6 Eradicate extreme hunger and poverty

Where are we?

Payment of pensions has contributed to poverty reduction (Photo: Richard Vivian)

In its twenty years of independence since the break-up of the Soviet Union, Azerbaijan has achieved a great deal. It is distinguished by quickly joining the ranks of Upper Middle-Income Countries (UMI) group, with GNI per capita jumping from $ 720 in 2002 to $ 5,290 in 2011.

Azerbaijan saw a substantial reduction in poverty during the 2000s, owing to high growth and policies and programs that improved the distribution of wealth. Seizing the opportunity afforded by the oil boom, Azerbaijan initiated large public sector investment programs and supportive policies to increase wages and social protection transfers to the population, and institutional reforms aimed at modernizing the economy.

These efforts translated into solid growth and poverty reduction. The growth was accompanied by increased wages and income for most of the population. Both growth and improved distribution of wealth through large public transfer programs have been keys to welfare improvement for the vast majority of the population.

However, the employment gains are modest. The relatively high GDP per capita of Azerbaijan is achieved by hydrocarbon exports that comprise above 90% of exports while engaging only 7% of the employed citizens. Hence, a central dimension of Azerbaijan long-term strategy should be economic diversification and the creation of productive jobs that move the country along the path to efficiency and innovation that will narrow the gap with OECD figures in agriculture value added per worker, GDP per person employed, and the income (GNI) truly earned by each citizen.

A key challenge in front of Azerbaijan is to become a full-fledged Upper Middle-Income country, leaving behind its high dependence on hydrocarbon exports which is the primary reason for its current membership to the UMI category.

Poverty rate dynamics

Bar Chart
Targets for MDG1
  1. Reduce by half the proportion of people living on less than a dollar a day
    • Proportion of population below $1 (PPP) per day
    • Poverty gap ratio
    • Share of poorest quintile in national consumption
  2. Achieve full and productive employment and decent work for all, including women and young people
    • Growth rate of GDP per person employed
    • Employment-to-population ratio
    • Proportion of employed people living below $1 (PPP) per day
    • Proportion of own-account and contributing family workers in total employment
  3. Reduce by half the proportion of people who suffer from hunger
    • Prevalence of underweight children under-five years of age
    • Proportion of population below minimum level of dietary energy consumption