The recent global shocks and crises have particularly impacted the economies of low and middle-income countries, according to Azerbaijan in Focus, reporting Trend.
Recent studies on poverty trends have shown a worrisome situation. The COVID-19 pandemic has been a key factor in an unprecedented setback to global poverty reduction efforts, causing the most significant increase in poverty levels in the history of poverty monitoring.
According to data from 2023, 1.1 billion out of 6.1 billion people in 110 countries are living in conditions of acute multidimensional poverty. In countries with middle-income levels, this negative trend affects 730 million people.
Notably, among the 17 UN Sustainable Development Goals (SDGs), the top priority is the universal eradication of poverty in all its forms. It’s essential to ensure social protection for vulnerable groups to effectively reduce poverty. Taking Azerbaijan as an example, the success formula for social policies implemented over the past 20 years is clear, ultimately enabling the country to triumph over poverty.
Thus, Azerbaijan’s poverty rate decreased from 44.7 percent in 2003 to 5.2 percent (by 8.6 times) in 2023. Meanwhile, the population living in poverty conditions decreased sevenfold, from 3.7 million people to 528,000 people.
One of the central issues in President Ilham Aliyev’s policy is the human factor. Any economic development that does not contribute to improving people’s lives cannot achieve its goal. In this sense, improving social well-being and people’s lives is one of the main goals of this policy.
Significant steps are being taken to improve the living standards, whether through increasing wages, and pensions, or enhancing the social protection system for low-income families – these are achievements of the social policy implemented in Azerbaijan.
Over the past 20 years, social insurance payments have increased 18 times, from 376 million manat ($221 million) to 6.3 billion manat ($3.7 billion). Social expenditures have increased 19.3 times, from 678 million manat ($398.8 million) to 13.1 billion manat ($7.7 billion).
During the above period, pensions for martyr families in Azerbaijan have increased from 100 manat ($59) in 2007 to 600 manat ($352.9) in 2023, marking a sixfold increase. The annual sum of pensions has increased from 194 million manat ($114 million) in 2003 to 5.7 billion manat ($3.3 billion) in 2023 (a 29.4 times increase).
The average monthly pension has increased 18.2 times, from 24 manat ($14) in 2003 to 436 manat ($256) in 2023. The minimum monthly pension amount has increased 14 times over the past 20 years, from 20 manat ($11.7) to 280 manat ($164.7). The average monthly amount of targeted social assistance has increased from 37 manat ($21.7) in 2007 to 485 manat ($285.29) in 2023 (a 13 times increase).
Certainly, further improvement in people’s well-being goes beyond just increasing salaries, pensions, and allowances. One of the most crucial issues in this direction is ensuring employment for the population.
Fortunately, unprecedented achievements in economic development in recent years have created conditions for the successful implementation of this goal.
Azerbaijan is effectively solving unemployment issues, taking significant steps in this direction. Since 2004, due to the successful implementation of provisions outlined in adopted state programs related to the socio-economic development of the regions of Azerbaijan, sustainable development of the non-oil sector of the economy has been ensured.
The volume and quality of the provision of communal services and social infrastructure in the regions have increased, large-scale projects in priority areas have been implemented, and investment direction has led to the opening of new enterprises and jobs.
Over the past 20 years, the unemployment rate has decreased by 3.7 percentage points, from 9.2 percent to 5.5 percent (from 400,900 people to 286,400 people).
More than 90 percent of new jobs are in the private sector, with a significant portion created in the non-oil sector. The predominant sectors include construction, manufacturing, processing industries, provision of services to the population, and other areas.
The average nominal monthly salary has increased 12 times, from 76.8 manat ($45) from January through November 2003 to 923.1 manat ($543) for the same period in 2023. The minimum wage has increased 38 times, from nine manat ($5.29) in 2003 to 345 manat ($202.9) in 2023. The number of employment contracts has increased by 38.5 percent, from 1.3 million in 2017 to 1.8 million in 2023.
Government programs aimed at socio-economic development in regions have played an unprecedented role in poverty reduction. Balanced regional development has led to the opening of numerous industrial, processing, and service enterprises not only in major cities but also in rural areas. The issue of employment for thousands of people has been addressed by revitalizing forgotten and degraded agricultural territories. Since 2004, tens of thousands of new enterprises have opened in the regions, creating millions of jobs.
The recent-year initiatives, including the implementation of the self-employment program and the creation of government jobs, have also contributed to poverty reduction. Thus, people, with the assistance of the government, are establishing their own businesses.
Employment has increased by 25 percent, from four million people in 2003 to five million people in 2023. The number of economically active population has grown by 20 percent, from 4.4 million people to 5.3 million people. The annual amount allocated for employment programs has increased from seven million manat ($4 million) in 2018 to 525 million manat ($308.8 million) by 2024 (a 75 times increase).
To formulate a long-term state employment policy aimed at ensuring effective employment based on existing demographic trends and the country’s economic priorities, the ‘Employment Strategy of the Republic of Azerbaijan for 2019-2030’ was approved by the decree of President Ilham Aliyev on October 30, 2018.
On October 2, 2023, President Ilham Aliyev, addressing the opening ceremony of the 74th International Astronautical Congress, noted that the fair distribution of national wealth today is seen by international experts and most importantly by the people of Azerbaijan.
“One of the big challenges in the beginning of our independence was poverty, which was endemic. 20 years ago, the percentage of people living in poverty was close to 50. Now it is 5.5%, which actually demonstrates that natural resources, which we accumulated and which we brought to international market were properly managed. And the fair distribution of national wealth today is seen by international experts and most important by the people of Azerbaijan. So, all these actually demonstrate that the country is well-established. Political, economic and social stability is an important factor of our development, because it’s clear that if situation is not stable and is not predictable, you cannot expect investors to come and to risk their capital,” said the head of state.
Azerbaijan’s achievements in the social sphere are the result of comprehensive reforms and the implementation of a multi-level system of social support for vulnerable population groups. Of course, without a strong and sustainable economy, it’s impossible to ensure an improvement in the standard of living and the welfare of the population.
Thanks to a visionary and multifaceted economic policy, Azerbaijan is now at the center of regionally significant projects, thereby ensuring a flow of funds into the country. It’s the fair and rational distribution of state funds today that has allowed Azerbaijan to achieve the highest results in the implementation of social policies, with a focus on the human factor.
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