State Program on Poverty Reduction and Sustainable Development in the Republic of Azerbaijan for 2008-2015 Chapter 1 Introduction In order to tackle poverty on a global level, the heads of 147 world countries joined together at the United Nations (UN) Millennium Summit in New York in September 2000 to sign the Millennium Declaration reflecting Millennium Development Goals (MDGs) and committed themselves to achieving poverty reduction by 2015. In order to meet the challenges set out in the Declaration, a set of 8 global goals were formulated, with 18 targets and 48 indicators. The first of these goals is to halve the number of the world’s population living in extreme poverty and hunger. National leader Heydar Aliyev signed the Millennium Declaration on behalf of the Republic of Azerbaijan. In order to honor this commitment in line with the local conditions in the Republic of Azerbaijan which is signatory to the Millennium Declaration, the President of the Republic of Azerbaijan approved by his Decree #854 of February 20, 2003 the State Program on Poverty Reduction and Economic Development (SPPRED) in the Republic of Azerbaijan for 2003-2005. Implementation of that State Program in 2003-2005 resulted in maintaining overall macroeconomic stability, ensuring dynamic economic growth and upholding inflation and national exchange rates at appropriate levels. In its turn these achevements promoted to implementation of substantial activities aimed at solution existing social probelms as well as tackling poverty. So the poverty level consequently came down from 46.7% in 2002 to 29.3% in 2005. In order to continue the positive process in improving the population’s welfare the State Program on Poverty Reduction and Sustainable Development (SPPRSD) in the Republic of Azerbaijan for 2008-2015 was prepared. Chapter 2 Poverty in Azerbaijan 2.1. Poverty Profile, Levels and Indicators Table 2.1 summarizes the poverty levels in the country on the basis of statistics and data derived from the Household Budget Survey (HBS) for 2002-2007. Table 2.1. Poverty levels for the Republic of Azerbaijan 2002 Poverty line, in AZN Poverty level, in % 35 46.7 2003 35.8 44.7 2004 38.8 40.2 2005 42.6 29.3 2006 58 20.8 2007 64 15.8
As it is seen from the Table in 2007 the poverty level dropped to 15.8%. Analysis of the HBS data suggests that the following factors are associated with poverty risk in the country: there is a small difference in the poverty rates for urban and rural areas, but the poverty incidence in the urban area has been declining at a faster rate than that in the rural area;
the lowest monthly income per capta by economic regions is reported in Upper Karabakh, Aran and Highland Shirvan. But the main difference is between Baku and the regions of the country (Difference in income rate between Baku and Upper Karabakh with Aran areas was correspondingly AZN25.9 and 19.7); the poverty risk increases the larger the household size (number of household members); the monthly income rate per capita in household with 4 children 1.5 times lower compared to household without children and 1.3 times lower compared to household with 1 child. Income per capita for people living alone is 2 times higher than that one for households with children; the poverty risk for the household decreases the higher the education level of the head of the household, especially when the head of household has higher education; while the monthly income rate for households where the head of household is in the 30-39, 4049 and 60+ age groups is lower, it for households where the head of household is in the 18-29 and 50-59 age groups is higher than average one; Income is a means to improve living standards, but it is not the only factor contributing to poverty reduction. Raising income levels without achieving parallel improvements in the delivery of social services...