Social sector in Azerbaijan (January-July 2013)

July was marked this year as the month of social innovation. This month, the President has signed a number of decrees and orders aimed at improving living standards and further strengthening the social protection of the population. In particular, Azerbaijani President Ilham Aliyev signed an order to increase the monthly official (tariff) salaries of servicemen and civilian employees of the Ministry of Defense, who are not public servants.

The monthly official (tariff) salaries of servicemen and civilian employees of the Ministry of Defense, who are not civil servants, were increased by an average of 10 percent to strengthen social protection of civilian employees who are not civil servants and servicemen of the Ministry of Defense's departments, funded from the state budget.

Population's income

According to the Azerbaijani State Statistics Committee, in January-July 2013, the nominal income of the population totaled 18.914.4 billion manat, which is 7.2 percent more compared to January-July 2012.

Thus, during this period, the nominal income of the population per capita increased by 5.8 percent and hit 2.040.8 manat.

The fact that the depositors of the Bank of Azerbaijan Republic of the Savings Bank of the former Soviet Union were provided with payments over the period played its role to increase the population's income. Around 93 percent or 555 million manat of this amount has been paid for seven months in 2012, while 42 million manat - in the first half of 2013.

Major indices, characterizing income of the population

Indices

Jan.-July 2013

Jan.-July 2012, percent

nominal income of population, in mln manat

18914,4

107,2

Per capita, manat

2040,8

105,8

Income of population, in mln manat

17164,8

107,2

Per capita, manat

1852,0

105,9

Source: State Statistics Committee

Azerbaijani citizens spent 68.9 percent of income on goods and services, 9.3 percent - to pay for taxes, duties, social and insurance fees, 1.6 percent - to pay off the loans and interest, 20.2 percent - to accumulate the capital in Jan.-July 2013.

The population's income after paying all required fees and membership fees made up 17.164.8 billion manat, which is 7.2 percent more than in January-July 2012. Real income per capita increased by 5.9 percent to 1.852.0 manat.

The population's money expenditure amounted to 15.093.6 billion manat in January-July 2013 or 3.820.8 billion manat less than the income of the population, but by 12.2 percent more than the expenditure in January-July 2012 (according to the State Statistics Committee, Trend calculations).

Salary

The salary is one of the key social and economic indicators, which sufficiently enough characterizes the level of the prosperity of the working part of the population. According to the Azerbaijani State Statistics Committee, the hired employees' average monthly salary in Azerbaijan in January-June 2013 comprised 410.8 manat or 6.8 percent more than in January-June 2012.

As of June 2013, the average salary of temporary staff was 310.7 manat, while employees involved upon civil contracts - 316.5 manat.

Remuneration in the oil sector reached 1.551.1 manat per month, the non-oil sector - 380.8 manat, the public sector - 330.5 manat, the private sector - 534.9 manat.

The highest salary was observed in the mining industry, financial, information and communication, scientific and technical activity, as well as the construction sectors.

Around 97,600 people were involved in the Azerbaijani construction sector in January-June 2013. The nominal wages in the construction sector amounted to 605 manat, which is 7.2 percent more than in the same period of last year.

The average salary in state-owned companies amounted to 491 manat (increasing by 10.2 percent per year), private companies - 659.5 manat (with an increase of 2.4 percent).

The level of wages in the construction of buildings increased by 1.8 percent per year - an average of 560.5 manat, specialized construction (increased by 4.6 percent) - up to 737.1 manat, civil construction operations increased by 38.4 percent - up to 560.3 manat.

Labor market

As of August 1, 2013, the economically active population totaled 4.729 million people, of which 4.489.5 million people were engaged in labour activity. Thus, as of July 1, the number of hired employees hit 1.490.3 million people, including 891,800 people worked in the public sector, and 598,500 people - in private sector.

The number of people working in the oil sector amounted to 37,800 people, in the non-oil sector - 1.452.5 million people. Around 1.447.5 million people among hired employees work in non-agricultural sphere.

As of July 1, around 22.8 percent fall to the hired employees involved in the production spheres: 7.3 percent in construction, 6.7 percent in manufacturing industry, 2.9 percent in agriculture, forestry and fishing, 2.5 percent - in the mining industry, 2 percent - in the production and distribution of electricity, gas and steam, 1.4 percent - in water supply, waste recycling, 22.5 percent in education, 18.6 percent - trade, repair of vehicles, 8.8 percent - medical and social services, 6.5 percent in state governance and defense, social maintenance, 4.9 percent - transportation and warehousing, 3.9 percent - recreation, entertainment and arts, 3.5 percent - professional, scientific and technical activities, 1.8 percent - communication and information, 1.8 percent - financial and insurance activities, 0.8 percent - real estate transactions, 1.6 percent - administrative and additional services, 1.4 percent - tourist accommodation and food and 1.1 percent - other areas.

As of August 1, 2013, around 37,200 people were officially registered as unemployed in Azerbaijan, including 41.5 percent of women. The number of unemployed in the country increased by 1.2 percent since early 2013 (36,791 people as of early 2013).

The average unemployment benefit in Azerbaijan is 222.6 manat. It has been decreased by 0.6 percent since early 2013.

As of August 1, 2013, the largest number of unemployed was registered in Baku (13,427 people, of which 467 people received unemployment benefits) and eighteen regions of Aran economic region (10,071 and 365 people respectively).

Distribution of unemployed individuals and those who receive unemployment benefit in towns and regions as of August 1, 2013 (people)

Individuals with unemployed status

Individuals receiving unemployment benefits

Baku

13427

467

Absheron region

1572

302

Ganja-Gazakh

2384

205

Sheki-Zaqatala

1215

103

Lankaran

1115

104

Guba-Khachmaz

1151

79

Aran

10071

365

Upper-Karabakh

3710

99

Kalbajar-Lachin

1465

46

Shirvan

1056

56

Nakhchivan

-

-

Source: State Statistics Committee

The state employment program for 2011-2015 is being executed now. The purposeful state policy in this area has allowed eliminating tension on the labor market. Thus, the State Employment Service tries to contribute to the employment of Azerbaijani population. The State Service provided about 270,000 people with jobs in 2003-2013. Over 30,000 people attended the professional training courses.

Pension and social provision

According to the initial data of the Azerbaijani State Social Protection Fund, the Fund's expenses amounted to 1.449.5 billion manat in January-July. The payments for financing the pensions and allowances amounted to 1.421.3 billion manat in the reporting period or 25.8 million manat, or 1.8 percent more than the payments for the same period of last year.

The expenditure for pension provision increased by 1.8 percent or 23.9 million manat, amounting to 1.386.8 billion manat compared to the same period of last year.

In general, the Azerbaijani Social Protection Fund's revenues for January-July 2013 increased by 2.3 percent or 34.8 million manat and hit 1.534.5 billion manat compared to the expected indices.

During the reporting period, the income for the compulsory state social insurance increased by 12.8 percent, or 100.4 million manat compared to the same period in 2012 and by 31 million manat (3.6 percent), amounting to 885.4 million manat compared to the forecast.

Around 552.3 million manat or 62.4 percent of revenues for compulsory social insurance fall to the off-budgetary sector. The contributions paid by the sector increased by 19.5 percent, or 90 million manat compared to the same period of last year and by 96 million manat (by 21 percent) compared to the forecast.

The work was intensified to attract physical entities engaged in business and land owners to social insurance in the reporting period. As a result, revenues from entrepreneurs increased by 48.7 percent and by 36.7 percent from landowners.

The revenues from the budgetary organizations hit 333 million manat in January-July 2013. The level of income allowed to timely finance pensions and benefits.

The population received the allowances worth 34.4 million manat in January-July. Around 31.1 percent fall to the benefits for pregnancy and birth, 29.8 percent - for temporary disability, 15.4 percent - benefits for the funeral, and 23.7 percent - other benefits.

According to the Azerbaijani Ministry of Labor and Social Protection, currently more than 310 million people receive monthly social benefits in Azerbaijan.

There is the traditional system of social benefits in Azerbaijan. Their amount increased by 2.5 times over the past 10 years. The Institute of Grants under the Azerbaijani President was established for certain categories of citizens having special services to the country.

Over the past period, grants were assigned to 35,000 people, including members of the families of martyrs and disabled veterans according to various decrees and orders of the president.

More than 1,700 people and members of their families have received the lump sum allowances in connection with the work injury or death resulting from such injuries since 2008.

Over one billion manat has been spent since the targeted social assistance was issued in Azerbaijan (since 2006). According to the research in Khachmaz region and Nizami district of Baku, the amount for each family varies from 1,100 manat to 1,600 manat. The funds received within the "Self-Support" project were invested in economic activity. The monitoring confirmed that the time has come to pass from the targeted social assistance to "Self-Support" project.

As of July 1, 2013, targeted social assistance is issued for 531,885 people from 904 families monthly. The average amount is 120 manat.

Azerbaijan has passed to a system of targeted social assistance since 2006. The amount of targeted social assistance is determined proceeding from the difference between the "criterion of need" and the amount of income per family member. It hit 84 manat in 2012 (in 2011 - 75 manat). In 2013, the criterion of need was increased to 93 manat.

Two years ago, the ministry started to test an alternative mechanism for issuing targeted social assistance. "Self-Support" program has been completed for 111 of 271 families in 13 regions of the country.

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