in the centre and at the end of the economic process. Maybe you think that I speak of the ideal society. But as there is no ideal state and also there is no ideal society and ideal economic growth.
Taking into account the extreme situation that Azerbaijan fell in early 1990s, i. e economic default, occupation of 20% of our lands by Armenians and the condition of existing more than 1 million refugees and economic prosperity gained for a short period of time show that Azerbaijan government take all existing opportunities and today Azerbaijan is the leader of Southern Caucasus in the real sense of the word. 75- 80% of existing economic force in Southern Caucasus belongs to Azerbaijan. Azerbaijan economy has increased for the last 7 years three times. The main macro- economic growth has repeatedly increased; the level of poverty has lowered to 9% from 49%; more than 900 thousands of workplaces have been opened and etc. Unconditionally, the main role in attaining this growth plays natural resources, especially rational utilization of oil factor.
I want to turn your attention back to 1990s. These times the level of oil production of Azerbaijan has lowered to minimum. About 9 million tons of oil had been produced and it even could not meet our internal demands. Opportunities for extending output were scarce, inland resources had come to end. To produce oil from sea required a lot of financial resources and at the same time technology. Naturally these opportunities were of zero extend. Just after signing the “Century’s Contract” and adopting oil strategy absolutely different situation arose in Azerbaijan. Till 1995s a dollar of foreign investment had not been invested to Azerbaijan economy. Since then till now more than 80 billion investments had put to Azerbaijan. My aim to enumerate these factors is to draw your attention into Azerbaijan way of growth. Of course, in theoretical and methodological essence we had not invented the America. But in utilization and administration of existing opportunities regulation and state interference, systemized and program- objected approach we may be have made revolutionary changes. The different character of our model is a service to human, increasing of human welfare, forming of human capital. Therefore, without this capital resources can exhaust, and we can even not speak about the future of the country. Only these countries overcome the struggle of competition where there are intellectual people, where human growth is of high level and human capital is always in increase. We perceive this very well and direct all resources this way. More than 60 State programs that are successfully realized and adopted in the country based on program- objected approach can be an obvious approval of the spoken. That is all for now, thank you for your attention, good bye!
Flow is given to the doctor of Economy Professor Mahish Ahmadov. Please.
Mahish Ahmadov – professor
The global financial crisis, national, regional and international economies by strengthening mutual depending, the world of international, as well as socio-economic development level of each national economy paradigm, nature-society relations and to ensure harmony and understanding the principles and criteria re-attention to the development of the modern world made it the main problem. When demands increase steadily, and recourses become scarce, each unit of production factors and economic growth, which getting a result of resource consumption plays an important role in ensuring sustainable development. For this reason, taking into consideration the interests of the present and future generations, economic growth in the formation of a qualitatively new type of modern development in the transition period to ensure a regular basis of the national economy is the main direction.
First of all, in each country, the national economy requires ensuring sustainable progress, preparation of the conceptual basis of the national economic development strategy and implementation of a practical point of view. The degree of social and human factors which affect the sustainability of the economic system, if is not taken into consideration in the economic policy by the government, it may affect the speed and quality of economic development.
Sometimes the market mechanism can not make the right solution in governing human and social problems in terms of interest of present and future generations, ensuring of the fair allocation of revenues and in general socio-economic, demographic, humanitarian and environmental issues, in the case the government must intervene this process actively.
In general, by solving socio-economic, environmental and humanitarian issues, the sustainable development solves meeting necessary requirements of the people, and problems living standards of present and future generations. However, in different countries the socio-economic and environmental, human development are regulated and managed by different principles by the state, they should be solved in the unity form.
Sustainable development of any specific example of a country is required to implement a practical point of view, the logical sequence, a systematic analysis of the level of development of the national economy, the definition of objectives, the existing economic relations of the system how to respond to national interests, and finally, the regulation of the forms, methods, scope and means of assessment.
In a globalizing world each country should solve the four problems, for ensuring the model of the sustainable development.
First, to take steps for resolving the ecological crisis as a result of development of the global economy.
Second, to carry out the necessary socio-economic programs for providing sustainable human development.
Third, corresponding political forms should be carried out for solving the demographic problems in different countries of the modern period.
Fourth, the economic problem should be solved for ensuring the sustainable development, because, as a result of environmental, social, demographic, and economic problems depend on the level and type of economic development.
Generally, the implementation of the concept of sustainable progress depends on potential permanent of the country. Each country has got the objective and subjective economic permanent potential. This potential should include the following: and the resources of the national economy, the efficiency of economic activity, the institutional structure of the managing demands and reacting for changing foreign economy. However, sustainability potential is determined by entire advantages of the country, by means implementation of right, optimal, flexible economic policy, the state can increase this potential to govern global, regional, national interests and by expecting optimal levels of the solution of optimal and current issues. Allocation of potential resources in the available opportunities should be considered such the optimal that, both they can meet today’s socio-economic of society requirement well, and they don’t eliminate the finance for meeting these needs.
When we look at the sustainable development as a economic aspect, then we should note as the following:
While preparing the concept of sustainable development of these four problems, the factors of civilization, economic thinking style and effective economic policy should be taken into consideration.
In general, we can make a system the main objectives of the sustainable development as the following:
– Forming a new paradigm in accordance with the changing conditions and demand of the economic, social, political, cultural and environmental development.
– More rational approaching associated with improving short-term development providing long-term costs.
– Effective using of the planet’s natural resources .
– Make balance among development rates of economy, social, cultural and ecological balance.
– Development of relevant sectors and subjects in national, regional, local and global level.
Security of each country’s national economy is related with strengthening of the humanitarian aspect of economic development.
Protection of the economic security is expressed as independence and stability of national economy, coordinating current and long-term goals and objectives, providing of dynamic and sustainable development, its constantly refresh, self-development. In other words, in the modern world, the main purpose of the ensuring the economic security is to solve according to the requirements of sustainable development using of the labor, capital, natural resources, efficient and optimal, ensuring efficiency activity of the state, citizen, market and arising contradiction among them.
Eventually, providing of economic security should be based on the condition all of the measures and changes.
The concept of economic security should include the mechanism of the protection and realization of national interests, ensuring the ability of the national ownership, production development and socio-economic stability in the society. It should be noted that, it is impossible to achieve vital and sustainable development of the national economy without providing the sustainable human development, without economic and social development to achieve new associations, and without formation intellectual potential. In general, analysis the sustainability of the national economy shows that, countries that can adapt the requirements and conditions, they reach sustainable development.
National security conception of the country is related to the provision of external and internal security in the main activity fields of the society and state.
It is known that without solving the problems of the sustainable social development, is it impossible to provide neither the economic development, nor the safety for long-term in the modern world.
Therefore, evaluating the security of the national economy should be used special social indicators.
The world experience shows that not taking account the economic guarantee of the national economy by the economic policy of the government can be suspicious for the independence and stable growth of our country, especially for its economic guarantee. Analysis shows that to attain appropriate achievements in economic guarantee requires putting into practice adequate measures against the internal and external dangers according to some directions such as to bring to light internal and external dangers concerning all interests of society from the life standpoint; to forecast them and to establish necessary information base monitoring the processes in economy; to prevent the possible negative results affecting economic interests , to realize long- term complex measures according to abolishing them and evaluate their results; to combine the problems arose of the scarcity of resources, global rivalry and dynamic changes in the world economy.
Within that end in view socio- economic inequality in society should be regulated so that consequently it could stimulate economic growth. At the same time the important term for intensifying humanitarian aspects of the economic growth is in close tie with the interests of the future generation in the national resources and observing their rights and benefits concerning to this.
Thus humanitarian aspect of the stable economic growth requires observing the direct ties between economic growth and social solidarity.
As a result stable economic growth requires improving moral and ethic views of the people. In other words to provide the humanitarian aspect of the stable economic growth is impossible without improving human qualities. Global financial crisis showed that for the expecting of future generations’ interest, for the social, economic, moral problems it is impossible to gain sustainable development without active and significant regulation policy by state.
State’s function is not only to solve societies’ economic, social, ecological and moral problems, but also to create situations for the formation of new wealth for the society.
So, sustainable development requires creation of such social-economic system that, not only its qualitative level (the real increase of the profit), but also the provision of human development – improvement of people’s education and scientific level, medicine, cultural development and so on.
In this content, indeed, the provision of sustainable development causes the humanitarian character of economic development.
It’s understandable, the first term for the provision of humanitarian aspects is high economic growth, having enough potential resources, but finally, the solution of this problem depends on the chosen regulation model by the state.
For the solution of humanitarian problems, the usage right of every person’s salary, education, science and medicine, cultural development and mainly for the realizing every person’s potential, durable life form requires taking into consideration minimum important terms. The humanitarian aspect of sustainable development creates human’s life quality problem, mainly. For the qualitative life conditions, first of all, humans’ basis requirements must be met fairly. The important formation of every demand in every concrete level is very important. And this one in its own place:
Increasing of people’s life level in the result of output and profit
In the solution of these problems, it is very important to consider the historical traditions of national mentality social-cultural features. The strengthening of the humanitarian aspects of economic development is not the purpose in its own place. At the same time, it is the necessary and important term for significant realization and improvement of social, investment, innovation and ownership condition in the country. Not dependent on the character of the social-economic system and development model, do stable live principals done at every level and provide humans’ potential development, at the same time have an opportunity to take an active part in adopting laws relating humans’ life.
During the realization of economy policy by state, the balance of economic, social, humanitarian development must be considered. One of the main geopolitical indicators of Azerbaijan is rich human resources, permanent internal public policy, national-ethnic and religious situation and the activity of regulation of them.
The successful result of economic model applied in any countries illustrates in the indicators the characterizing of human development, social welfare of the citizens and in country’s macro economic development indicators.
UN uses 4 united groups for characterizing sustainable development level (economic, social, environmental and institutional), also uses the indicators in private indices system. Today, as a rule, many countries value the sustainable development concept on the basis of these indicators’ dynamic.
According to the human development index Azerbaijan has gained high results recently. On the basis of this index, the position of our republic is increased among the world countries.
Much important progress was gained in different areas, including the deepening of the social policy, the provision of market economy, organizing of continuous meeting for the sake of citizens’ protection, the development of the independency of the word and sentence, the broadening of the democratic reforms in a systematic form, the protection of human rights and freedom in Azerbaijan. All these factors affected very much in improvement of the indices of human development.
Recently, in our post-soviet country, such opinion is being stressed that the country can be considered as a juridical and significant state when it takes more care of its people, separates more money from the budget for the use of social purposes etc. It’s true; such approach must be considered with satisfaction during the initial access to the market system and during the indefinite economy condition. But, we guess, as our country has passed transition period, it is seen the criterion and paradigm must be changed in near future. As, that country can be considered as an important state where the number of people in need will reduce.
In the alteration of 12-th article of our constitution is noted:
“Azerbaijan Republic’s superior aim is to provide suitable life level for its citizens.” Also, the alteration in 15-th item consists of providing social economy”.
It is impossible to gain sustainable development of national economy without realizing the national interests in social area significantly. So, not providing national interests in economic development reduces peoples’ interest in economic development after some period. Therefore, the sequence of global policy with national interest becomes an important term of providing sustainable development.
For evaluating the development of social area we need the quantity of poverty, non-equaling of profits, China’s index, the level of unemployment, average monthly salary, the level of teenagers’ knowledge, increase tempt of the people etc.
Many times the dynamic of any or some indicators don’t give an opportunity to characterize the general position of economy. Because, every country has its own economic – social, political realities and peculiarities. Therefore, the acceptable indicators dynamic for any country cannot be satisfied with any other country.
On the other side, the method for defining the safety of economy and sustainable development, indices system and statistic data’s working rule differ from one-another.
So, provision of sustainable development of national economy is defined by the number of different indices and criterions. Therefore, during the evaluating of the real level of sustainable development in any country, beside the noted above, the realization of the current and perspective national purpose, and how much it meets the requirement must be taken into consideration.
Today, the use of resources, especially the significant use of energy resources is becoming humanitarian side of the global world economy. As, the significant use of energy resources gives an opportunity with the fixed term on the one hand, on the other hand it improves humans’ health by affecting positively to the ecological balance. From this point of view, Azerbaijan gives present to the strengthening of the humanitarian aspect of economy growth by penetrating intensively to the world market with its oil and gas.
The level and dynamic of the indicators below show in oral form the social direction of economic development and the strengthening of humanitarian direction in our country, recently.
As, state budget increased 5,5 times during 2005-2010 years, 16 times during 2000-2010 years. Including, the expenses of state budget increased 15,3 times during 2000-2010, 5,5 times during 2005-2010, social expenses 7,6 times during 2000-2010, 3,5 times during 2005-2010 years. Culture, art, information expenses increased 8,1 times during 2000-2010, 3,2 times during 2005-2010,social-security cost 10,6 times during 2000-2010, 5,1 times during 2005-2010 years.
The level of poverty was 49% in 2001, 40,2 % in 2004, 29,3% in 2005, 9,1% in 2010.
Last 20 years, the real profit of people increased 2,4 times, 8,2 times in difference with 1995 and it was about 2,866,0 manat in the end of 2010 per person.
The average salary increased 26,5 times during 1995-2010, reached 331,5 manat.
During 2004-2010 years 913 000 new, including, 655 000 permanent work places were opened.
The success gained by Azerbaijan in recent years in economic development dynamic find itself in ratings and in economic statements of international organizations for our country.
Azerbaijan rose 18 steps to the 51-th place among 133 countries with “Global Competitive Statement” in the World Economic Forum, in 2009-2010, but among ISU countries to the 1-st place. Azerbaijan got the first place among the 183 countries in the rating with working out of the significant condition for the ownership activity. According to the indicators of the World Bank “Doing Business Program”, Azerbaijan got the 33-th place for its economic indicators business condition, also it was declared as the 1 number reformist country in the world.
The flow is given to Alexander Nekipelov, (academic) ,vice president of Russia Scientific Academy
Alexander Nekipelov – academician, Russian Academy of Sciences.
Thank you, Professor!
I would like with your permission to theorize on the issue, which is designated as the name of our section now.
You know, very often, including quite prescriptive works, the economic field is regarded as one of the spheres of society, along with the cultural and political sphere. And generally speaking, it is very convenient. Of course, we all know that there are certain links between the different spheres of the society.
No development of culture would be possible, if there wouldn’t be allocated adequate finance funds, on the other hand the level of culture, the nature of its development, the nature of the values of people living in a particular country in a given region, undoubtedly have an impact on economic development. These are facts which are well known to all of us.
But this approach in a market economy is often regarded as something identical to economy in general, in covers the whole economy.
We could say, the state and the welfare of section in the microeconomics, the values are given, but in terms of the normative functional of the economy. Equilibrium price is regarded as both, a very public, and I stress, a social responsibility, and at the same time as the marginal social costs. Equating one to another, their simultaneous equality to the price is the characteristic of the fact that the social optimum is achieved, while the social optimum is seen at an angle of the section of microeconomics. It is also viewed more as the situation that provides for specific rules a kind of interests’ agreement of all economic players.
Another approach is applied to macroeconomics. Incidentally, this is sense qualified, a little bit different. If microeconomics is more like a science, which is based on the axiomatic basis (given by a number of hypotheses, axioms, and certain conclusions are made by the logical way), then, macroeconomics is somewhat different in its character, though considered an integral part of the economic theory.
Moreover, there are two sciences methodological inconsistencies. For example, in microeconomics there operates a postulate of the fundamental incomparability of the satisfaction level of the individual utility and welfare. We can not say that Ivanov is a happier person than Petrov, even if Ivanov has much more income and a plenty of other things that we tend to identify with the public welfare. Macroeconomics aggregates a complex vector reality and turns it into a scalar. Gross domestic product has the three well-known methods of determining it, and one of them – is the addition of income.
The addition of income – that is what forbids to make microeconomics, it does not prevent, of course, proceeds to add, but it prohibits, on this basis to draw conclusions about the level of welfare. And macroeconomics does exactly that. It is clear that the macroeconomy, acts like that, it’s a much more realistic formulation of the problem, closer to a decision, and I do not call tomorrow to abandon macroeconomic research, but I just want to point out that this is a bit different science. It is closer to the practice of making a decision, but it can not stand all those axioms, which are incorporated in a microeconomic theory. But, above all, there exists the impression that the model of a market economy – is in general a modern model that describes the objective reality of not having any in the regulatory component.
In fact, it is not so. Even if we consider a model based on the economic man, the person-oriented on meeting (in the narrow sense of understanding) of his own needs, and here, within the model itself presents a regulatory component. The normative component lies in the fact that we postulate certain things, like, here in this model, it can function only when people respect each other’s property. If people do not respect the property rights of others and prefer using violence to solve problems on the distribution of the product, then it is not a market economy. It can not act under these conditions, that is, in this concept, where all people are treated as economic people in a sense, as argued by Adam Smith, it is already there, in this simple concept there is a normal component. But the problem lies in the fact that we all know well that actually we are not economic people to a greater or lesser degree. That is, each of us is interested in the level of prosperity, it is very interesting to us. But in addition, there are lots of other things that interest us. We are interested in income distribution.
Thus, at the plenary session, Professor Berlis talked about the limited demonstration of the gross domestic product. He said that its volume by itself says nothing about unemployment, which has a place in the society. We are interested in social sides, absolute social parts of our reality. In this regard I would like to offer you such an interpretation. An integral part of the economic process is a normative part. Without it, to understand it is simply impossible. And since this normative part, is not simply the concept of an economic man, the utility function of each of us is added to it. In addition to a set of benefits and services that we would still like to use, there are some arguments that describe the state of the society sphere from this or that side, so the market economy is a key essential part of the economy in general, but do not fully describe it.
We are often somewhat too far, when talking about the state intervention in the economic process. We regard the state as the part of the political system, as it were in one area, which, are for various reasons known to all, and is entered the economic process. The state interferes in the economic process, just because we may be dissatisfied with the results that have an effect of the market mechanism. This is in some sense also is a market failure, the market failure to take into account that part of the utility function, which is not reducible to individual utility and that is not limited to our personal consumption.
This is not to draw any conclusions as to what should be the state – large or small, what issues should be solved on a purely market-based ground, where you need government intervention. But this implies that the real society – is a unified whole. Separate, albeit interacting with each other parts, characterize this society. There are different views from different angles on the same society: economic, cultural, political, etc.
Many of the issues that we traditionally try to bring out of the scope of the economic theory, in fact, can and should be considered.
I, with great pleasure give the flow to Nizami Mammadov.
Nizami Mammadov – the director of Globalization and Development Institute of the International Independent University Ecological and Politological Academy
Thank you very much!
We discuss with you a very fundamental issue on the merits, which are issued by such organizations as UNESCO, the United Nations to the forefront. And I would like to draw your attention to some problems. For example, the problem of humanism and humanization and the problem of culture are now at the forefront of the scientific and economic development. But if we are just used to live in an everyday life, without much thinking about the fact that human history is, in essence, the history of wars. And now in the world there exists the violence, wars, etc. And this is what we always say that our society is on the way of the wisdom and the financial sector, and yet the issue remains fundamental, yet unsolved. It’s coincidence that UNESCO now puts forward the idea of a new humanism. I shall then return to this idea.
The second problem, which I would like to draw special attention is the problem of the fundamental differences between the characteristics of the south and the north. Certainly, they prevent the implementation of the concept, which was adopted at the end of the XX century – the concept of the sustainable development, because we can not say of any sustainable development. On one hand, there are conflict and wars in the world. On the other hand, there exists economic differentiation. And that’s why these problems have always been under scrutiny. The fundamental nature of these problems is in the fact that it brings us to the problem of a human factor. We really do not know who we are. And yet we can not figure out why there is such a balance – the instinct of aggression and the instinct of reason in human nature. These questions, of course, can be investigated using genetics and psychoanalysis.
The studies of the Swiss psychologist Jung give us an opportunity to understand the motives of our behavior. And consequently, it is here that the problem that we are discussing now closes. On the one hand, the problem of humanity, on the other hand the problem of cultural characteristics. Thus, learning the nature of the man we find the key to the difference of various cultures that are different in ethnicity. Due to lack of time, unfortunately I am unable to fully disclose the problem. But this requires the use of interactive methods. Continuing the idea of the influence of culture on the economy, it would be appropriate to recall the concept of the historical process of Marx, who very logically tried to justify this historical process, based on the category of needs. In the category of needs, in fact, he did not go far, because all human needs cause not only a sense of satisfaction, but also create a new need. If he had immersed himself in the thought I assure you, he would not have written “Capital”, because this problem would lead him towards the comprehension of human nature. Nevertheless, he took it as an axiom on this basis, and called it the law of increasing needs, and on this basis he created the concept of a historical process. Further, in the late XIX-early XX centuries Max Weber quite thoroughly uncovered this relationship between culture and needs. In his famous work “The Protestant Ethic and the Spirit of Capitalism” Max Weber showed how capitalist relations unfolded, specifically on the basis of the Protestant religion. And today, taking as a basis the idea of Max Weber, one can see and understand the differences in the economy of multinational economic model. Through this we try to understand the nature of the phenomenon of the Japanese economy. It’s just directly related to the fact that makes it possible to realize the rise the Chinese economy.
Of course, we must not lose sight of those value systems that dominate in the society (for example, Buddhism in China, Confucianism, Shintoism in Japan). All this must be taken into account when we try to understand the American economic model, the multiculturalism plays an important role in the country. In this regard, I would like to draw your attention to a very interesting work of the American philosopher and political scientist Fakuyama, who substantiated the concept of the social capital. Today we were talking much about human capital, but also do not forget about such a concept as the social capital. Here we are talking about the cultural foundations of the society, the cultural systems and values of the society.
If the social capital is high, then it (as it was in case of America) will inevitably lead to the social partnership. Thus, we can say that any complex problem can be solved on the basis of a social partnership.
Summing up my thoughts, I tried to open a logical connection between cultural needs. I come to the conclusion that social development, in effect, and all will agree with me, is based on the needs, at the level of technology, science and culture. But if we begin with you to find out the nature of needs, we can see that their level depends on the level of culture. Equally, it is applied to the development of engineering and technology. Everything in our life depends on the level of culture, it is a concentrated system of value attitudes of the society.Thank you for your attention.
Thank you very much.We have very little time, therefore I suggest to change our reglament. I ask you to satisfy with 5 minutes. I give the flow to professor. Rasim Hasanov, the director of Research Institute of Azerbaijan State University of Economics.(Applauds)
Rasim Hasanov – professor
The social or humanitarian aspects of sustainable development.
Respectable forum participants and valuable quests! Firstly, I’d like to involve participants’ attention to the headline of the economic section. We guess that the such naming must disturb the economists.As, the main point of economy is social ,therefore it has humanitarian content. But now,as if we want to give again humanitarian essence to the economy. I guess at the same time that the culprits of the creation of such conditions are the economists themselves. The current situation that was created from classic into the neoclassic economy is one of undesirable results ,by the group of scientists who have the real paces in economic thought history,but who are agitated in modern manuals and their attempts of transforming economy to the tecnical-nature science, in other words to the science with quantity character in which all categories and motions could be measured and forecasted. But I consider, to value the role of the social- humanitarian aspects of sustainable development again, the present “recognition” of the economy characterized as humanitarian science, it is suitable time to benefit the logic “It is possible to make fit for every crisis” by famous american scientist Hersman. Therefore, for the formation of the social aspects of sustainable development I’d like to look through the following thesis:
Now the consider that the development of the social balance is supported in some cases. As, it is connected with the growth of human capital welth. Now, the idea – the human capital is the main factor of the development, is spreading. From this point of view, the most effective development factor – is considered “the education level”, not “ the economy and investment” as it was considered those times when the physical capital was very important.
So,we guess that stable development, its special situations or providing sustainability and balance of the development, is very important and actual.
The flow is given to Halil Akinci, secretary general of the Cooperation Counsill of turkish-languaged countries. Please,Applausements.
Thank you Mr. Rector. If you let me I wish to continue in English. Turkish is not as comprehensive as the English language. Catch words of today’s are globalization and free market economy. Now how does this terminology translate into Newman language? Free movement of capital and goods but not of labor. Open up market economy, I would consider opened of mine. Have we a ration PV of labor? Computing to produce, but what we have produced, best. What we have lost as raw materials. Make many out of money, import and spent our money in next years even states against making money out of money. Now our presentation is limited to 5 minutes. I will be or may be I will try to be brief than 5 minutes. May be it’s given some rule for discussion. And diminish roles of state rather forget about social state. Now, what are the results of this translation? Addition to one profit economy, we were talking about coffee or cacao something like culture project, now we are talking about petroleum. Now, if you produce, what you have produce best than you sent your point there on the other hand, there is a contradiction, because industrialization. It will be effective if you want to improve the terms of the trade. I remembered one ex-soviet republic which is independent more selling its petroleum at 2 dollars and total is 400 per ton. While price of this was in the market 10 or 15 times more. Now they are making their own textile industry and they are selling the products of their textile industry in the world price, export everywhere. And we talked about earlier about organization and if you don’t industrialize you cannot provide world for the rural population than migrating to earn centers. Again another result of this translation collapse of socialist states, globalization of medical services, people are facing less access to get these services. Maybe, some people have more access, but most of population receiving less access and less qualified medical services. Education is being vital in many countries where it is administrated by states. Now it is fetching that, you send your children to private school because the state schools are no longer provide. The same level of education is not same as before. Another example of discussion we cannot fair units, everywhere before when you handle sky for your own bright, and then the government would collapse, because the economy is interdict. If one economy is bankrupted, or also collapsed, the other economy will be affected. So, all the stages gather their strength together to confront those people who are asking for their own bright. How are we going to deal with these things? Of course, every country will have their own solution because of condition scales. About globalization global economy intereconomy, the economical characteristics of each country are different and then the same medicine cannot be administered to all the countries. So, they would find the way out. One way out is happening in some countries returning to the social state but with this government spending, regulating taxation system because this globalization and market economy resulted in dividing your gap with your income. Even a fully capitalized country or perfect capital country let’s if we go back 50 years their distribution income is fairer than before. So again even in a bigger Latin America are calling for more taxation of higher in categorize of the board slowly, policies are changing. I don’t want to say that globalization is bad, of course globalization reserved the recommendation of production and marketing free bullion of capital as contribute to development of certain countries. But, maybe it is the best for some countries to return net product material as the measurement of national income rather than GMP. And they will see the real benefits of economic development. Thank you, I haven’t exceeded my time.
Thank you very much, We are very grateful to you. Now, with great pleasure I give the flow to Andrei Yermolayev, the director of the Strategic Research Institute near the Ukraine presidency. Applausement.
Andrey Ermolaev – director of Strategic-Research Institute at the President of the Ukraine, Professor.
Thank you very much!
Given the brevity of time, I will speak briefly. I am grateful to the colleagues for the placement of correct accents, connected with the problems of culture. Due to limited time, with your permission, I will use prompters – my lecture in Kiev.
First of all, I want to say that in the discussions with economists, the representatives of the Government, I repeat the same phrase: “Stop chopping things and money, learn how to influence the meaning and value, otherwise the existing theoretical classifications, related to the management of the economic spectrum of human activity will not help you. This is the feature and the specifics of time. In my opinion, if we are talking about a place in the economic activity, then you need to talk about culture in general. In my opinion, culture in the broadest sense – is the way of maintaining a social heredity on the basis of the updated experience of the practical human activity, its value-normative reproduction in the daily practice. In this sense, culture is the notion of an ideal-material issue.
It includes the traditions, myths, religion, science and art in various forms. All of this enriches and develops culture. Culture is, thus, viewed as a product of the activity itself and the self-awareness of the society. In this sense, economic is a part of activity.
Very interesting but unfortunately, students known the Russian explorer and philosopher Petrov a little, identifies three compositions of culture: communication (direct exchange coupling), transmission (power transmission and transmutation), an update. Traditional in old-industrial society, the transmutation process of culture was sufficient to transfer the experience of the generations.
It provided a unique internal stability of community culture, promoted diversity on the basis of civilized manifestations of unique cultures in the process of making various decisions in the development of activities and social rights. It’s no secret that the modern world in the last decade has qualitatively changed. Changed the dynamics of transmutation process. Destroyed the traditional local mechanism. The cultural mix covers all areas of activity: production, technology, organization of mono-transmissions art.
Everything has changed and we are changing together with the world. Today, our nations are not directly connected with the community, but we have roots, the historical memory which binds us to them. We are in the hall, in the uniform clothing, use i-pods, computers, more than that we intuitively know how to behave in such a form of communication. We are contemporaries! In this sense, there is no difference in origin and passport. The identity of the culture and locality of society is becoming increasingly blurred, but there is a more relevant relationship. And it’s a challenge to all local identity, the phenomena independent from the current phase of development. The tradition is transformed into a technology penetration in the other. Thus, the unique study of the East becomes the part of the complex global recovery, promotes a healthy lifestyle. Chinese cuisine competes with the “Mac Donalds. American comics compensate myths-images of the traditionally established system. Just as culture is the anthem of actions, the sign, and this means that in the modern society there exists the system of the permanent transfer of innovative changes that there is cultural coding competition. Our children do not read fairy tales any more. Today, they are more attracted by the books about the adventures of Mickey Mouse. They lack of deep meaning. There are no morals. And there is only the orientation in space and situation. Thus, if we talk about economic reforms, we must localize the social system in the context of globalization.
To localize but retain their advantages and compete in different ways of action. The culture industry is acting as a new value, its product, its competitiveness and its impact on the shift of values. I would like to draw your attention to yet another aspect, which may be the subject of a discussion in the next forum – is the transformation of nations. A nation turns into a kind of social corporation. Today we talked much about political tastes in particular, it concerns the countries that represent the interest for the division of labor. We specialize unnoticed. The Ukraine is specialized in the metal and agriculture. Azerbaijan is known as an oil country, and this trend increases, becomes stronger. To learn to operate in a locale code system, to understand the specifics of social corporations, provided relief to prevent it, turning into a kind (as noted by the European philosophers of the new Middle Ages) the task of intellectuals. This question of the role of intellectuals has been widely discussed in the framework of a modern humanitarian debate. One of the American philosophers coined the term “strong and weak nation”. We will respond the question whether we are strong or weak by implementing our modernized strategies.
Thank you very much, the flow is given to professor M.Meybullayev, the head of the department “Economic theory”, Azerbaijan State University of Economics.Applauds.
M.X. Meybullayev – professor
The modern outlook to the theory of Economic Development.
The theory of development took its formation from the beginning of the XX-century, since then it began to reflect it self in different fields such as in “development economy” later on social, ecological spheres, but under today’s existing conditions it reflects itself in humanism.
The point is that development economy initially was founded in the frame of development economy concession. The method of modern economic approach investigates different paradigm. Of course, different approach to the theory of development economy, such as neoclassic, institutionalism, supply economy, rational expectation, existing conceptions in the frame of is institutionalism make inevitable to approach on matter of economic development with new investigations.
As development economy came into view guided by principles market economy, later on foundation of modern civil market economy makes necessary to stress the necessity of out market principles. This field deals with different formation which were founded by dignified supported the way of life, the principles that guaranties economy development, the protection of environment, the stimulation ways of self living, the system which is based to spiritual, religious moral values, legal exchange value, social civil society. That is why, it is necessary to clarify the difference lateen Economic development and development Economy.
In the sphere of modern global lamination, development economy got its new quality. Having directly relation with the world countries increase mutual relation and dependence of one – another. The poverty and prosperity, well-being are the most actual problem of today, and it leads to the humanity.
Development economy deals with:
Taking into the consideration noted above for the defining of humanization aspects of development economy, we must pay its aspects.
The formation of economic physiology is very important for the development economy. This is connected with activities that are beneficial to all nations who have right economic resources and have the right to use it depending the chance and situation Depending on economic psychology peoples
Economic norms of behavior occur and economic psychology is being developed in the bases of economic view. Cultural spiritual, religious, together with.
Economic mentality gives evidence to economic psychology which was.
Founded from economic view.
Being personal member of society humanist member depends on the level of potential developments. Economic physicology characterizes the features of economic development activating in current society that illustrates social,cultural, traditional, religious, ethical and national mentality welth system. Obeying to humanism prinsipals are being generated from the progressive features of development model and form decent life style. In the centre of modern humanist behavior regulations ,there stands the behavior that love active life style and efficiency.
Humanism must be formed in every level of economic organization, like house economy, firm and state organization system. Progressive humanist behaviour can be illustrated only when selforganization has already expedient feature in all spheres of economic activity,getting opportunity of having benefit by those who are activating in it, providing the level of getting profit.
For the getting the continious form of development economy, the non-stop education, the formation of moral-cultural worldoutlook, the supply of activity in choosing profession is very important. The modern information-communication, the supply of modern technological equipments, preventing from the moral wearing outs of it will push, both the economic development and economic development model.
Economic development model-being the process of real facts and realities in a brief form of national economy, is an economic result used in the current law in society,principals and theory. Depending on its level , we can make opinions about national economic development model.
The humanist aspects of economic development also depend on:
We must consider that it is very important to clarify the content of development economy for the purpose of whom and what is being accepted as fundamental decisions not depending on the level of development in every society. We can define the state influence mechanism to the development economy with the creation of the opportunities of the current potentials by the people. Therefore, development economy includes income that calculated with exact economic alterations, trusts, price, non-economic institutional factors besides property, from the usage of natural resources to the conducting mechanism, free time and all factors that support the development of the personal development.
From this point of view, development economy is characterized as combining information-communication system; all progressive tends with mutual dependents. Such condition push the relationship of the tends generated from the globalization process and the formation of development national model. We must mark that the definition of the way of achievement of development economy doesn’t do away with several contrasts. On the contrary, in some cases it is deepening, completely becomes the delaying factor of national economy development. Here, we must note the leveling of the people, especially. The main contrast of development economy is as follows; very little part of minorities (it cannot be accepted even a group of people relatively the whole people getting rich extraordinarily, wonderful life style, when the other group of people not getting even the average level, another group of people getting poor relatively available resource progress. Speaking about the poverty, it doesn’t mean that it is only the limitation of the income level, but also not having an opportunity to lengthening of average life period, the weakening of the use of medical service, impossible use of high education system, no use of resort centers etc. The poverty is already in charge of with moral-cultural, ethical -legal factor.
Main reasons of poverty can be noted; unemployment, the lack of capital, the low level of labor production, the low level of educational system, non-stabile policy, not getting suitableness to the institutional changes of the current economic system, not having production and entrusted tend
The gathering of the wealth rapidly in few hands, on the other hand it causes moving of many hands. And it makes to have such aphorism “the poverty is born from the abundance”. In the result, very low, unpleased spirit becomes in the society that this increases the tend to terrorism, greediness, owning everything by every means.
So, development economy characterizes the combination of economic development, sustainable development, economical policy by the state, short and long-term development of the society.
Providing of economic growth as a whole for the playing significant role of the sustainable development, increasing of people’s and state’s revenue and decreasing of the poverty is not the new problem. But, in the current time the deepening of the integration relations of globalization process must be paid attention during financial and economical competition and in the providing of the preference to competitive abilities of national economy .It is known that on condition of the broadening of the information, national economies want to benefit from this factor in their own development. But we must take into consideration that, the current potential level and opportunity of the national economy play an important role in the economic growth. If the use of hydro carbon resources as a natural factor was preferred during the first years of transition period as the start position of economic growth, then the preference was given to the important use of non-oil sector. Because of the ending of transition period the economic growth is being realized on the innovation factor of every sector of national economy. Azerbaijan’s reality puts in front insistently the increasing investment and labor production on the account of innovations and investments in this agrarian sector. It means that, the agrarian sector regions the role of human capital rises which participates in labor process. In the result, the people’s potential opportunities (who were poor in those areas) are increasing. This can be seen in “The program of social-economic development in the regions” held and are being held still in our country, also in Western Asian countries. The rapid economic growth can be characterized as a national sustainable economy on condition that the income of people has increased on the one hand, on the other hand the special weight of poor people has decreased. The rapid economic growth has to provide both the increase of incomes and the decrease the number of poor people.
The speed of the economic growth’s increase can be characterized relatively in increasing of income and decreasing of poverty depending on the level of the inflation and unemployment, on the characteristics of cycle of national economy in the stages of the economic development. This process can take long time. But, for the sake of the decrease of poverty and the increase of the income, the stopping of speed of the economic growth is standing on the basis of economic policy. If the leading policy is the base of average and low speed of growth, it means that the provision of available economic opportunities, the price factor in the world market, regional development balance and social security is considered. Therefore, the considering of the high increase of GDP is always difficult and complicated process. Because, the sustainability of economic growth depends on
It is known from the world experience that the getting poor of the people in a mass form , the decreasing of the life quality, the worsening the level of the people’s health, the decreasing of reproductive potential and the weakening of gene found, the gradual fall into decay of intellectual potential, the preparation of the staff and the decrease of the quality of the educational system, the flow of experienced professionals, spreading of the life style which is nationally unknown to the people, leading of the illegal actions- not answering to the citizens’ interest of state executive authorities is the outcome of the wrong direction of the state’s social policy. As the social programs are declarative and official, its non suitableness to the state’s financial opportunities, non coordination of the people’s real incomes with the speed of the reforms applied in the social sphere decreases the significance of these programs to zero.
In this point, the state having one social policy concept, the concretion of the priorities and directions for long-term perspective is very important. The improving requirement of the state regulation mechanism of social-labor relations is non – stop increase considering the specification of the state’s economic- regulative transformation function in the world market development and formation process, in the definition of the purpose and the priorities of the state’s economic, social policy. Therefore, in the current situation the state’s economic policy is very important in the formation of humanitarian model of economic development aspects.
Thank you, very much! By the way I want to note that the level of poverty has lowered to 9% from 49% the last 7 years. According to the adopted State programs the poverty will be abolished for the next 7 years. But the level of poverty standards in Azerbaijan is not 2 dollars, but more higher. I simply wanted to draw your attention into these figures.
Dear friends, respectable guests, very respectable teachers, students. We have done something useful within the day here, listened to weighty reports. Naturally, most of the participants of the round- table discussion are well- known, scientists who are popular in their field of science. Discussions made by them were interesting even for us, economists and the people who have some experiences. The fact is that the discussed matter is very interesting and actual for all periods of time. I can imagine that serious duties lay on the scientists, after this we must broaden our researches in this field, at the same time we must deeply study the world experience and utilize their experiences. We have come to conclusion that economy must serve to the human, but not human to the economy. The stereotype formed for many years has already changed. Human is not only consumer, producer or labor force, it is not correct.
I think you agree with me. Human must stand in the nucleus of the economic process. Generally the main target, aim of the social economic growth must be human and his welfare. Otherwise not justice, not social guarantee and so on can be spoken about.
Dear friends, I consider that the forum is held in Azerbaijan not accidentally. Therefore processes happen in Azerbaijan recently and serious achievements gained in the spoken sphere, positive experience, at the same time attention and care given to these processes by the state gathered us here together. I thank the guests for accepting our invitation to participate at the Forum and for their interesting reports. Today we part with you but not forever, we shall see again. Therefore Baku Humanitarian forum will be held every year, we shall wait for you here with new ideas, new conceptions take part and bring different climate to the forum. Thank you, very much. (Applauds)
We have only 1 matter left, to affirm the declaration of the Humanitarian Forum. Declaration has been distributed to each of you, that is why there is no need to read it here. Suggestion is that to adopt this document as a basis.
Is there any other suggestions? Then I ask you to vote. Maybe there is any suggestion. Please. (Suggestion is given)
If there is no suggestion, taking into account the spoken matter and suggestions I ballot for adopting the declaration.
No opposites, no neutralists. It is affirmed. Thank you, very much.
The text of verbatim report was provided by Azerbaijan State Economic University