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WEEKLY ECONOMIC REVIEW

Analysis Materials 20 September 2006 12:02 (UTC +04:00)

The Turkish Minister for Labor and Social Security, Murad Basheskioglu arrived in Baku last week. He participated in the 3rd meeting of the joint permanent commission for the co-operation with regards to labor and social protection between Azerbaijan and Turkey that started on September 14 in Baku.

The Turkish Minister got familiar with social reforms in the fraternal country following the appointment of a new Minister, introduction of new functions, new mechanism of targeted social assistance in Azerbaijan.

The meeting is expected to focus on the implementation of the agreement reached during previous meetings in Turkey in 2005 and prospects of the co-operation. It was decided to hold a full inventory of work done, involving many issues, exchange of specialists and information, joint participation at international forums, conferences, joint international projects, joint work with international organizations such as International Labor Organization. There are many prospects available with the assistance from our ministries especially those who have joint authorities and functions, particularly regarding labor, social protection and migration. Among the new directions of co-operation, the Minister mentioned the development of the development mechanism of addressed social aid, work with teenagers, homeless children, human trafficking.

Any support by an experienced partner is regarded as a valuable present. The system of pension provision and social aid has developed vastly in Turkey. But it needs to define how they determine the criteria of poverty and other criteria

Next year the Azerbaijani Government will only marginally increase criteria of needs' for targeted social assistance. The Cabinet of Ministers has defined the criteria of need' for targeted social assistance, which has been distributed since 1 July 2006 in the amount of 30 manats (150,000 old manats).

The Azerbaijani Deputy Minister for Labor & Social Security, Ilgar Rahimov, said that it is necessary to consider the issue of this increase very seriously. We must weigh all macro-economic indices, draw attention to the growth rate of inflation, money mass, increase of salaries, pensions, so as to avoid inflation. In compliance with the forecast of the Labor Ministry, in 2006, the targeted social assistance will be issued for 50,000 families (250,000 people). For the moment the targeted social assistance comprises of 10-11 manats per person, which could also cause inflation

The Ministry is studying the issue and several proposals are made for the 2007 forecasts, depending on the inflation and macro-economic indices. If we were to increase the amount to 50-60 manats, this would only be valid for a couple of months after which time there could be a crisis. Therefore the increase will be gradual, Rahimov stated. At present two possibilities are under consideration, an increase to 35 manats and 40 manats.

Public budget assignments for payment of targeted social assistance comprise 72m manats.

Saving on the poor, the country will never become richer. So, the government is not in a right way in the sphere of social reforms. Consequently, Turkey's assistance in the definition a right step in the social security of citizens would more expedient.

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