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Poverty rate declining substantially in Azerbaijan

1 August 2014 08:30 (UTC+04:00)
Poverty rate declining substantially in Azerbaijan

By Aynur Jafarova

In an ideal world the figure of poverty rate would stand at zero. However, the figure in Azerbaijan has substantially decreased over the last decade. Official statistics show that today 5.6 percent of 9.5-million Azerbaijanis or some 500,000 people live in poverty. This is down from four million people who live in poverty in 2004.

The World Bank has a specific methodology to determine the poverty level. According to the methodology, if a person's daily income is less than two dollars --1.56 manats -- he/she is ranked as poor.

"Azerbaijan uses the criterion of financial need to define the poverty level, and the people, who earn less than required are considered poor and those who earn more, respectively, don't belong to this group," Vugar Bayramov, the Chairman of the Center for Economic and Social Development told local press.

Meanwhile, according to the UN report on human development for 2014, some 2.2 billion people live in or below the poverty level worldwide.

Azerbaijan has been the fastest growing economy in the world in the last ten years and the socio-economic reforms have led to prosperity, less unemployment and reduction of poverty. One of the biggest achievements of the government is that the rapid economic growth has been supported by strong social policy.

Azerbaijan sees an uprising trend in its GDP growth. This paves the way for a steady and rapid development of the country's population, which in turn affects the GDP per capita. Azerbaijan increased its per capita GDP to $7,812 (against $7,394) in the current US dollar value in 2013, according to the World Bank's database.

Over the past 10 years, Azerbaijan has gained undeniable achievements in drastically reducing poverty. The settlement of the problem of "absolute poverty" in Azerbaijan, i.e. the sharp decline in the number of families included in the category of the poor within the framework of accepted criterion is a result of government's successful socio-economic policy.

The development concept "Azerbaijan - 2020: the Vision of the Future" notes the level of poverty declined from 49 percent in 2000 to 7.6 percent in 2011 as a result of a successful social policy. Meanwhile, salaries and pensions have increased several times ever since.

Today the government continues taking important measures to reduce the poverty rate to a minimum level.

Earlier, Azerbaijani President Ilham Aliyev signed the laws on the criterion of need and subsistence level.

According to these criteria, the least amount is set at 100 manats per month, while the average subsistence level is determined at 125 manats, for working-age population at 136 manats, for pensioners at 103 manats, and for children at 103 manats per month in 2014.

The daily consumer basket of the Azerbaijani population includes no less than 100 grams of cooked meat, vegetables, cereals and bread.

Nariman Agayev, the Chairman of the Sustainable Development Research Center, believes there are no starving people in Azerbaijan.

"A working-age man in Azerbaijan can earn up to 15 manats per day. Today every citizen of our country needs at least 5 manats per day for a normal diet at home. If he prefers to eat in catering, he will need minimum 8 manats. The majority of our population earns this amount of money," he noted.

The experiences of various countries show that countries with a stronger middle class are more sustainable from political, economic, social and other aspects and have higher development potential. Due to this, solving the poverty problem will remain the main part of Azerbaijan's social policy.

The "Azerbaijan - 2020: the Vision of the Future" concept notes that the social allowances will be unified and measures to increase their amount will continue to be implemented in the country.

Azerbaijan plans to improve the system of allowances given to families with children. Also, the country is keen to renew the rules of identifying families' need for social aid in order to establish a modern social security system and to reduce poverty. The level of the needs criterion is expected to constantly increase to bring it in line with minimum living standards.

Azerbaijan is also set to increase the effectiveness of social aid through the use of modern social technologies, and to apply active social aid programs (self-support, preferential social crediting) along with the existing targeted state social aid system.

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