Weekly economic review
Last week, under the order of Azerbaijani President Ilham Aliyev, the Law on Subsistence Wage for 2009 and the Law on Need Criterion for 2009 were been ratified. Next year it is planned to increase the need criterion for targeted social aid recipients from AZN 55 to AZN 60.
Thus, those, whose average monthly incomes for the reasons not depending on them (unemployment, the loss of breadwinner, the loss of ability to work so forth) are less than AZN 60 will have the right to obtain of targeted social aid starting from the next year.
Under the decision of the Cabinet, the need criterion for targeted aid, which is issued from 1 Jul 2006, was originally set at AZN 30.
Those countries practicing the targeted system connect the need criterion with the index of the cost of living. This can be 100% coordination, when this minimum is the criterion of need or sometimes even 60-70% coordination. Today the criterion of need in Azerbaijan which equals to AZN 60 corresponds not to united social index. Thus, minimum wage and base part of the labor pension compose AZN 75 (since Sept. 1, 2008), and upon the order of the President, the cost of living will compose AZN 84 starting from 2009 as compared to the present AZN 70. In this case, the cost of living for the labor force will compose AZN 92, pensioners - AZN 65, and children - AZN 69.
Certainly, the government of Azerbaijan impose task to gradually bring the criterion of need to the cost of living. However, in this stage none of these indices answers the price parameters. Upon the unofficial calculations, the cost of living for the labor-capable population must be AZN 113, for the 15-year adolescents - AZN 102 and for the pensioners - AZN 84.
The chairman of Azerbaijan Parliament's commission on economic policy Ziyad Samadzade said that in several years it will be necessary to give up criterion of need, since the social-economic life in improving in Azerbaijan.
In addition, the number of recipients will be increased to 190,000 families. Their number will be brought to 160,000 families by the end of 2008, while in 2006 the number was 40,000.