The level of poverty in the country is the important indicator of the social situation and a criterion of welfare in the society. Today taking into consideration that the population of Azerbaijan makes up 8.5mln today, 1.3mln citizens of the Republic live under poverty (according to official data). It not a small indicator, but alongside with it over last years there were the certain positive shifts in reduction of poverty. As a result of 2007 the level of poverty in the Republic has decreased from 20% to 16%, from 29% to 20% in 2006, and at the end of 2004 the poor population of the country made up 49%.
But, despite the progress, almost a quarter of the population still live in poverty, having incomes less than the established living wage. According to date by the State Statistics Committee, in January - April the monthly average salary in Azerbaijan totals $288. As compared to the same period of 2007, the growth of the salary has made 123%. According to the forecasts of the Government, up to the end of year, the wages should raise up to $335s. Thus, the official statistics approves that the ordinary Azerbaijanis spend 67.9 % of received money on foodstuffs and payment of services, and the rest of 23% go on accumulation. Certainly, it is impossible to live in grand style through this money under impetuously growing prices for essential commodities. For example, the loaf of white bread in weight of 600-700g costs nearly $0.48.
For comparison, abroad the wages correspond to the living wage of a family. That is, the living wage of not one member of family, but all family is taken into account there. Now 37% of the able-bodied women living in Japan and in the countries of Europe and America do not work because the amount of wages of the head of the family quietly satisfies family's requirements. The American living wage, according to all available information from this country, makes about $800 for the single or $1600 for family from three person.
Therefore the government of the Republic every year takes measures on reduction of poverty. Measures on reduction of poverty are both the purpose and means of development. The State Program on Socio-Economic Development of Regions, designed for 2004-2008, has already brought many positive results. Over the past four years, gross domestic product has increased by two times and the consolidated budget - 10 times. It promoted opening of 668,000 new workplaces, 480,000 of which became constant jobs. Some 80 % of them of them were open in regions.
First of all the present indicators of poverty in Azerbaijan are connected to the Armenian-Azerbaijani conflict, presence of more than one million refugees, but still there are poor people amongst other categories of the citizens, for example, those who concern to the number of the unemployed although the tendency of reduction of the registered unemployed is observed every year, especially since April 2006. So, as of 1 May 2008, in bodies of employment service 45181 persons from free labour activity have consisted on the account, that is 14.5% less as compared to January - April 2007. The average amount of the unemployment allowance in April 2008 totaled AZN 105.8 that makes up 44.55% of the monthly average salary of workers.
Other factor influencing the level of poverty in Azerbaijan is the number and condition of pensioners. As of 1 April 2008 1,252,400 pensioners were registered by the State Social Protection Fund of Azerbaijan (last year their number made up 1,226,000). They make up 15% of country's general population.
The monthly average amount of the pension has grown as by 24% as compared to the same period of the last year and totaled AZN 76.41. Thus, the average pension made up only 33% of the average wages. In medium-term prospect Azerbaijan tries to increase the average pension up to average wages. Already in the beginning of second half of year, one more increase of the minimum up to AZN 70 is expected. Since 1 January 2008 it has been increased up to AZN 60. However, according to the current legislation, indexation of pensions occurs only in accordance size of inflation which in January to April has already made up 17.8% (against 16.5% in 2007) i.e. real amount of the pension actually does not vary.
In Azerbaijan it is possible to increase the list of poor people, including there the invalid pensioners, children, refugees, single mothers. According to the data provided by the Ministry of Labour and Social Protection, in the first quarter of 2008, 276,400 people were given social allowances in amount of AZN 6,460,100. Thus 19,600 people receive allowances due to age, 85,700 - physical inability, 29,100 - loss of the head of the family, the number of children of up to 18 years of age with the limited opportunities of health made up 54,900.
As of 1 April of the current year, in the country the number of people receiving the targeted social aid equaled 395,000, the amount of the social aid for each person totaled AZN 17.81. Firstly 56577 families (72.3 %) receive aid from the State. Accordingly, such number of the citizens lives below the level of need criteria.
Thus, the Ministry of Labour and Social Protection of Population of Azerbaijan determined the amount of the targeted social aid for one person in the country at $55 per month against $20.45 in the end of December 2007 (for one family - $94,15). The criterion of need in the targeted social aid in Azerbaijan totals AZN 45. The Cabinet of Ministers has prepared a project of the order increasing the amount of criterion of need by AZN 10 within the framework of the targeted social aid from 1 July. As a result the targeted social aid will be raised up to AZN 55.
Overcoming the poverty is a long process during which the tasks vary and criteria of measurement of poverty are specified. The tendency on reduction of poverty will be continued because the Government has prepared a new poverty reduction and economic development program designed up to 2016. The program is being directed towards decreasing the level of poverty in Azerbaijan up to the level like in the economically developed countries by 2015.
In addition, in connection with the completion of the 2004-2008 State Program on Socio-Economic Development of Regions, the President of Azerbaijan has tasked to devise a new similar program for 2009-2013. The basic difference of the new State program is more detailed approach to the solution of problems which in particular will deal separately with each village. Inter-regional relations that are very important factor of regional development will be taken into consideration here as well.
Taking into consideration the solution of these problems, according to the forecasts of the Ministry of Economic Development, in 2025 the incomes of population will total more than $8,000 per year, and on a par, the purchasing capacity will equal $20,000. By this time, probably, we will not have poor people.