Azerbaijan: Model for poverty reduction

BAKU — This is my first time to be in Central Asia, so this is my first time to set foot on Baku, capital of Azerbaijan. This trip has been made possible by an invitation extended by the Milli Mejlis (parliament) of the Republic of Azerbaijan for senior journalists to observe the country’s presidential elections tomorrow, Oct. 9. The journalists are from the Centrist Asia Pacific Democrats International (CAPDI).

Why should journalists from other countries be interested in observing Azerbaijan’s presidential elections? First, as observers, they learn about how leaders are elected in this part of the world. Second, they see how a country, racked by political strife for years, is able to reduce the poverty rate from 49.6 percent of its population in 2001 to 7.6 percent in 2011, and lately, to 6 percent. This feat is considered by economic writers as “stupendous,” and most likely, can be used as a model for Philippine leaders engaged in the serious business of  reducing our country’s poverty incidence.

The man behind this miracle story is President Ilham Aliyev, who is seeking reelection for the third time in this week’s election. How contenders for the presidency can match, or outmatch Aliyev’s accomplishments is seen to be impossible; in fact, his reelection is said to be a foregone conclusion.

I must mention, at this point, that the journalists’ presence in the electoral process is due to the influence of former House Speaker Jose de Venecia, CAPDI president and founder of ICAPP (International Conference of Asian Political Parties) which represents more than 300 ruling and opposition parties in Asia, including Azerjaiban and the Philippines. As De Venecia told us in the past, anything going on in the member countries is a concern for all members.

A little backgrounder on Azerbaijan is in order. Azerbaijan is the largest of the three Caucasus states born out of the dissolution of the Soviet Union in 1991 (the two are Georgia and Armenia). It is located at the crossroads of West Asia and Eastern Europe. It is bounded by the Caspian Sea to the east, Russia to the north, Georgia to the northwest, Armenia to the west, and Iran to the south. The Gross Domestic Product of Azerbaijan is 80 percent of all GDP of South Caucasus (Azerbaijan, Armenia and Georgia).

An Azeri secular republic proclaimed as early as 1918, the country was incorporated in the revolutionary Soviet Union in 1920. In 1991, the Azeris regained their freedom. But a thorn in the neck and a burden on its resources is its continuing war with its western neighbor, Armenia, which occupies not only Azerbaijan’s Nagorno- Karabach (94.3 sq.km) but also seven districts outside of Nagono-Karabach (4.3sq.km).

Azerbaijan plays a large role in oil exporting and is a major shareholder of an oil pipeline that runs from the Caspian Sea to Seyhan in Turkey. Revenues have buttressed the defense buildup. Thus, the security situation and economic policy form two of the most important issues facing the government.

President Ilham Aliyev has been president of the country since 2003. He took over shortly before the death of his father, President Heydar Aliyev, who had been in power since 1993. The father was a charismatic, politically skillful, intelligent and iron-willed personality who held key posts in Communist Party and security organs. It is his son, Ilham, a more introspective and intellectual person, who made it possible to make the country’s GDP grow threefold in the last ten years, writes former Prime Minister Madhav Kuman Nepal.

Azerbaijan is a unitary constitutional republic. Its president is elected nationwide; he appoints members of the cabinet and parliament. The constitution does not declare an official religion, but the majority of the people and some oppositionist movements adhere to Shia Islam.

So what programs did Ilham Aliyev institute as model for poverty reduction?

A World Bank report says, “Increased social transfers, made possible by growing oil revenues, has led to poverty reduction in Azerbaijan, there are currently two kinds of social protection program. The first kind consists of contributory social insurance programs such as pensions, sick leave completion, and unemployment assistance.’’

The programs are managed by the State Social Protection Fund of Azerbaijan. Non-contributory social insurance transfers include benefits to war veterans, targeted social assistance to people with disabilities, and social pensions for elderly people who are not covered by the contributory social insurance programs are financed mainly through social security contributions made by the employed population.

The SSPFA is increasingly relying on budget transfers to fund these programs. In 2008, budget transfers accounted for nearly 27 percent of the SSPFA’S total revenue and are expected to have increased to 31 percent in 2010. Non-contributory insurance programs are financed through the budget, and these services are delivered through the relevant ministry or its regional offices.

One major social insurance transfer program is the Targeted Social Assistance (TSA) program, which was launched in 2006 and provides noncontributory cash transfers to low-income families. It is currently the most important social transfer program in the country.

There’s always a downside to a story, and in this case Transparency International observes that although the Azerbaijan government claims to be eradicating corruption, it is ranked 139 of 176 countries in its Corruption  Department of State and the Organization for Security and Cooperation in Europe (OSCE) have been perennially critical of elections in the country, citing numerous cases of voter intimidation, unequal conditions for electoral candidates and serious flaws with the counting of votes as reasons why elections do not meet international standards. What’s more, critics consider President Aliyev’s removal of the presidential team as his devise to let the incumbent to remain in power.

But Aliyev is an icon to many Azeris. Raffy, a private public relations executive hired to look after us journalists, said there is no poverty the way we know it in the Philippines. He said 20 years ago, when he was growing up, he would see people lining up for food rations, but now, ‘I’m just amazed that there is so much progress.’’ He didn’t understand the words ‘’squatters’’ and ‘’informal settlers.’’ After we told him about the preponderance of this underprivileged sector, he said, ‘’No, the 6 per cent people belonging to the poverty level are not as bad as in your country. Our poor have housing, they can afford to send their children to school, and enjoy some social benefits.’’ What they cannot do too often, though, is shop at the numerous high-end boutiques selling brand names as Armani, Gucci, Ferregamo, Vulgari, etc.

As the World Bank report says, ‘’The country’s social protection programs have had a significant impact on poverty.’’

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