State action to come out for unemployment cut

9 February 2016 09:00 (UTC+04:00)

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By Gulgiz Dadashova

While low oil prices are hitting the global economy, slowing growth rates increase unemployment numbers worldwide, especially in energy producing countries.

Employment remains a key factor through which the economies seek to enable people to meet their needs and achieve their socio-economic goals.

Low unemployment ratio well mirrors economic growth of the nation, striving policymakers to use better tools to improve the market.

Currently, the unemployment ratio is equal to 5 percent in Azerbaijan. Despite this small figure, the government takes measures to prevent growth in unemployment and improves the employment services system.

Oil and gas exporter Azerbaijan have introduced reforms and measures to improve economic activity to bring unemployment back down and open new jobs.

Priorities for Azerbaijan include supporting economic growth and improving the non-oil sector of the economy, ensuring that private sector creates new jobs, but not only the government.

Greeting the role that the private sector plays in driving the economic growth and creating jobs, the Azerbaijani government has centered its new economic model on improving opportunities for businesses, including by strengthening their ability to compete internationally.

The government is also working to cut tax and eliminate burdens on businesses. As companies create jobs, the state seeks to simplify their access to simplified loans and boost entrepreneurship, particularly in agro –sector.

A new 10-year concept of employment is being developed by the Labor and social protection Ministry together with the due state bodies, Azerbaijan Confederation of Trade Unions, National Confederation of Entrepreneurs (Employers) Organizations and the nongovernmental organizations, as well as the World Bank, the UN Population Fund and the International Labor Organization.

Salim Muslimov, Minister for Labor and Social Protection of Population, said on February 8 the concept covering 2016-2025 will be developed in three months and focus on the development of macroeconomic policies, entrepreneurship, assessment of the demographic burden on the labor market and employment policy.

The concept, he said, will also create competitive human resources, improve the information provision for the development of the labor market and strengthen social protection of the unemployed and job seekers.

The country’s previous employment policy allowed opening more than 1.5 million new jobs and reducing the unemployment rate from 7.4 percent in 2004 to 4.9 percent in 2015.

The strategy will include proposals how the Azerbaijani government can take advantage of future opportunities and the potential of demographic change in order to secure long-term growth and prosperity.

The minister noted that in terms of demography, Azerbaijan is one of the few countries in Europe and CIS countries with fast-growing populations.

“In 2005-2015, the population increased by 13.6 percent. Currently, citizens aged less than 14 years account for 22.4 percent of the population in Azerbaijan, aged over 15 make up 64 percent - 71.6 percent, while those who are aged above over 65 years constitute six percent. Meanwhile, 28.1 percent of the population is young people aged 15-29 years," he said.

Muslimov believes the country needs to implement a dual training system.

“The International Labor Organization reports that the psychology of employers has changed, as they no longer want to participate in training, and strive to immediately get ready specialists. This can be observed not only in Azerbaijan, but also all over the world. Due to this, the labor market does not meet its requirements.

In many European countries dual training is now widely used, where different companies hire young people aged 15-16 years. They work for 20-30 percent of the salary, but at the same time continue to learn. As a result, they receive the necessary experience and are in demand in the labor market when aged 18,” he said.

The minister said for the introduction of a similar system in Azerbaijan, the private sector needs to share interest.

"It is necessary to expand the range of training courses, training and retraining,” he said. “We are working in this direction, for example, soon another similar center will open in Ganja. We want such centers to operate in all regions of the country in the future.”

Training is also fundamental in long-term strategy to offer real opportunities to the unemployed and tackle skills mismatch. In 2015, the State Employment Service organized vocational counseling courses, which covered 100,000 high school students.

Follow Gulgiz Dadashova on Twitter: @GulgizD