Social sector in Azerbaijan (january-september 2013)

Analysis Materials 8 November 2013 17:33 (UTC +04:00)

September 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.

The salaries, pensions and other social benefits have been increased since September 2013 in accordance with the decrees signed by President Aliyev.

This very important social package of measures covered about 3 million Azerbaijani citizens, the majority of them - employees of budget organizations, particularly in education (422,000 people), health care (around 140,000 people). The salaries of the social welfare organizations, scientific organizations, cultural organizations, youth and sports organizations were increased.

According to the signed decrees, the salaries of 700,000 employees of the organizations financed from the state budget were increased.

The monthly official (tariff) salaries of employees of the Ministry of Justice, the Ministry of Emergency Situations, the Ministry of National Security, the Special State Protection Service having particular ranks and civilian employees, who are not public servants, were increased.

The monthly official (tariff) salaries of employees of the Interior Ministry having particular ranks and civilian employees of the Interior Ministry, who are not public servants, were increased.

The amounts of the monthly benefits paid to displaced persons to pay for food, as well as disabled veterans, etc. were increased. The scholarships of people working for doctor's degree and students were also increased.

The basic part of labor pensions and the minimum wage were increased.

The amount of benefit paid to the individuals who are on partially paid leave for child care.

A monthly allowance is determined to the amount of 30 manat, while a monthly allowance for child care from 1.5-3 years old - to the amount of 15 manat.

Population's income

According to the Azerbaijani State Statistics Committee, in January-September 2013, the nominal income of the population totaled 25.393.6 billion manat, which is 7.6 percent more compared to January-September 2012.

Thus, during this period, the nominal income of the population per capita increased by 6.2 percent and hit 2.736.5 manat.

Major indices, characterizing income of the population


Jan.-Sept. 2013

Compared to Jan.-Sept. 2012, percent

Nominal income of population, in mln manat



Per capita, manat



Income of population, in mln manat



Per capita, manat



Source: State Statistics Committee

Azerbaijani citizens spent 68.5 percent of income on goods and services, 9.1 percent - to pay for taxes, duties, social and insurance fees, 1.7 percent - to pay off the loans and interest, 20.7 percent - to accumulate the capital in January-September 2013.

The population's income after paying all required fees and membership fees made up 23.078.7 billion manat, which is 7.5 percent more than in January-September 2012. Real income per capita increased by 6.1 percent to 2.487.1 manat.

The population's money expenditure amounted to 20.137.11 billion manat in January-September 2013 or 5.256.49 billion manat less than the income of the population, but by 16.08 percent more than the expenditure in January-September 2012 (according to the State Statistics Committee, Trend calculations)


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-August 2013 comprised 413.8 manat or 6.8 percent more than in January-August 2012.

As of this period, the average salary of temporary staff was 302.1 manat, while employees involved upon civil contracts - 323.1 manat.

Remuneration in the oil sector reached 1.556.4 manat per month, the non-oil sector - 383.6 manat, the public sector - 333.1 manat, the private sector - 537.6 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 99,400 people were involved in the Azerbaijani construction sector in January-August 2013. The nominal wages in the construction sector amounted to 611.3 manat, which is 6.8 percent more than in the same period of last year.

The average salary in state-owned companies amounted to 496 manat (with an increase of 8.3 percent per year), private companies - 665.2 manat (with an increase of 2.7 percent).

The level of wages in the construction of buildings increased by 1 percent per year - an average of 558.6 manat, specialized construction (increased by 4 percent) - up to 743.4 manat, civil construction operations increased by 37 percent - up to 589.9 manat.

The telecommunications sector of the Azerbaijani economy and the oil sector are at the same level in terms of wages.

According to the Azerbaijani Communications and IT Ministry, the average wage in the private telecommunication sector reached 1.421 manat per month. Moreover, in general, the average wage is 669.6 manat in the ICT sector, 771.8 manat in the telecommunications sector, 218 manat in the postal sector, 348.4 manat in the enterprises under the Ministry.

Labor market

As of October 1, 2013, the economically active population totaled 4.742 million people, of which 4.504.4 million people were engaged in labour activity.

Thus, as of September 1, the number of hired employees hit 1.491.9 million people, including 894,200 people worked in the public sector, and 597,700 people - in private sector.

The number of people working in the oil sector amounted to 37,500 people, in the non-oil sector - 1.454.4 million people. Around 1.449.6 million people among hired employees work in non-agricultural sphere.

As of October 1, around 22.1 percent fall to the hired employees involved in the production spheres: 7 percent in construction, 6.2 percent in manufacturing industry, 2.9 percent in agriculture, forestry and fishing, 2.5 percent - in the mining industry, 2.1 percent - in the production and distribution of electricity, gas and steam, 1.4 percent - in water supply, waste recycling, 22.8 percent in education, 18.8 percent - trade, repair of vehicles, 8.8 percent - medical and social services, 6.6 percent in state governance and defense, social maintenance, 4.9 percent - transportation and warehousing, 3.8 percent - recreation, entertainment and arts, 3.7 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 October 1, 2013, around 36,900 people were officially registered as unemployed in Azerbaijan, including 41.4 percent of women. The number of unemployed in the country increased by 1 percent since early 2013 (36,791 people as of early 2013).

The average unemployment benefit in Azerbaijan is 238.2 manat. It has been increased by 6.3 percent since early 2013.

As of October 1, 2013, the largest number of unemployed was registered in Baku (13,425 people, of which 289 people received unemployment benefits) and eighteen regions of Aran economic region (10,056 and 181 people respectively).

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

Individuals with unemployed status

Individuals receiving unemployment benefits




Absheron region






























Source: State Statistics Committee

The unemployment benefit increased by 8.9 percent in Azerbaijan in September 2013 compared to August. Taking into account the increase in consumer prices per month (0.1 percent), the real benefit increased by 8.8 percent. The average unemployment benefit is 259.5 manat in Azerbaijan. The allowance has been increased by 15.9 percent since early 2013.

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.

Around 88,500 new jobs were created in Azerbaijan in January - September 2013.

The entrepreneurship development has become a priority of the economic policy implemented in the country. So, the legislation is being improved, the administrative procedures are simplified and transparent mechanisms are used to improve the business climate. Currently, the state agencies render 426 kinds of electronic services. The development of the activity of ASAN service also contributes to the development of entrepreneurship in Azerbaijan. The events aimed at improving living standards and developing human capital, defined as the main goal of socio-economic development of Azerbaijan are underway.

Pension and social provision

Azerbaijan ranks third in terms of the basic part of the labour pension worth $128 in the CIS after Kazakhstan ($185) and Belarus ($129).

Azerbaijan is ahead of Russia on this index, where the basic pension is $109.3 and Ukraine ($111.8).

The President has signed eight decrees on increasing the basic part of the labour pension and seven decrees - on indexation of its insurance part since the new pension-insurance system in Azerbaijan from 2006 to the present day.

The basic part of the pension increased by 17.6 percent - up to 100 manat since September 1, 2013 after the last similar decree.

The average monthly amount of the basic pension increased by 9.2 times - from 18.4 manat to 170 manat ($ 217), the minimum amount - 7.1 times - from 14 manat to 100 manat ($ 128), replacement rate relative to old-age pensions (the average amount increased to 190 manat or $243) - from 29.3 percent to 45 percent compared to early 2003.

Such dynamics of growth is the highest among the four countries with a relatively high amount of pensions in the CIS and even exceeds the pension growth rate in Kazakhstan by 1.4 times, which ranks second in line with this dynamics of growth.

The creation of the mechanism of increasing the pensions on the basis of the modern standards, the simultaneous increase in the basic parts for all pensioners and the indexation of the insurance part in accordance with the inflation level have created the conditions for equitable distribution of existing financial opportunities among all retirees, the State Social Protection Fund said.

As a result of the recent dynamic of reforms, Azerbaijan's pension-insurance system is operating on the modern automated basis today. Thus, the number of electronic services rendered by the State Social Protection Fund has reached 21. According to the statistics from the "electronic government" portal, they are among the most frequently used by the population of the country.

The Fund assigned pensions ​​in an automated regime to 356 people for the last two months, of which 135 people live in Baku and 221 - in the regions.

It was possible to automate the process of collecting compulsory social insurance contributions by using the individual account. Today, the individual registration system covers 2.62 million people. Thanks to the work of the system, the Fund managed to automate the assignment of pensions for the first time in the CIS and Eastern Europe.

Around 99.5 percent of pensioners in the country receive pensions through plastic cards. There are 701 ATMs in the country, as well as 159 were installed in the villages and settlements in the country's regions.

According to the Azerbaijani Ministry of Labor and Social Protection, currently more than 310,000 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.