The interests taken by the Azerbaijani society in the World Bank's report on poverty in Azerbaijan is mostly explained with that its being an alternative source for familiarity with the state of poverty in the country. Using own estimation of poverty, the WB experts came to a conclusion on its sharp decrease beginning from 1999. Unfortunately, the results of the WB's poverty report are compared with 2005. But it would very interesting for a reader to make conclusions on the reliability of forecasts by the international organization.
Thus, poverty in Azerbaijan is declining rapidly, particularly in Baku (table 1). At the national level, the proportion of poor people fell from about 44.6 percent in 2002 to 24.0 percent in 2005, a drop of 20.6 percentage points. Extreme poverty fell from 26.9 percent of the population in 2002 to 9.2 percent in 2005. These findings suggest that 1.9 million people lived in poverty in 2005, down from almost 3.3 million in 2002.
Table 1: Estimated Number of People Living in Poverty in Azerbaijan, 2002вЂ"2005 (percent)
|
Total |
Baku |
Non-Baku Urban |
Rural | |||||
|
poor |
very poor |
poor |
very poor |
poor |
very poor |
poor |
very poor | |
|
2002 |
44.6 |
26.9 |
41.6 |
25.6 |
48.7 |
31.5 |
43.7 |
24.7 |
|
2003 |
39.7 |
22.1 |
34.8 |
19.3 |
46.0 |
27.9 |
38.4 |
20.0 |
|
2004 |
28.5 |
13.4 |
18.6 |
8.0 |
35.4 |
19.0 |
29.6 |
13.0 |
|
2005 |
24.0 |
9.2 |
14.7 |
6.6 |
27.2 |
11.9 |
26.9 |
8.9 |
|
2004-2005 |
-4.6 |
-4.3 |
-3.9 |
-1.4 |
-8.2 |
-7.1 |
-2.7 |
-4.1 |
|
2002-2005 |
-20.6 |
-17.7 |
-26.8 |
-19.1 |
-21.5 |
-19.6 |
-16.8 |
-15.7 |
Source: Household Budget Survey and Staff estimates
1. Reasons for the sharp drop in poverty are two-fold. Wages and salaries have more than doubled, with the minimum wage raised fivefold since 2001, albeit from a very low level. There has also been a significant surge in transfer incomes for poorer households. Government social transfers to the poorest 20 percent of households increased more than 35 percent in 2004, while pensions, the main component of the government social program, increased about 44 percent. Remittances from a significant number of Azerbaijanis working abroad are also an important source of households financing and has helped reduce poverty.
2. Systemic reforms to improve the targeting and administration of social assistance and modernize the pension and social insurance system are well underway. A new targeted social assistance scheme was rolled out in July 2006. Its impact now needs to be carefully monitored.
3. Most improvements in welfare have been concentrated in Baku, which saw a 26.8 percentage points decline in poverty during 2002-05 (poverty fell 21.5 percentage points in urban areas outside Baku, and 16.8 percentage points in rural areas). Lack of employment, assets, and commercial opportunities and weaker access to basic health and education services in provincial towns and rural areas are driving factors behind intense rural-urban migration. Lack of reliable electricity and other infrastructure has been a major factor discouraging investment and commercial activity outside Baku. Nevertheless, between 2004 and 2005 poverty in non-Baku urban areas fell by 8.2 percentage points, almost twice as much as in Baku. While poverty prevalence is not significantly higher among refugees and internally displaced people, these groups are particularly vulnerable, because they lack assets and employment opportunities and are heavily dependent on state transfers.
4. The growth-incidence curve below suggests that growth has been considerably pro-poor in Azerbaijan during 2002-2005. Growth was positive for all percentiles of the Azeri population with a mean annual growth rate in consumption of 7-8 percent. The poorest decile has enjoyed annual consumption growth of about 15 percent. In general, consumption growth for the poorer deciles is higher than for the richer deciles.
Improving Social Conditions and Meeting the Millennium Development Goals
5. Challenges remain in the social sectors. Reforms are underway to address inefficient use of resources; weak management, planning, and monitoring capacity at the central and local levels; and difficulty in adapting the educational system to the changing skills requirements of the labor market, but progress has been slow.
6. The education budget has been increased substantially, to 5 percent of non-oil GDP and 17.8 percent of the total budget in 2005. The enrollment rate for compulsory education is high, and the literacy rate is almost 100 percent, irrespective of gender and ethnicity. Beyond age 16, however, enrollment rates drop sharply, with only 13 percent of young adults age 17вЂ"24 (9 percent among children from poor families) enrolled in postsecondary educational institutions.
7. A fundamental reform agenda needs to be implemented in the healthcare system. Life expectancy at birth in Azerbaijan вЂ" already low - has been declining, as a result of high infant, child, and maternal mortality rates, the high prevalence of noncommunicable diseases, and unhealthy lifestyle choices. The healthcare system does not deliver affordable, good-quality services to meet the needs of the population, and it suffers from very low utilization rates, particularly among the poor. The sector is undermined by major inequalities in healthcare; underfunded, poorly managed, and highly fragmented primary healthcare services; inadequate and inefficient resource allocation (the sector received just 1.6 percent of non-oil GDP in 2005); a healthcare workforce that relies on informal payments to cope with low wages and lacks incentives to provide appropriate care; and a weak governance, legal, and regulatory environment.
These challenges notwithstanding, the 2005 Millennium Progress Report ranks Azerbaijan as one of the countries that can be placed on the fast track for achieving the MDGs (see annex 4). The SPPRED and the SPPRSD are closely aligned with the MDGs. While both health and education were previously severely underfunded, since 2005 the government has committed a larger share of the fast rising budget to the social sectors. Given committed resources, the key is to move rapidly on needed structural reforms within the social sectors.
Likelihood of Meeting Millennium Development Goals
|
Millennium Development Goal |
Current status |
Prospects for achieving Goal by 2015 |
|
Half income poverty |
About 50 percent of the population of Azerbaijan lived in poverty in 2001. In 2005, it is estimated that 24 percent of the population was poor. |
Likely. The oil sector boom, combined with broadening of employment-generating economic activities in non-oil sectors together with safety nets policies, would allow Azerbaijan to achieve this target, probably sooner than 2015. The oil sector boom, combined with broadening of employment-generating economic activities in non-oil sectors together with safety nets policies, would allow Azerbaijan to achieve this target, probably sooner than 2015. |
|
Achieve universal primary education |
Enrollment rates in basic education (grades 1-9) are well above 90 percent, although drop-out rates are higher for the poor than for nonpoor. Sector concerns relate more to quality, including the need to build the skills and knowledge necessary to meet the challenges of an increasingly global economy. |
Likely. The country inherited an education system that provides nearly universal basic education. Sector issues relate more to quality, than to access. The country inherited an education system that provides nearly universal basic education. Sector issues relate more to quality, than to access. |
|
Achieve gender equality in primary education |
Surveys show no significant gender differences in enrollment rates for basic education (grades 1-9). Concerns relate more to girls' access to upper secondary and higher education, particularly in rural areas. |
Likely. Although girls drop out of secondary school earlier than boys and fewer attend post-secondary education, especially in rural areas, there is no evidence of gender inequality at the primary level. Although girls drop out of secondary school earlier than boys and fewer attend post-secondary education, especially in rural areas, there is no evidence of gender inequality at the primary level. |
|
Reduce under-five mortality by two-thirds |
According to official data, under-five mortality rate was 23.1 and infant mortality 12.8 per 1000 live births in 2002). On the other hand, estimates based on surveys indicate that in 1990, the baseline for the MDG goals, the U5MR and IMR were 106 and 84 per 1,000 live births, dropping to 96 and 76, respectively in 2002. However, for the pilot districts covered by the Health Reform Project, UNICEF reports a 13 percent decline from 73.2 per 1,000 births (2002) to 63.7 per 1000 (2004) in infant mortality, which if sustained and generalized to the rest of the country, would put Azerbaijan back on track to meet the goal of 2/3 reduction by 2015. |
Unlikely. Assessing progress is complicated by data uncertainties. To reduce under-five mortality by 2/3, a 4.4 percent annual reduction is needed between 1990 and 2015. Azerbaijan's progress has been at only about 0.9 percent annually during 1990вЂ"2000. Thus Azerbaijan is at risk of not meeting this MDG without a concerted effort to strengthen primary health care and make it accessible to the poor. Assessing progress is complicated by data uncertainties. To reduce under-five mortality by 2/3, a 4.4 percent annual reduction is needed between 1990 and 2015. Azerbaijan's progress has been at only about 0.9 percent annually during 1990вЂ"2000. Thus Azerbaijan is at risk of not meeting this MDG without a concerted effort to strengthen primary health care and make it accessible to the poor. |
|
Reduce maternal mortality by three quarters |
MIC Survey (UNICEF) estimates place maternal mortality at 79 deaths per 100,000 births in 1990, and 94 in 2000. According to the State Statistical Committee, the MMR was 19.9 deaths per 100,000 births in 2002, a 52 percent reduction compared with 37.6 in 2000. |
Unlikely. There has been a disconcerting rise in maternal mortality according to independent surveys, but a reduction in MMR according to official data. In the absence of comprehensive health sector reform to improve access and quality in primary healthcare delivery, it is unlikely that Azerbaijan will meet this goal. For health-related MDGs, problems of data collection and definitions have to be resolved to enable realistic targets and monitoring. . There has been a disconcerting rise in maternal mortality according to independent surveys, but a reduction in MMR according to official data. In the absence of comprehensive health sector reform to improve access and quality in primary healthcare delivery, it is unlikely that Azerbaijan will meet this goal. For health-related MDGs, problems of data collection and definitions have to be resolved to enable realistic targets and monitoring. |
|
Reverse the spread of HIV/AIDS |
The prevalence rate of Azerbaijani citizens infected with HIV is believed to be low by regional standards, although newly reported cases doubled between 1999 and 2000. The actual extent is not known because of limited coverage of seroprevalence surveys and lack of behavioral surveys. |
Likely. Although the prevalence rate is considered to be very low, there are an estimated 600,000 IDUs in the country who account for 63 percent of the cases. There is a need for both sero and behavioral surveillance and greater attention to HIV/AIDS prevention and care. As of December 1, 2004 Ministry of Health has launched the HIV/AIDS project funded by the Global Fund to fight AIDS, Tuberculosis and Malaria. Although the prevalence rate is considered to be very low, there are an estimated 600,000 IDUs in the country who account for 63 percent of the cases. There is a need for both sero and behavioral surveillance and greater attention to HIV/AIDS prevention and care. As of December 1, 2004 Ministry of Health has launched the HIV/AIDS project funded by the Global Fund to fight AIDS, Tuberculosis and Malaria. |
|
Reverse the spread of tuberculosis |
In 2003 tuberculosis prevalence and mortality rates were 50 cases and 12 deaths per 100,000 population, respectively. Case fatality rate stands at a high 14 percent. Case detection rate remains at around 25 percent, much lower than the international standard of 70 percent, with only a small fraction of cases detected through DOTS. The cure rate was 84 percent, close to the target of 85 percent. |
Likely. According to WHO Global Tuberculosis Control Program, DOTS population coverage was 48 percent in 2003. Political commitment and additional resources are needed to expand coverage from the current to 100 percent in order to meet the MDG goal of reversing the spread. According to WHO Global Tuberculosis Control Program, DOTS population coverage was 48 percent in 2003. Political commitment and additional resources are needed to expand coverage from the current to 100 percent in order to meet the MDG goal of reversing the spread. |
|
Ensure environmental sustainability (including halving the proportion of people without access to safe water). |
According to available estimates, around 76 percent of all households have access to an improved drinking water source вЂ" 93 percent in urban areas and 58 percent in rural areas. |
Unlikely. Achieving this MDG is feasible only if the government gives sufficient priority to rural water in its public investment program, consistent with the SPPRED. Achieving this MDG is feasible only if the government gives sufficient priority to rural water in its public investment program, consistent with the SPPRED. |