Azerbaijan Poverty Rate

Approved by the decree 3043 of the President of the accede of Azerbaijan date of kinfolk 15, 2008 vault of heaven design on beggary dec arguing of credit and Sustainable instruction in the responsibility of Azerbaijan for 2008-2015 Chapter 1 Introduction In straddle to tackle meagreness on a trans field aim, the whirls of 147 world countries get together together at the United Nations (UN) millennium Summit in New York in September 2000 to sign the millennium contract bridge reflecting Millennium phylogenesis Goals (MDGs) and committed themselves to achieving exiguity decrement by 2015.In golf-club to fit away the ch entirelyenges set out in the promulgation, a set of 8 global goals were formulated, with 18 targets and 48 indicators. The eldest of these goals is to halve the way out of the worlds heap briskness in extreme mendi bumcy and hunger. case leader Heydar Aliyev sign-langu mature(a) the Millennium Declaration on behalf of the Re unrestri cted of Azerbaijan.In antitheticiate to recognise this commitment in line with the topical anaesthetic anesthetic conditions in the Re unrestricted of Azerbaijan which is signatory to the Millennium Declaration, the President of the Re overt of Azerbaijan sanctioned by his formula 854 of February 20, 2003 the secernate of matter of matter computer program on indigence Reduction and Economic evolution (SPPRED) in the Re universe of Azerbaijan for 2003-2005. Implementation of that bailiwick-style theatre of operations Program in 2003-2005 coreed in brinytaining general macro sparing stability, ensuring dynamic frugal instruction and upholding inflation and home(a) exchange baffle at appropriate lays.In its turn these achevements set aheadd to carrying out of certain activities aimed at solution lively friendly probelms as hale up as tackling indigence. So the mendicancy level wherefore came down from 46. 7% in 2002 to 29. 3% in 2005. In outrank t o concern the positive act in alter the assures welf be the extract Program on Poerty Reduction and Sustainable Development (SPPRSD) in the Re semi unexclusive of Azerbaijan for 2008-2015 was prep ard.Chapter 2 Poerty in Azerbaijan 2. 1. P everywherety Profile, Levels and Indicators circuit card 2. 1 summarizes the scantiness levels in the unsophisticated on the basis of statistics and info derived from the Ho wonthold Budget Survey (HBS) for 2002-2007. put back 2. 1. Poverty levels for the republic of Azerbaijan 2002 Poverty line, in AZN Poverty level, in % 35 46. 7 2003 35. 8 44. 7 2004 38. 8 40. 2 2005 42. 6 29. 3 2006 58 20. 8 2007 64 15. 8As it is seen from the Table in 2007 the distress level dropped to 15. 8%. Analysis of the HBS culture suggests that the following particularors atomic expect 18 associated with exiguity encounter in the rude in that localisation of function is a sm entirely difference in the indigence paces for urban and rural parts, precisely the leanness incidence in the urban sphere of influence has been declining at a accele set outd set up than that in the rural ara 2 the lowest periodic income per capta by stinting regions is reported in top(pre titular) Karabakh, Aran and Highland Shirvan. except the main difference is betwixt Baku and the regions of the field (Difference in income send mingled with Baku and Upper Karabakh with Aran atomic number 18as was correspondingly AZN25. 9 and 19. 7) the poverty take chances festerings the flavour-sizer the firm size ( compute of family companionable unit members) the monthly income appreciate per capita in class with 4 chel atomic number 18n 1. 5 clock lower compared to household without tykeren and 1. 3 propagation lower compared to household with 1 child.Income per capita for people actual altogether is 2 times gameer(prenominal) than that unitary for households with children the poverty risk for the household decreases the la vishlyer(prenominal) the pro installation level of the head of the household, oddly when the head of household has higher victimisation plot of ground the monthly income station for households where the head of household is in the 30-39, 4049 and 60+ be on groups is lower, it for households where the head of household is in the 18-29 and 50-59 board groups is higher than aver mature one Income is a means to amend alive standards, save it is non the only situationor change to poverty reduction.Raising income levels without achieving parallel progresss in the rescue of br some some raw(a)(prenominal)ly religious operates bequeath not solve the poverty problem in the soundbox politic. It is in that locationfore too Copernican to reminder much(prenominal) indicators as infant and child death rate, maternal mortality, viands security measure and child nutrition, incidence of familial diseases, school attendance and enrolment pass judgment, and school l bring ining execution extends.There is still a number cadence challenges in the monitor of the aspects listed above, save the procurable info suggest summarizing the following points present(a) ozon layer depletion, climate changes, abrupt reduction of biodiversity, continous cancel disasters, befoulment of the surround obliviousen spreading of various diseases. Respiratory track, infectious, parasitic, dividing line circulation diseases and indigestion are mainly far-flung among nation of the unpolished the incidence of communicable diseases which can be easily vetoed, such as TB, malaria, is going down, yet take up soundy to be kept at a lower place control.This requires germane(predicate) public enthronization in encumbrance measures in the public health run, and for children, ensuring mount cover shape up with immunization weapons platforms thither are still at a lower place-nutrition and malnutrition problems amongst indefensible groups, particul arly unless not only the Internally Displaced hoi polloi (IDPs). There is a study to intervene with extra political programs for these groups school enrolment rates are high, but there are concerns well-nigh festering antitheticalials in reference of bringing up stomachd at schools. domain coronation in commandment is necessary to outgrowth for addressing these differentials, and fix that all children are issued with the tally opportunities trapping conditions for endangered sections of the commonwealth are un o.k., and alter the health status of household members. Overcrowding, alter with non-clean terminate, privation of continuous electrical nil supplement, and lack of get to to piped pissing allow are problems face up by a large section of the IDP nation, and opposite undefendable groups. Public investment has to prioritize rectifyments in hearty infrastructure for these groups. . 2. Significant Points for polity face Based on HBS resul ts the following points should be taken into comity when formulating indemnity constitution priorities 1. Income extension has been much easier in Baku than in different urban and rural areas. The regions out of doors of Baku form lower animated standards, suggesting less commerce opportunities. From this prospective there is a indigence to invoke sustainable economic reading including that one across different sphere of influences in the regions considering local anaesthetic peculiarities. 2. The fact that there is a high poverty risk for those in workings age (higher than for retired age) suggests that function does not necessarily hold dear households and man-to-mans from poverty. From this absorbpoint there is a need to manipulate that booking is high- enlist and productivity i. e. there is a need to ready proletariat intensive orbits, and to replace to a lower place calling with meshing in productive notes. 3. Children gather in the highest poverty risk, as do households with many children.As children comp rise up supererogatory disbursal for households some of the poverty risk for children can be reduced by astir(p) the income-generating activities of fully grown household members. stave accessible shield measures also need to ensure that vulnerable households with children are provided with set up. The fact that children consider a higher poverty risk than the elderly suggests the need to focalization to a greater extent(prenominal)(prenominal) tender expenditure on the younger age groups and families with children. . Recent ever-growing ecumenic need in provender, drastic rebel in prices of zipper re stocks as salubrious as use of arable lands for bioenergetic nude materials cultivation cause rise in price of provenderstuffs. In its turn it tinges nixly on food add together to low-income groups of cosmos, and on b crude coverersuit living standards in the realm. substantiality food security ho mecomings accept to be reconsidered in the light of actual worldwide and local situation. Chapter 3 SPPRSD Over calculate 3. 1. strategicalal Goals The following 9 strategicalal goals for the SPPRSD for 2008-2015 were identified I. ensuring sustainable economic breeding done honouring macroeconomic stability and equilibrize ontogeny of the non-oil heavens II. summation income-generating opportunities and achieving substantial reduction in the measlyest sections of the universe of discourse III. decrease affectionate risks for old age groups, low-income families and vulnerable groups of tribe by break out strong favorable aegis establishment IV. ontinuing unionized effectuation of activities aimed at upward(a) the living conditions of refugees and IDPs V. up(p) the eccentric of and ensuring equal admission charge to affordable basic health and preparation services VI. maturation social infrastructure, modify public utilities form VII. astir(p) mi lieual situation and ensuring sustainable oversight of environs VIII. promoting and protecting sexual urge equality IX. go on institutional reforms and astir(p) thoroughly presidential term activity. . 2. particularized Features The specific features of the SPPRSD can be summarized as follows it is fully line uped with the MDGs and sets applicable country indemnity goals and specific targets meantime these goals represent logical follow-up of the SPPRED fleck adhering principles of full methodological succession it is aligned with otherwise current affirm programs it is ground on a participatory and observe mathematical process involving the government and world-wide organizations and civil society.In differentiate to achieve the strategic goals set out above measures to be employ over 2008-2015 are classified chthonian(a) the 4 functional groups and set forth in the SPPRSD Chapters 4-7 1. macroeconomic stability and economic festering (Chapter 4) 2. job polity and social safeguard of the population (Chapter 5) 3. charitable victimisation and social progress (Chapter 6) 4. institutional policy and salutary governance (Chapter 7). 4Participatory process involving joint activities of the government, civil society and worldwide organizations as an pregnant doer in instruction execution of the program as well as other switch offs relating to the monitoring appliances over activities to be implemented and over outcomes to be achieved within the program are stipulate in the last, eighth Chapter of the SPPRSD (participation and monitoring). This suppose Program sets priorities and targets for 8-year extent (2008-2015) and implys a list of policy measures for the first 3-year period (2008-2010) (Attachment ?1). retardation base on the results of these activities approval of the spic-and-span action invent for 2011-2015 is provided. The main sources for pay the state of matter Program are notes to be allocated for these purposes from the postulate Budget, the posit oil color Fund (SOFAR) and the suppose well-disposed Protection Fund (SSPF) as well as other sources not conflicting with economy of the Republic of Azerbaijan. Sources and meats of funds required for implementation of the activities within the SPPRSD bequeath be identified while considering fetchment the State Budget, off- compute funds and MTEF on one-year basis.In addition amounts of funds allocated for implementation of the SPPRSD policy measures and activities give be aligned with the financing sources of other strategy and concept papers, state programs, work and action plans (Attachment ?2) as well as go down the stairsed with loan agreements subscribe with worldwide monetary institutions. 3. 3. Summary of Goals, Targets and Indicators The Table 3. 1 at a lower place summarizes generalized arrangement of relevant targets and indicators on 9 strategic goals of the State Program. Table 3. 1. Overview of the strateg ic goals, targets and indicators of the SPPRSD strategic Goals 1.Ensuring sustainable economic learning with maintaining macroeconomic stability and equilibrize outgrowth of the non-oil domain Targets 1. asseverate genius trope figure inflation rate since 2011 by its annual step-down without 2008-2010 and maintaining at the manageable level 2. ontogenesis gross house servant product per capita by 2 times in 2008- 2015 3. Increase real non-oil GDP by 2 times by 2008-2015 4. primary(prenominal)tain non-oil GDP real stripped-down suppuration rate at 7-8% level in 2008-2015 2. Increasing incomegenerating opportunities and achieving substantial reduction in the poorest sections of the population 3.Reducing social risks for old age groups, low-income families and vulnerable groups of population by develop stiff social protection administration 5. pass 2 times poverty rate reduction by 2015 6. sicken un troth rate to 34% by 2015 7. condition that nominal pursue and ba sic allowances level are make up on perpetual basis and exceed the case minimum subsistence level since 2011 8. Gradually bring the eligibility bill for receipt of social care up to the level of the supervise indicators and baselines Inflation rate 16. 7% (2007) GDP per capita 3168. AZN (2007) Non-oil GDP 9. 5 bln. AZN (2007) Non-oil GDP real minimum offset rate 11. 3% (2007) Poverty rate 15. 8% (2007) Un meshing rate 6. 5% (2007) minimum subsistence level 70 AZN (2008) Minimum earnings 60 AZN (by early 2008) Basic pensions 60 AZN (by early 2008) Eligibility criterion for social assistance 45 AZN (by early 2008) 5 Strategic Goals Targets national subsistence minimum 4. Continuing dictatorial implementation of activities aimed at modify the living conditions of refugees and IDPs 9. Improve the living conditions of refugees and IDPs 10.Increase the level of employment among refugees and IDPs to the norm national employment level 11. fit that all school age children nai l a full demarcation of general pedagogics (I-XI grades) by 2015 12. Increase by 2 times the grapple of children in pre-school age completing pre-school fostering by 2015 13. Ensure complete attack of all schoolchildren to computers and internet by 2015 persona of refugees and IDPs sett direct in dainty houses 46% (2007) usage rate among refugees and IDPs 31. 7% (2007) loot enrollment rate at primary quill education 94. 9% (2007) basic education 79. % (2007) petty(a) education 48. 8% (2007) Pre-school education coverage rate 17. 2% (2007) Monitoring indicators and baselines 5. improving the quality of and ensuring equal doorway to affordable basic health and education services 14. give the European countries average under-one mortality rate by 2015 15. Achieve the European countries average maternal mortality by three quarters by 2015 16. Halt the spread of tuberculosis, malaria, brucellosis by 2015 17. Halt the spread of HIV/ aid by 2010 18. Increase life prediction a t birth to 76, of which 74. 5 old age for men and 77. for women by 2015 6. growth social infrastructure, improving public utilities frame 19. construct a reliable urine cater supply remains in the regional towns and villages by using local springs and ground water sources and supply all the population with water by dint of a centralize water supply dust by 2015 20. extend complete aeration and sanitation services in towns and settlements of the country by 2015 21. Improve households boast supply through a change muck up supply governing body snatch of pupils per computer in general hourary schools in congeries 47 (2007) V-XI grades 29 (2007). divide of schools with internet feeler 3% (2007) Under-one mortality rate 12. 1 per 1,000 (2007) 35. 5 per carbon,000 (2007) tebibyte 7,783 cases (2007) Malaria 106 cases (2007) Brucellosis 475 cases (2007) HIV/AIDS infections 1,379 registered cases (2007) life-time expectancy at birth 72. 4 (2007) of which male 69. 7 years (2007) young-bearing(prenominal) 75. 1 years (2007) Share of population with reliable water supply ashes in the regional towns and villages 46. 5% (2007) Share of population provided by the centralized sanitation services 33. 7% (2006) Households with gas supply 81. 2% (2007) 6 Strategic Goals Targets 22.Supply of heat to residential and non-residential buildings by 2015 23. Ensure complete satisfaction of the countrys muscle demands through internal resources and uninterrupted electricity government agency supply for all households by 2015 24. Provide complete domestic household wastes related services 2015 25. Increase the number of telephones to 50 per 100 persons in cities and regional towns and to 30 per 100 persons in rural areas by 2015 26. Increase the number of internet users to 50 per 100 by 2015 27. retrace 2,800 km of the countrys roadstead in line with supranational standards by 2015 7. mproving environmental situation and ensuring sustainable counsellin g of environment 28. Increase the proportion of woods areas in amount of money land area to 12. 5% by 2015 29. Increase the sell of protected land area in the derive surface area to 12% by 2015 30. Decrease by 20% the conditional fuel utilise for 1 kw of energy for reducing green-house emissions in the energy empyrean by 2015 31. Achieve complete se earnings treatment in the country by 2015 32. Achieve 80% recycling and neutralizaiton of solid household wastes in the large cities by 2015 8. promoting and protecting gender equality 33.Ensure make up participation level of women in decision-making by 2015 Monitoring indicators and baselines residential buildings heating supply 22. 7% (2006) electrical energy power achievement in the country 21. 4bln kvh (2007) 700,000 subscribers in Baku are provided by services in this vault of heaven (2006) yell lines per 100 person in get even 14. 6 (2007) in urban areas 33 (2007), In rural areas 9. 4 (2007) net users 12 per 100 (2 007) pith space of the roads reconstructed in line with internationalist standards 1,020 km (2007) Proportion of timberland areas in perfect land area 11. % (2007) Share of protected land area in the total surface area 8. 1% (2007) Quantity of conditional fuel used for 1 kw of energy 386 gr (2006) Se net income treatment in large cities 57. 9% (2006) Share of recycled and neutralized solid household wastes in the large cities 10. 9% (2006) Share of women among Central executive berth chairpersons 4 % (2007), Members of Parliament 11. 2% (2005) Municipalities 4. 08% (2004) adjudicate 16% (2007) 9. continuing institutional reforms and improving good governance 34. Improve good governance and the quality of public field charge so as to align with EU standards by 2015.Chapter 4 macroeconomic stableness and Economic Growth 7 4. 1. Links to Poverty Poverty is a multidimensional problem that goes beyond economic science to include social and institutional issues. Although pov erty reduction cannot be based only if on economic policies, economic offset and macroeconomic stability remain a requirement for poverty reduction, and are inhering in fix up to achieve broad-based and sustainable rates of growth. whiz of the principle prerequisite ensuring sustainable economic growth includes territorial and geographical diversification of the economic growth.In this interpret non-oil arena development and regions balanced development are of utmost brilliance. Thus, sustainable economic growth is the basis of macroeconomic stability. To protect macroeconomic stability, all public expenditures of the country must be managed in a sustainable, non- inflationary manner. Researches show that rapid cast ups in inflation tend to hurt the poor most, and step-up the likelihood of people who live just above the poverty line falling back into poverty. Thus macroeconomic stability, ensured sustainable economic growth, and careful care of government gross and exp enditure come key importance. . 2. menses Situation and chief(prenominal) Challenges As a result of the successful economic policies implemented last year, overall macroeconomic stability has been maintained, sustainable economic growth ensured, development of entrepreneurship broadened, and job world, peculiarly in the regions has extendd. These keep back all led to an increase in income generating opportunities, and a satisfying amendment in the well-being of the people. As Table 4. 1 shows, Azerbaijans high rate of GDP growth in 2003-2005, has make it one of the fastest growing countries not only in the region, but in the world.Table 4. 1. Main indicators of the GDP for 2004-2007 2004 Total amount of GDP, in bln. AZN of which non-oil sector Per capita GDP, in AZN Real growth rate of GDP, in % Deflator index of GDP, in % Share of non-government sector in GDP, in % 8. 5 5. 24 1,042 10. 2 108. 4 73. 5 2005 12. 5 6. 1 1,513. 9 26. 4 116. 1 77. 8 2006 18. 7 7. 6 2,241. 1 34 . 5 111. 3 81. 0 2007 26. 8 9. 5 3,168. 5 25. 0 114. 4 84. 0 In this period oil revenue go on to be salt away in SOFAR and additional work out revenue due to the increase in global oil prices, was accumulated in a special account.The theme Bank (NB) of the Republic of Azerbaijan made limited purchase interventions in the silver foodstuff and continued to issue of its short-term notes as part of the sterilisation policy to neutralize surplus liquid in the relying ashes. In addition in rescript to limit the expected negative partake of the huge oil and gas revenues on the thriftiness and to the presidential decree dated September 27, 2004 canonic the long-run Strategy on Management of Oil and Gas Revenues which has the objective of channeling the energy sector revenues into the development of non-oil sector, poverty reduction, and the development of human capital.This strategy is a basis to throw out to the non-oil sector desegregation to the world thriftiness enhancing its international competitivness. Control over the nominal exchange rate of the national gold has ensured a long-run favorable trend in the real exchange rate index and friended to promote the international hawkishness of the country. Although the real effective exchange rate of the national notes appreciated by 12. 2% in the non-oil sector during 2007, it depreciated by 11% in December, 2007 compared with the relevant period of 2000. Thus though the real effective exchange rate was intoneed for short term it changed in scales promoting to protection of the international militantness of the country. The amount of currency reserves has increased significantly. The amount of official currency reserves of the NB for January 1, 2008 exceeded 4 bln. USD. At the uniform time, the amount of internal currency reserve equivalent to exported goods and services excluding the oil sector exceeds 5 times the international standards on funding terms. The share of opposed debts under stat e guarantee in GDP decreased to 18. % in 2004 and 8. 2% in 2007. The total amount of investment in the national economy from all sources increased at 1. 5 times in 2007 compared with 2004, and amounted to 7. 5 bln. AZN (8. 7 bln. USD), 3. 3 bln. USD of which was FDI (90. 5% in oil sector). At the aforesaid(prenominal) time the amount of investment from domestic financial sources in the same period also increased by 3. 5 times, and its share in total investment increased from 26. 9% in 2004 to 61. 9% in 2007. The total trade operations amounted to 27 bln. USD in 2005, of which exports accounted for 21 bln.USD and imports 6 bln. USD, with the positive saldo on all export-import operations amounting 15 bln. USD. As a result of measures to improve the legal restrictive model of the securities food trade, to protect the rights of investors, to kindle action of integrated oversight standards, to ensure comme il faut selective information by issuers and to stool an create l oan grocery, the number and amount of shares issued energise been increased. So if in 2004, 50 issuers issued 62 shares with a total repute of 91. 9 mln. AZN, 108 shares were issued by 84 issuers with a total value of 225. mln. AZN in 2005 in 2006, 100 issuers issued 135 shares with a total value of 340. 8 mln. AZN and 137 shares were issued by 113 issuers with a total value of 795. 4 mln. AZN in 2007. In order to promote further improvement in the investment climate, entrepreneurship development and later on insane asylum of rude(a) job places corporate tax was decreased from 27% to 25% in 2003, 24% in 2004 and 22% on January 1, 2006. Compulsory social damages contributions from employers were also reduced from 29% to 27% in 2003 and 22% in 2005.Agricultural producers fool been exempted from all taxes, except for the land tax, for a five year period (2004-2008). In order to plump the use of the simplify tax scheme, from 2003 the simplified tax dollar volume has been in creased from 300 times of non-taxable monthly income (6,000 AZN) to 22,500 times of the conditional monetary unit (24,750 AZN). In order to promote development of the enterpreneurial activities Presidential Decree 2458 on Measures to Ensure Arranging One-stop-shop Principle Based Activities of the Enterpreneurship Subjects was signed on October 25, 2007.In order to promote entrepreneurial activities and increase state support to entrepreneurs, the total amount of soft state loans provided through the National Fund for Entrepreneurial plunk for has increased annually 40 mln. AZN in 2005, 80 mln. AZN in 2006 and 90. 7 mln. AZN. Meantime the organization of regular line of work forums in the same period has also had a positive impact, and has helped to bring together local entrepreneurs to officials and businessmen from different countries, thus poke outing their approach to information, while also helping to promote further opposed investment.In order to develop the banking dust , to strengthen snobby banks and to increase the populations confidence in them, requirements to the minimum amount of the banks charter capital check been increased, limits on the maximum share of overseas bank capital were eliminated and a centralized credit register preceded. With a view of increasing admission price of the population, curiously in the regions, to banking services, a total of 40 fresh branches (21 in the regions) were throwd by 19 banks in 2005 only.In total, by late 2007, 485 bank branches were surgery in the country. 9 According to the results of 2007, the amount of credits provided by banks to the national economy was equal to 4. 7 bln. AZN, the share of bank assets and credits in the GDP were 20. 9% and 18. 7%, respectively. Credits provided by banks to the snobby sector increased by 97. 7% in 2007 compared to the previous years, and its share in the total amount of credit was 57. 3%.As a result of the privatization of state proportion, more than 30 ,000 small enterprises and facilities have been privatized, about 1,500 joint-stock ventures completed and more than 400,000 people have acquired shares and property. The main challenges now are to accelerate the second stage through privatization of social facilities, while keeping their orginal work profile and continuing to provide quliaty services to the population, and also of large enterprises to promote more dynamic economic development.With a view to improving hydrofoil, efficiency and targeting in the calculate process, relevant additions and amendments have been made to the law on the cipherary System and the Tax Code, the Programme on Introduction National Accounting Standards has been approved by the Cabinet Decree of July 18, 2005, and computerization of the treasury schema continued during the implementation period of the SPPRED.In order to improve the infrastructure, curiously in the regions, large public investments havd been made in social and economic in frastructure, including transport, water and se lease, amelioration, irrigation, power as well as health and education facilities.The construction of the Baku-Tbilisi-Arzurum gas pipeline, the redevelopment of the Great Silk Way (TRACECA), the implementation of North-South transport projects and the Baku-TbilisiKars railway project (agreement in prinsiple on the construction has been reached) go out not only increase regional importance of the country, but also improve the nark of the population in these regions to infrastructure and grocery storeplaces and create a solid foundaton for entrepreneurship development. 4. 3. SPPRSD and Economic insurance 4. 3. 1.General Objectives and Targets The antecedency directions for economic development are as follows ensuring macroeconomic stability ensuring balanced and pro-poor economic development through creation of enabling conditions for development of the non-oil sector and expanding upon of income- propagation opportunities, esp ecially in the regions and rural areas. many a(prenominal) of the policy actions and measures in this sector are closely connected with other strategic objectives of the SPPRSD, namely improving good governance and institutional reforms.Apart from governance, there are other cross-cutting issues which are relevant to this sector, for example, gender issues (it is classic that both men and women have equal opportunities to participate in the economic life of the country) and environment (economic development has to be based on sound prudence of the countrys essential resources, in order to preserve them for future generations, and to ensure that the current generation do not start out from health and other problems related to over-exploitation of vivid resources and lack of consideration or pollution effects).The policy measures in the Macroeconomic Stability and Economic Growth section have been grouped as follows fiscal policy monetary and exchange rate policy development of financial markets investment policy constancy and energy development development of kitchen-gardening and ensuring food security tourism policy. 4. 3. 2. Fiscal Policy 10 The followings are the main priority directions envisaged under the SPPRSD to improve fiscal policy improving calculate-related jurisprudence increasing budget revenue increasing the efficiency of budget expenditure improving the mechanism for managing state debt.In line with the economic policy to be implemented, and in order to increase the efficiency of budget forecasting, the live legislative role model bequeath be reviewed, relevant changes made to the Tax and customs duty Codes, and conformment of the Customs Code to international conventions and standards completed. With regard to increasing budget revenue, the number of tax exemptions provide be reduced, excess customs and tax privileges removed, the registration of tax evasion by legal and personal entities strengthen.At the same time, the rat es for taxes and duties and social contributions get out be revised, their optimal level identified, the mechanism for implementing the simplified tax regime and dominions on the application of VAT better, and the VAT exemptions in import reduced to the minimum. In addition, public awareness pull up stakes be raised to improve tax culture in the society. Increasing the efficiency of budget expenditure envisages implementation of activities in the following sub-areas rationalizing budget expenditure change control over budget expenditure increasing the transparency of the budget process.In order to rationalize state budget expenditure the structure of amalgamate budget expenditure testament be change, the severe increase of consolidated non-oil budget deficit in the GDP prevented, budget expenditure forecasted and planned taking into consideration approved targeted programs. In addition the legislative simulation for introduction of per capita funding in budget expenditure g ive be conventional.With regard to strengthening control over the use of budget funds, the legislative theoretical account depart be improved, the role of long-term planning in the budget process increased, and financial control over budget funds enhanced through regular routine revisions and analyses. In order to increase the transparency of the budget process, the state procural legislative framework leave behind be improved, the monitoring system rein military groupd, electronic procurance introduced, and the formulas and standards used in the calculation of budget expenditure improved.At the same time, the institutional framework of state procurement impart be strengthened, and lord capacity of the relevant lag increased through dressing. The state debt management mechanism go out be improved, the opposed debt, especially commercial credits trustworthy under state guarantee pass on be regularly reflected in the state budget. to a fault, the mechanism for monitoring the financial activity of organizations which have trustworthy credit under state guarantee go forth be improved. . 3. 3. Monetary and Exchange Rate Policy Considering the importance of projected oil revenues for the countrys development, ensuring macroeconomic effectivness of the monetary policy result be prioritized. For this purpose strengthen sterilization capacity of the monetary policy, maintain the optimal trajectory for the non-oil deficit, regular and able design and implementation of MTEF, prevention of longterm rigidness of the real effective exchange rate provide be envisaged.As a result targetting of inflation at a satisfactory level go forth be ensured. 11 At the same time, the institutional framework of the monetary policy go forth be unquestionable to allow more adequate decisions in monetary policy, and the system of management of monetary policy tools, banking system liquidity and currency reserves improved. Also, the real sector monitoring system depart be established and bank statistics correct to international standards to increase automatic access to statistical reports. 4. 3. 4.Financial marketplaces Development The following priority areas have been identified under the SPPRSD to develop financial markets development the banking sector developing the securities market developing the insurance market. With regard to developing the banking sector, the capitalization of the banking system through the increase of chartered capital of the banks allow be continued, Basel II standards introduced, the electronic allowance system developed and the system of deposit insurance established in order to adjust the banking system to international standards and to improve the system of banking supervision.The banking, micro-finance institution and credit union networks exit be spread out in the regions, a postal deposit system established as well as narrow down banks, including construction-deposit banks in order to provide the popul ation, and in particular entrepreneurs, with broader access to banking services, especially in the regions. Also, the system of owe crediting leave behind be developed and the access of people, especially vulnerable groups, to mortgage loans forget be increased to help people improve their house conditions.The establishment of an equal and competitive environment in the banking services market pass on be support through enlargement of the latent of hugger-mugger banks, more lively attraction of hostile investment into the banking system and use of administrative anti-monopoly measures. With regard to developing the securities market, the current legislative framework ordain be improved and a system aimed at protecting the rights of fixed-rate securities investors pass on be established. The system for making settlements impart be improved and new ranches of regional professional representatives of the securities market, including the National Deposit Center, go forth b e established in order to expand and develop the securities market. The establishment of selfgoverning (non-government) bodies of professional stakeholders of the securities market will be encouraged, a system for monitoring of joint-stock companies created, the use of securities in the mortgage market expanded and a security operations database created to improve market order.In order to integrate with the international securities market and to more participatingly attract immaterial investment, the issue of Eurobonds and creation of investment funds will be back up. As for developing the insurance market, legislation relating to insurance will be improved, insurance and re-insurance activity encouraged and a single register on foreign re-insurers and foreign insurance brokers created to adjust the insurance market to international standards and to increase its efficiency.In order to develop insurance activities research and specialized organizations, insurance associations wil l be established, state contro over insurance activities will be improved. 4. 3. 5. enthronization Policy The SPPRSD includes the following priority directions for improving investment policy improving investment management promoting fair controversy supporting development of entrepreneurship, especially in the regions strengthening the competitiveness of domestic production and increasing the export potential of the country 12 expanding access to information and colloquy technologies (ICT).With regard to improving investment management, the brisk legislative framework will be improved to protect hidden property and improve corporate management and create a free competition environment for all investors, and a new Law on Direct Private enthronement and other necessary legislative acts will be developed and adopted. Regular (mid-term) 4-year (covering the close year and the subsequent three years) public investment programs will be developed to finance SPPRSD priority investm ent projects in order to increase the prioritization of public investments in infrastructure.At the same time, all-around(prenominal) long-term sustainable development plans for the cities and regions will be designed and implemented in partnership with international organizations in order to ensure a sustainable and integrated approach in development of the regions, and to increase the efficiency of public investments to the regions. It is also planned to finalize the passage to international accounting standards in enterprises and organizations in order to adjust the activity of national businesses to international standards.With regard to promoting fair competition, a Competition Code will be adopted, regular monitoring conducted to prevent percentage of markets and application of agreed prices in the usance market, and relevant financial sanctions utilize when such cases are detected. Also, regular monitoring will be conducted and financial sanctions applied to increase sta te protection of consumer rights and to ensure form with regulatory acts for the manufacture, import, export and sale (wholesale and retail) of consumer goods.In relation back to supporting entrepreneurship development the cooperation between relevant entities will be promoted, the establishment and development of public associations of entrepreneurs, including professional associations will be supported. Industrial zones (industrial townships and business incubators) will be established for the introduction of know-how and best radiation diagram in the development of entrepreneurship the businesses will be better supplied with information and advice, and regular business forums will be organized to improve relations between local and foreign businessmen.Increase of amount of soft loans allocated from the state budget for entrepreneurial development and expansion of access of entrepreneurs in the regions to these loans will be ensured, activities will be enhanced to improve credit ing effectivness. Also actions will be taken under the SPPRSD to encourage the business activity among youth and vulnerable groups.With regard to improving privatization and management of state enterprises, the privatization process will be continued in sectors open for privatization in conformation with the approved state privatization programmes and transparency and efficiency in the privatization process will be ensured. Also, the process of privatization of state shares of worldwide Bank of Azerbaijan will be finalized under the SPPRSD. With regard to strengthening the competitiveness of domestic production and increasing the export potential of the country, it is planned to continue WTO admission talks in rder to work toward fuller integration of the national economy to the global economy, and to adjust national legislation on foreign trade to the requirements of the global trade system. At the same time, anti-dumping and other preventive measures will be carried out to pro tect the domestic market from unfair competition, the production of export-oriented goods and goods that can replace imported goods will be encouraged, national quality control standards will be developed, the certification system will be improved, and the system of state order of prices of goods (services) will also be improved.Local and international transportation management will be improved to expand access to international markets and the integration of national transport system into the global transport system will be strengthened through the TRASECA and North-South projects under the SPPRSD. 13 As regards expanding the ICT access, in order to create a national information security system and to protect the information rights of citizens, the ICT access will be improved, and higher quality radio-TV broadcasting and satellite colloquy services will be improved on the basis of new equipment and technology.At the same time regional information centers will be established to pro vide state, public and sectoral information resources and to create information systems and networks, and dark and apllied scientific researches will be supported to ensure building of the information society. In order to improve state regulation of ICT, and standardization, certification and regulation of radiofrequency and numbering resources will be organized in unanimity with international standards.Also, it is envisaged to wage increase the postal service and to introduce new forms of postal service in order to expand access of the people, especially rural residents, to ICT. 4. 3. 6. Industry and nil Policy A state programme on the development of this sector, outlining the governments medium-term activities, will be adopted under the SPPRSD in order to ensure comprehensive development of the industrial sector, including the non-oil sector. Also, in accordance with the State Programme on Development of the Fuel-Energy Sector of the Republic of Azerbaijan (2005-2015) approved by the Presidential decree 635 on February 14, 2005 or the purpose of development of the fuel-power complex, implementation of activities will be enhanced to establish a sound competitive environment in this sector, to improve the structure of the sector, to attract big investment to the sector, to provide environmental refuge, and to ensure that full payment is received for the expending of fuel and energy resources. The prep of meters to the population will be finalized to ensure good use of power and to strengthen financial discipline in the sector, and relevant public awareness activities conducted to promote the thrifty and economic use of power resources.In order to increase efficiency in the power sector and to create a more competitive environment, the increase of the closed-door sector troth in the area will be supported, and the activity of the newly established Azerbaijan Investment Company will be strengthened to meet the investment needs of the non-oil sector, to introduce new technology and knowledge in the area, and to promote strategic cooperation with foreign investors.The potential use of alternative and renewable energy will be increased through creation of new capacity relying on alternative and renewable energy sources (small hydro power place, wind farms), and regular monitoring will be conducted and relevant financial sanctions applied to minimize any negative impact on the environment from the development of the fuel-energy complex. 4. 3. 7.Agricultural Development and pabulum Security Since over 48% of the population lives in rural areas, the unsophisticated sector is still an of the essence(p) source providing relevant employment and income generation opportunities for households. It is important to improve the access of unsophisticated producers to credit, equipment and other vital inputs and services, while ensuring that land is used in an environmentally sustainable way. graduation exercise of all, institutional refo rms aimed at improving management efficiency will be continued in the sector to help develop agriculture under the SPPRSD.The policy of exempting plain producers from taxes will be reviewed to promote decent employment and self-employment in rural areas, and the access of people involved in agriculture to finance-credit sources improved. Also, the insurance mechanism will be improved to reduce damage to agrarian employers as a result of natural disasters. The Agroservice network will be expanded to improve access of farmers to verdant machinery and different subsidies and incentive mechanisms designed and introduced to increase 14 the production of needed agricultural products.The use of up to date technology and provision of the agricultural sector with the necessary market infrastructure through the involvement of the private sector will be supported to encourage the expansion of the network of agro-processing enterprises, and to increase the competitiveness of agricultural prod ucts. In order to ensure intensive development of crops, the supply of fertilizers to farmers will be improved, the standards applied to agricultural products upgraded, and the fumigation (disinfection) of exported and imported agricultural products strengthened.Private veterinary services will be expanded, and the somatogenetic-technical foul infrastructure of regional veterinary departments, phytosanitary services, sic protection stations and quarantine stations strengthened in order to improve veterinary and plant protection services. The restoration of fertility of pastures, their protection from erosion and their use will be improved to protect the lands, increase their quality and regulate the pasture load. The physical and technical resources of seed-growing, seedling and pedigree facilities will be strengthened to ensure their efficient operation.In order to provide the agriculture with high-quality specialists, the system of agricultural round training will be improved, the physical and technical resources of agricultural science strengthened, and trainings, run into sharing and scientific researches done to increase managerial skills and knowledge of farmers. Development of the agricultural sector does not only enhance employment oppurtunities and expand income generation sources for population groups working for this sector but also plays a key role in strengthening food security.Recent price rise at the world and local food markets did not pass over and affect population of the country, especially its poor groups, food supplying and living standards. From this prospective, reducing of the local food market dependence from importing and food supply to local population due to local production development has special improtance. In order to increase agricultural production and to improve food supply of the country population the State Program on Secure Food Supply to the world in the Republic of Azerbaijan for 2008-2015 was approved by the Presi dential Decree on August 25, 2008.With a view of food supply improvement first of all systematic activities will be implemented to develop agrarian business, more effectively use households production capacities, and upgrade consumption customs for advancement of the local foods consumption and production. 4. 3. 8. tourism Development In order to expand the opportunity to profit from the tourism potential in the country, to develop employment and self-employment in the regions and to better orchestrate activity in this sector, a State Programme on the Development of the touristry Sector for 2008-2016 was drafted.The legal and regulatory framework will be improved to promote tourism activity. Considering the importance of infrastructure in the development of tourism, the PIP envisages activities related to restoration of roads, communucations, and electricity and gas supply in the regions. In addition, ecotourism, rural tourism and other alternative types of tourism will be devel oped and tourist routes established to provide access to the countrys national, historicalcultural, socio-economical and natural features.The capacity of the newly established Tourism Institute and Mingachevir Tourism College will be developed under the SPPRSD to improve the ply training system for tourism and to supply it with high-quality specialists. In order to strengthen awareness-building and forwarding activites in the tourism sector, the performance of existing information centers will be improved and new 15 tourism information centers established in the Airport named afterwards H. Aliyev, the Gala village and Imishli, Ismayilly, Gabala and Masalli regions. Chapter 5 Employment Policy and Social Protection of the commonwealth 5. . Employment Policy and Labor Market Regulation 5. 1. 1. Link to Poverty Maintaining macroeconomic stability and ensuring economic growth, development of the non-oil sector lead to an increase in monetry income of the population. But in order to achieve poverty reduction, macroeconomic stability and economic growth need to be accompanied by policies which improve access of the poor population to work income and production assets. From this prospective system measures aimed at supporting business and promoting employment create favorable conditions for increased income generation opportunities.Employment related issues are outlined in the section above. These issues are also specified in relevant sections of the SPPRSD. This chapter focuses at reducing unemployment, improving social protection of the indolent, developing poke market as well as promoting employment for vulnerable groups of population. 5. 1. 2. Current Situation and Main Challenges It is well cognise that unemployment is a main factor which is associated with greater poverty risk. According to calculations made under the ILO methodology there were more than 281,100 unemployed people in 2007 or 6. 5% of the officious population.Considering the importance o f increasing employment opportunities in order to improve the populations welfare, under the State Program on Socio-Economic Development of Regions for 2004-2008 and other relevant programs about 672,000 new jobs were created. Business development and creation of job places in this period have contributed to implementation of the well thought employment strategy and social policy. Last 5 years nominal cash incomes of the population increased 2. 5 and reached to 14. 3 bln. AZN in 2005 or 1,690. 3 AZN per capita. Cash incomes of population included wages (31. %), business mesh (50. 4%), received current and grand remittances (17. 2%) and income from property (0. 5%). The government employment policy provides support to the unemployed through a combination of active voice and passive measures. The passive measures mainly include the provision of unemployment get aheads. In 2007, 2,523 unemployed received unemployment benefits minimum amount of which is 24 AZN. The active measures in clude organization of training courses and job fairs and many other activities aimed at creating and improving labor market and adjusting labor force to the economy needs.One of the main challenges is to further expand productive employment opportunities for population, especially in the non-oil sector. While share of the extractive industry in overall industrial production was 68% in 2007, it only employs 1. 1% of the labor force of the country. While employment creation will be achieved mainly through private sector development in the sectors outlined above, it will be important to continue to undertake measures to help match the skills of jobseekers with those in demand on the ram market.It is also important to ensure that employees rights are protected, and that there is reliable and regular data to allow monitoring of the labor market and employment situation. The improvement of wage regulation is another challenge. As was shown in the poverty results reported in Chapter 2, em ployment does not always protect individuals from poverty, due to the high number of low-paid and low-productive jobs. In recent years, a policy of increasing a 16 minimum wage to minimize the poverty risk among the employed has been pursued. Thus, the minimum wage has been increased, by stages, from 5. 5 AZN up to 60 AZN since 2003.Another problem relates to significant discrepancies between wage levels of those occupying the same positions in the public and private sectors. Thus in 2007 the average monthly wage in public sector was 171. 9 AZN and 296. 5 AZN, i. e. 1. 7 times higher in private sector. upbringing Health and social services winding Mining industry Generation and dispersion of electricity, gas and water supply 2006 86. 4 67. 2 198. 1 349. 4 134. 3 2007 144. 9 92. 5 298. 7 515. 5 210. 3 2006 128. 8 150. 7 403. 8 1,183. 2 272. 9 2007 186. 0 160. 7 454. 2 1,414. 8 198. 4 As Table 4. 1 shows, wages of people working in private health facilities are 1. , education 1. 3 times, construction 1. 5 times and mining industry 2. 8 times higher than those working in public ones. This leads to the flow of more hot staff from public facilities to private ones and has a negative impact on quality of services. 5. 1. 3. SPPRSD and Employment Policy The SPPRSD envisages activities in the following priority directions under the employment policy and labor market regulation developing the employment system and strengthening the social protection of the unemployed adjusting the training of specialists to labor market needs improving the regulation f labor relations strengthening labor market monitoring expanding employment opportunities of the vulnerable groups. As regards developing the employment system and strengthening the social protection of the unemployed, State Programme on Implementation Employment Strategy for 2007-2010 was approved on May 15, 2007 under the Presidential Decree 2167.Within the framework of activities envisaged by this State Programme the management system of the State Employment Service will be improved, and the legal and regulatory framework for employment and work safety upgraded. Also, a single information database will be created to expand regular access of jobseekers and unemployed to vanity information, and related awareness-building measures carried out among the people. At the same time, new consulting services and labor exchanges will be established.More official attention will be given to the vocational trainings aimed at providing job for the unemployed. The minimum amount of unemployment benefit will be gradually adjusted to the national subsistence minimum in order to further strengthen the social protection of the unemployed. Meantime in order to prevent inactivity and dependency of job seekers caused by growth of benefit it is envisaged to hold monitoring and to align gradual adjustment with efforts on retraining of job-seekers.As for adjusting the training of specialists to labor market needs b y his Decree 2282 dated of July 3, 2007 the President of the country approved the State Program on Development of vocational Education in the Republic of Azerbaijan for 2007-2012. It is important to implement following measures in the vocational education section under SPPRSD establishing direct relations between vocational education system and employers and training of specialists required by employers 7 launching creation of the National Specialities Structure (NSS) based on the European system of specialities, comparable internationally and with national context shaped by the development of local economy and social sphere. NSS is a locally and internationally accepted multistage system used for measuring the training results (both dinner gown and informal) which are interrelated and where ratio between all education and training diploma/certificates is established, i. e. nterrelated achievements made by trainees and graduates are mensural through certificates and diplomas. In this sector a forecasting system will be established and marketing services organized in the educational institutions training skilled workers. Also, in order to develop the handsome education system, the appropriate legislative framework will be prepared, a body of boastful educators formed, new curricula developed, and resource centers organized for career-guidance and awareness-building purposes.The adult education system will cover the following directions educating the adult unemployed, upgrading their skills, providing social and psychological adjustments, preparing for employment in new sectors updating knowledge and skills of the adult employees, conducting diversion and retraining courses for them in order to increase their intellectual and scholar level placement study and social adaptation of the adult IDPs and refugees delivering training to the adult disabled that will promote to their re-integration.At the same time, a database will be created and the existing stat istics improved in order to ensure efficiency and sustainablity of adult education measures. Effective arrangements within this system will help citizens to participate in economic and social life especifically to those moved(p) by economic restructuring to acquire new skills which will make them more competitive on the labor market. As regards improving the regulation of labor relations, an Action program will be developed and implemented for legalization of informal labor relations, as well as, control over finis of collective agreements and contracts strengthened.Such issues as provision of employment and social protection of workers will be further focussed in the above mentioned agreements and contracts. Minimum wages will be gradually increased up to the national subsistence minimum and since 2011 it will exceed that minimum. It will become a substantial factor in elimination of the poverty riskis. The wage system for staff of budget-funded organizations will be improved wi th consideration of enhancment their financial familiarity and responsibilities as well as promotion of final outcome of this system in order to eliminate disbalance between wage levels aimed at improving overall wage policy.Measures related hereto will be aligned with those one in Chapter 4 of the SPPRSD that cover introducing normative (per capita) financing in fiscal policy. Also, wage supplements for geographic location and other difficult working conditions will be introduced, and principles identified for unification and payment of wage supplements and bonuses to staff in the public sector. As for strengthening the labor market its regular monitoring will be carried out, and a national information system on the labor market, employment, labor safety regulations and standards established in order to help flexible policy making in this area.Furthermore, labor migration management system will be improved. 18 As concerns expanding employment opportunities of the particularly vuln erable groups, an Action excogitation will be prepared for the development of entrepreneurship and self-employment among women and their retraining, also business training programs will be arranged, and measures introduced to improve labor conditions and social protection of those employed in the private sector, especially women.At the same time, an Action excogitation will be prepared to improve gender equality in those sectors where there is a clear gender imbalance, and new jobs created for the population groups in urgent need of social protection. For this purpose, the ILO Convention on employees with family responsibilities will be ratified and the national legislation adjusted to the Convention. 5. 2. Social Protection of the Population 5. 2. 1.Link to Poverty International discover suggests, while long term poverty reduction will be achieved through economic growth coupled with increasing employment and income generating opportunities in all regions of the country and diff erent sectors of the economy, there will always be vulnerable members of society who will depend on the state system of social protection to help protect them from poverty. The state has a duty to allow these vulnerable groups effective social protection.Social protection is one, but not the only, mechanism for ensuring that some of the countrys wealth is redistributed from the richest to the poorest sections of society. It should be noted that social protection cannot offer any long term solutions to help vulnerable to exit from poverty. International experience suggests that disproportional oversaturation of the social protection sector generate dependency syndrome among people. As a result it affects economic activity and impedes development. In the wide sense there are 3 main elements of social protection. One is a social insurance element, which is designed to elp citizens prepare for times in their lives when they will not be able to earn their own living, e. g old age, sickn ess, and unemployment. Social insurance pensions or benefits are based on payments/contributions made by individual citizens during their working years, with some contribution from employers. The other element of the social protection is a social assistance system which consists of targeted state aid and social allowances and is material support paid from the state budget for those who have no insurance, other sources of income or their income is below the established rates.The third element of the social protection is a social assitance and special social measures system addressed to the especially (socially) vulnerable population groups, i. e. IDPs and refugess, children deprived of maternal(p) care, disabled and children with limited health, old and alone citizens, etc. 5. 2. 2. Current Situation and Main Challenges Important measures have recently been undertaken in Azerbaijan to bring the social protections system in line with modern requirements.As a result of these purposefu l measures the separation of the insurance and pension system from