Attempted “collective” suicide in Baku indicates economic woes

The young men came from the regions and worked for a private construction company in Baku for months without being paid.

The incident showed how vulnerable Azerbaijan’s construction industry is to the economic crisis unfolding in Russia.

Azerbaijan’s real estate market has always been dependent on the economic situation in Russia, where hundreds of thousands of Azerbaijani immigrants live and work. 

The immigrants send money back home to buy real estate. 

The government argues that Azerbaijan will emerge largely unscathed form the falling energy prices. Economic expert Zohrab Ismayil has another view. This is what Ismayil wrote on his Facebook page: 

"Azerbaijan was seriously affected when oil prices fell for a short period of time in 2008-2009. Budget revenue fell at the time and the government had to postpone a number of construction projects.

"SOCAR too was in a difficult situation. It borrowed 750 million manat (approx. $1 billion) from the State Oil Fund (SOFAZ).

"A number of private banks, particularly Unibank, could not pay back loans it had borrowed from foreign lenders. It had the risk of losing part of its stakes to foreign creditors. Unibank also received 40 million manat of bailout from the government.

"Private construction businesses were also badly affected by the falling oil prices. Real estate prices plummeted. Trade and services were down. All of these have been documented in reports by international financial institutions. 

"But then oil prices started to grow and Azerbaijan got out of the difficult situation.