Social sector

In 2006 definite work has been done in the social sphere of Azerbaijan to improve the living conditions of people. Rise in the volume of public budget enabled to increase wages and payments to employees involved in the public sector and budget organizations. As a result the growth rate of wages in the public sector leaves behind the similar figure in the private sector, which be regarded as positive factor.

Moreover, 2006 saw the commencement of targeted social aid, which symbolized the basis of a new social protection system. Reforms in pension system also continued. As a result, the poverty ratio in the country reduced 20.8%, the State Statistics Committee announced. The people with the monthly salary lower than 58 manats are referred to as poor. After the implementation of the first State Program on Poverty Reduction, as a result of 2005, the poverty ratio in the country as cut to 29%, whereas in 2004 only 40.2% of all people was referred as poor.

Community Incomes

As a result of 2006 net incomes of Azerbaijani population made up 9949.8mln manats, or 23.4% more than 2005. Per capita incomes comprised 1189.5 manats, or $1331.4 with a rise of 22% from the last year.

Increase in community incomes was result of rise of minimum salary, average monthly salaries of employees of some state bodies, as well as rise in the number of employed, stable income source of in the form salary. Salaries comprise the major part of community incomes (over 50%), while a bit more pension and social benefits comprise more than 10%.

Major indices, characterizing money incomes of the population

Source: State Statistics Committee

In 2006 the community expenses were distributed in the following way: 68.9% on, purchase of goods and services, 11.6% - obligatory payment and fees, 19.5% - purchase of foreign currency and increase of savings.

People spent on purchase of foodstuff, products and services some 1.4% less than 2005, while the expenses for tax payment rose 2 times, which is linked with the increase of tariffs of public utilities. At the same time expenses for purchase of hard currency dropped 5.1%, which is explained with the consolidation of manat and consolidation of US dollar rate in 2006.

Real community incomes after the payment of taxes and membership fees, made up 8793.8mln manats, or 24.1% more than last year. Real per capita community income made up 1051.3 manats with rise of 22.7%. In 2006 growth rate of community incomes left behind the consumer prices by 15.1%.

Thus, in 2006 the community expenses comprised 8009.58mln manats. The community incomes exceeded expenses by 1940.2mln manats, which implies for accumulation of funds.

Source: State Customs Committee

Salary

Salaries remain to be one of major socio-economic indices, exactly characterizing the level of welfare of employed population. The minimum wage was increased to 35 manats.

Monthly salaries of employees involved at enterprises financed at the expense of the public budget were increased 25% in December.

Thus, the amount of average monthly salary in Azerbaijan as a result of 2006 comprised 141.3 manats, or 19.8% more than 2005. Thanks to increase in salaries of several categories of employees financed out of the public budget in the country, the growth pace of the salaries in public enterprises and organizations was higher than the private sector. Despite of increase in salaries there is still a difference in this indicator throughout the country.

The highest salary rate was fixed in extractive industry, as well as financial, leasing and commerce, construction sectors.

In January to November 2006 (the data are provided with a month-delay) the social payments paid at the job places made up 7.4mln manats. Major part of benefits fell on employees of electricity gas and water supply, transport, store economy, communications and education

Labor Market

In accordance with official statistics, as of 1 January 2007 a total of 3973,000 economically active people were employed in the Azerbaijan, or 3.2% more than 2005.

2006 was remembered as a year of labor fairs. Over the past year the Ministry of Labor and Social Security of Azerbaijan held labor fairs in different regions of the country, as well as capital city. During two-day Р' С...Рѕlabor fairs in Baku on 6-7 December some 2,794 people were employed, including 1,887 people employed by the private sector. Attending the labor fair were 1001 enterprises with 6574 vacant jobs.

Thus, since the beginning of year the Labor Ministry held over 50 fairs in different regions of Azerbaijan with 3,103 companies, which proposed 27,565 jobs. As a result, 7,842 people have been employed. In 2005 the figure was 7,212.

A total of 53,862 people were registered at the employment services, whereas as of 1 December they have numbered 54,146, on 1 November 54,417 people, on 1 October it was 54,728, on 1 September вЂ" 54,987, on 1 August вЂ" 55,295, on 1 July вЂ" 55,424 and on 1 June 55,557. It reveals a cut by 271 people, 0.5%. The similar tendency has been observed since April.

According to the Ministry of Labor and Social Security of Azerbaijan, in 2006, 35.9% of all people has been employed, which is 11% more than previous year.

In general, last year 173,886 new jobs have opened in the country, including 103,074 permanent jobs. Over the past 4 years a total of 520,000 new jobs have opened in the country. In this period the number of employed in the industrial enterprises reached 164,300, which rose as compared to 2005 by 5.7%, while 14.4%-rise has been fixed in the private enterprises. In particular, the number of jobs opened in 2006 at enterprises of the Ministry of Communications and Information Technologies made up 1,800.

The employment rose in the country within the framework of targeted social aid, as it major task is provide with jobs people appealing for benefits.

Average unemployed benefit comprises 58.9 manats, which is 39.1 of average monthly salary of employees. 51.1% of all those receiving unemployed benefits were women. 4 people claimed at 1 vacancy.

Distribution of unemployed and people receiving unemployed benefits per cities and districts of Azerbaijan as of 1January 2007 (in people)

Pension Provision

As of end 2006, the State social Security Fund of Azerbaijan has registered 1,226 pensioners. Cut in number of pensioners as compared to 2005 was explained with the laws on Labor Pensions and Social Benefits, dated 7 February 2006, which distinguished between the social and labor pensioners.

As of 1 January 2007, average amount of pension benefits rose 17% as compared to 1 October 2006 and made up 42 manats, or 30% of average monthly salary in the country. In accordance to a presidential decree, since 1 October minimum pension rate has been increased to 35 manats.

According to the State Social Security Fund, in 2006 some 529.4mln was spent on financing pensions and benefits.