SAFE & SECURE

Azerbaijan 2016 | LABOR, HEALTH & EDUCATION | INTERVIEW

TBY talks to Salim Muslumov, Minister of Labor and Social Protection of Population, on the work the Ministry is doing to ensure socioeconomic development and social protection.

Salim Muslumov
BIOGRAPHY
Salim Muslumov graduated from the Azerbaijan Institute of National Economy in 1983 and continued his postgraduate education at Moscow State University until 1987. From 1988 to 1995, he worked as a lecturer, senior lecturer, and assistant dean at Azerbaijan State Economic University. He then worked as department chief at the Ministry of Finance from July 1995 until March 2000. Subsequently, he was promoted to Major-General of the Customs Service. He served as Chairman of the State Social Protection Fund of the Republic of Azerbaijan until 2013, and was then invited to his current post. He is the author of four books and over 50 scientific articles.

At a time when the oil factor of the economy has significantly weakened, what steps are being taken to stimulate sustainable socioeconomic development and provide social protection for the population?

First of all, let me note that Azerbaijan has had a strategy to eliminate its dependence on oil ever since it accounted for a major share of the national economy. As a result of the judicious reforms carried out by President of Azerbaijan Ilham Aliyev, the country has managed to build a strong socioeconomic capacity over these years. Azerbaijan has repeatedly passed the tests of global recessions and secured the sustainable development of its economy. We have been witnessing that even in the early months of the current year. Extensive measures have been taken to prevent external adverse impacts on the economy and encourage the development of the non-oil economy at a time when oil revenues are in decline. It is no coincidence that the non-oil economy has increased by over 5% in the first quarter of this year. This sector is expected to grow even faster in the coming years. This is underpinned by important non-oil sector development reforms spearheaded by the President, the ample opportunities for private enterprise development, the stimulation of non-oil exports, and the favorable conditions for the implementation of new projects worth around AZN2 billion. We have also observed improved welfare indicators in the first months of the year. Population incomes in January-February 2016 have increased by 10.2% in comparison with the same period of last year to reach AZN6.460 million. Per capita incomes constitute AZN673, or an average of AZN356.6 per month. In order to increase the purchasing power of the population, in particular the low-income families, and mitigate the consequences of the national currency devaluation and price fluctuations, President Ilham Aliyev signed more than 25 executive orders and resolutions in January 2016 to increase different social payments, including wages, pensions, benefits, scholarships, and compensations. Therefore, all social payments have been increased by 10% as of February 1, 2016. These payments cover 3.6 million people, or 38% of the country's population. Relevant changes were made to the 2016 state budget and additional funds allocated to enable the financing of the mentioned activities. These measures are intended to enhance the social protection and improve the welfare of the Azerbaijan population, which is further evidence of the fact that this is a priority area for the President. The head of state said at a Cabinet meeting dedicated to the results of the first quarter of this year and objectives for the future, “The social policy has always been and will continue to be a priority. The steps taken in the first quarter show once again that Azerbaijan is a welfare state. Our policy is centered on the people of Azerbaijan. The interests of Azerbaijani citizens are above everything for us. All economic reforms and our successful oil and gas policies are aimed at improving people's lives." The implementation of important social programs is also well under way. In the first quarter of 2016, a total of 112,730 families, which equals 492,000 people or 5.1% of the country's population, received targeted social assistance from the state. The average monthly amount of such assistance as of April 1 has increased by 5.6% to reach AZN151. In this period, 395,000 people have received monthly and one-off social benefits, and 55,000 people were provided with monthly pensions of the President of the Republic of Azerbaijan. A total of AZN84 million has been spent from the state budget on the payment of social benefits, pensions, and compensations. The social program on improving the living conditions of handicapped war veterans and martyr families is also gradually expanding. In continuation of the measures taken in accordance with the President's order dated 20 June 2014, a total of 104 handicapped war veterans and martyr families have been provided with fully renovated apartments.

How have the economic reforms changed the country's labor market for the better?

The reforms initiated by the President to accelerate non-oil sector growth, boost regional development, provide comprehensive support for entrepreneurship, and improve the business landscape have certainly contributed to maintaining stability on the labor market. For example, the programs on the socioeconomic development of districts and on non-oil sector growth have led to the creation of more than 1.4 million jobs. The unemployment rate has dropped to 5%. Work is still under way to continue this process. In particular, a total of 37,000 jobs were created in the country in January-March 2016, including 31,000 permanent ones. In particular, the effective efforts of the Ministry of Labor and Social Protection of the Population together with those of other state agencies have helped us to dramatically reduce and maintain the rate of unemployment and expand employment opportunities in Azerbaijan as per instructions of the President. Thus, a total of 33,300 people who applied to employment agencies of the ministry in January-March 2016 have been provided with jobs. In addition to maintaining stability on the labor market, these processes have led to an increase in the number of hired workers. Let me note that the system of electronic tracking of employment agreements introduced by the Ministry in 2014 allows us the opportunity to promptly and objectively monitor the labor market and make employment relations more transparent. According to the information obtained from this system, the number of hired workers has increased by 6,600 people year to date to reach 1,256,700 people as of April 1 (except for the Nakhchivan AR and cases when employment agreements were signed on paper only). Also, in order to enhance the social protection of the jobless population, the amount of minimum unemployment benefits has been increased by 36.4% since February 1. This has more than doubled the amount of budget allocations for this purpose.

What innovations are being applied to the sphere of social protection in addition to the system of electronic registration of employment agreements?

In accordance with the instructions of the President, we have also put in place a modern and transparent mechanism for the electronic tracking of two other important activity directions of the Ministry: provision of targeted social assistance and identification of disability. An Integrated Electronic Subsystem for Applying and Assigning Targeted State Social Aid (VEMTAS) has been designed within the Ministry's centralized information system. It was commissioned on February 15, 2016. People have been provided with the opportunity to electronically apply for targeted assistance. The system also ensures automatic data acquisition from relevant state agencies. We have thus created a modern and transparent system that completely rules out the interference of an official. Another tool the Ministry has created is the Subsystem for Medical and Social Expertise and Rehabilitation (TSERAS), which provides persons with a disability the opportunity to apply for an assessment of their disability. Information on such applications, the examinations conducted, and the decisions made are uploaded to the system in real time. Access to the system by examined individuals, employers, and state agencies using this information has been ensured through an e-government portal. Besides, the system automatically extended the duration of the active 1st group disability for lifetime and 2nd and 3rd disability groups - for 5 years. The system also automatically tracks the duration of different degrees of disability. This has made it no longer necessary for some 200,000 people to undergo medical examination every year, which has also contributed to minimizing the relations between officials and citizens.

According to an Order of the President of the Republic of Azerbaijan dated April 7, 2016, a total of AZN6 million as allocated to the Ministry of Labor and Social Protection to assist in encouraging self-employment among the population. What exactly do you plan to do to implement the Order and what would be the anticipated outcomes?

First of all, let me note that the mentioned presidential Order signals a departure from passive assistance to the low-income families to sustainable employment programs for the able-bodied members of such households. In fact, several pilot projects implemented in cooperation with the International Labor Organization (ILO) were a tremendous success, as they helped 21 low-income households set up family businesses and expand self-employment opportunities. They now run their own small family businesses and can at least provide for themselves. Therefore, in an effort to expand on this positive experience, we are now studying the relevant practices of other countries in this area. We are extensively using the ILO data in preparing labor market programs. The presidential Order from April 7, 2016 has actually provided a financial and legal framework for these activities. The families currently receiving targeted social aid include those that have either of the parents, have no able-bodied members, limited health opportunities and disability, people above the age of 65, as well as families with four or more children. Such families will continue to receive targeted aid from the state. In general, 70% of the families receiving targeted social aid live outside Baku and 75% of them have private land plots. More than 50% of recipients of targeted social assistance are above 18 years of age. Such families will receive support in the amount of AZN4,000 to set up their family business. ILO experts are expected to provide their assistance in this. These experts will train two local specialists in every district, including the Nakhchivan Autonomous Republic, i.e. a total of 146 experts across the country, on how to identify such families and help them establish their small businesses. After the experts complete the organizational work, active self-employment programs will start. The tools and livestock to be provided to the families will also be insured. Some 1,400 households across the country are expected to benefit from self-employment programs. This explicitly shows that President Ilham Aliyev's socioeconomic development strategy is intended to improve the welfare of the country's citizens, enhance their social protection, and facilitate progress on the path to further economic growth.