Caspian Energy (CE): Mr. Minister, in connection with the first anniversary of the Patriotic War, which has ended with the historic Victory of Azerbaijan, we would like to ask our first question on the topic: what is being done to address social issues in the post-war period?
Sahil Babayev, Minister of Labor and Social Protection of Population of the Republic of Azerbaijan: The main feature of the Azerbaijani social state model is that it relies more on moral norms and humanistic approaches, and therefore, always stands together with the citizens. For only the last three years, more than 900 regulatory legal acts have been adopted to improve social welfare in the country, including decrees, orders, laws, etc.
Of course, the solution of social issues in the post-war period is one of the key priorities for our Government. In response to the next military aggression of Armenia against our country on September 27, 2020, the Azerbaijani Army under the leadership of President, Victorious Commander-in-Chief of the Armed Forces Ilham Aliyev performed successful military actions and just for 44 days, liberated its internationally recognized territories from Armenian occupation which lasted for about 30 years.
During the Patriotic War, we have witnessed Azerbaijan’s high readiness for breakthrough actions in the front lines and sustainable social protection in rear areas. In this war, Azerbaijan has proven the availability of a powerful army, and as a social state, has demonstrated its strong social policy in the rear and has continued and even expanded all its social programs aimed at the well-being of citizens. All social payments were made ahead of schedule, and the state increased its social support to the citizens by allocating the required funds even in wartime.
Azerbaijan, who won the war, entered the post-war period with a package of social support covering the Patriotic War martyr families and veterans, victims of the Armenian terror, and their relatives with wide measures aimed at solving the social issues of the period. As part of these measures, social payments (President’s monthly pension or allowance) were assigned to more than 15,000 Patriotic War martyr families and invalids. During the post-war period, these allowances have been increased significantly again. By the decrees signed by President Ilham Aliyev on December 30, 2020, the President’s monthly pension for the martyr families and war invalids has been increased by an average of 50 percent, and in some cases, by about 100 percent. Also, the National Heroes’ pension has been increased from AZN 1,500 to 1,800. The President’s monthly pension (AZN 2,000) has been established for those awarded the title of the Patriotic War Hero.
During the post-war period, the program for providing martyr families and war invalids with apartments and individual houses has expanded. By the Presidential Decree dated January 25, 2021, those registered in 2014-2019, as well as the families of those killed in military operations of the Patriotic War 2020 and invalids of this war will be gradually provided with 11,000 apartments or individual houses over 5 years.
Work is underway on the allocation of about 3,000 apartments and individual houses (5 times more than in 2018) for them in 2021, and 1,700 apartments have already been handed over to this category of people this year. In total, about 11,000 martyr families and war invalids have been provided with apartments and individual houses so far. By the Order of President Ilham Aliyev dated August 25, 2021, the Patriotic War Heroes and their families were also provided with housing.
As a continuation of the car provision program, another 144 cars were presented to war invalids in the first 9 months of 2021, with a total of 7,350 cars (Poster - 1).
During the post-war period, about 39,000 services were provided to 31,000 people, including the Patriotic War martyr family members, veterans, victims of Armenian terror, and their relatives.
In particular, social and psychological support was provided to 10,000 members of 3,000 families, 1,300 veterans were provided with rehabilitation services in the Ministry’s rehabilitation facilities, 143 servicemen were provided with the latest generation high-tech prostheses, 944 invalids of the 1st and 2nd Karabakh wars were provided with rehabilitation means, of them, 846 veterans – with motorized wheelchairs. In the post-war period, 5,312 people were covered with self-employment programs, and more than 2,000 people were provided with jobs under the paid social work and other programs. On June 10 this year, the Employment Marathon started, aimed at supporting the employment of martyr family members and war-wounded veterans, and the number of employers joining this Marathon and martyr family members and veterans employed thereunder is constantly growing.
To date, 26 types of services by 7 agencies were provided at a new innovative level, in an operative and transparent manner on a single-window principle to more than 1,200 applicants by the Unified Coordination Centers, established by the Presidential Decree dated June 25, 2021, as another support to the martyr families and war-wounded veterans and launched in the DOST Centers in Baku on August 23. (Poster-2) All these measures are being continued and expanded.
CE: Increasing social payments is one of the important factors in improving the welfare of citizens. What steps are being taken in this field in the country?
Sahil Babayev: Increasing social payments is a sequential process, which is a clear manifestation of the strong state social policy pursued in our country. Significant progress has been achieved in this area based on the President’s instructions. E.g., let’s look at the social picture of 2018-2020: the minimum wage has almost doubled (from AZN 130 to 250). The average monthly salary increased by 33.7% (from AZN 544.6 to 728.5 as of August 1 this year), and the salary fund - by 85%.
Over the past three years, the minimum and the average monthly amount of pension have increased by 82 and 60%, respectively. Allowances and pensions have increased by an average of 100%. The average monthly amount of targeted state social assistance per family has increased by about 75%. If we take 2018-2021, then during this period, annual expenditures for pensions, allowances, and targeted social assistance have increased by 60%. (Poster-3)
In January-August 2021, 4.1% or AZN 158 million more, a total of AZN 4 billion was paid to the population of these categories compared to the same period last year.
Note that our country achieved significant progress in bringing the net minimum to net average wage ratio in line with the European Social Charter’s norms: this figure increased from 26.5 percent in 2018 to 33.3 and 38 percent in 2019 and 2020, respectively. (Poster -4)
Another important area of reforms aimed at ensuring the well-being of citizens is introducing humanistic approaches in the social security system to improve its accessibility. In Azerbaijan, from the beginning of 2019, people who have reached retirement age with even the smallest pension capital registered in their personal accounts have been granted the right to a labor pension. From the beginning of 2020, the age for survival benefit has been equated with the retirement age, i.e., many elderly people who have reached retirement age but are not entitled to a pension have the opportunity to benefit from the social security system earlier.
These and other reforms, including the introduction of a number of new types of social security, have further expanded the scope of the social security system. In general, over the past three years, the number of social allowance recipients increased by 160,000 and exceeded 2.4 million.
Funds allocated for this purpose are constantly increasing. E.g., from the beginning of 2021, AZN 442 mln. is additionally allocated annually to increase the indexation of pensions. From the beginning of this year, AZN 40 million has been allocated additionally to increase existing pension types and establish new ones. I.e., only in these two areas, it is planned to additionally pay about AZN half a billion to our citizens.
Note also that the Azerbaijan 2030: National Priorities for Socio-Economic Development, approved by the President of the country, provide for continuing this growth dynamics in the coming period.
CE: The COVID-19 pandemic has negatively affected the world labor market and employment. What has been done to protect people, especially those from vulnerable groups, from this impact, ensure the labor market sustainability, and support the private sector?
Sahil Babayev: The Azerbaijani state has demonstrated positive experience in combating the COVID-19 pandemic and protecting the population health, as well as reducing the negative impact of the pandemic on the economy and social welfare. President Ilham Aliyev’s statement «The main issue for us is the health of our citizens, the lives of our people» is the main goal of the policy pursued in Azerbaijan during the pandemic.
The Action Plan, prepared and approved by the Government according to the appropriate decree of the President in connection with the pandemic, includes 12 measures in 4 fields to support employment and social welfare. The Ministry of Labor and Social Protection of Population performed the appropriate work in these areas: it saved jobs of salaried employees and their salaries and daily monitored this process through the electronic system.
During the special quarantine period, about 80 percent of more than 900,000 public sector workers did not go to work but received salaries. State support was provided to those working in the pandemic-affected areas in the private sector; 794,000 private-sector workers were prevented from losing their jobs, part of the salaries of 300,000 employees was funded through the Ministry of Economy, and about 300,000 individual entrepreneurs were supported. As one of the important positive points, in 2020, the number of labor agreements in the country not only did not reduced but also increased by 150,000 or 10%, and the salary fund grew by about 12%.
One-time payment programs were implemented, covering low-income people, including those unemployed and informally employed who lost their jobs due to the special quarantine regime; sustainability and early payment of social benefits every month, expanding active employment measures and the coverage of unemployment insurance, providing social services at home to more than 15,000 lonely and disabled people over 65, and providing 300,000 food rations to vulnerable families with the support of social partners have been ensured last year.
By the President’s order, the number of paid social jobs has reached 90,000. Note that the paid social work program is becoming more and more diversified, and its areas are expanding based on joint projects with appropriate agencies. The program provides both employment and monthly salaries to the unskilled workers, gives them a chance to acquire basic labor skills and professional knowledge in the various relevant fields of activity. These professional skills will further allow them to get independent employment opportunities.
During the pandemic, the self-employment program has further been expanded, and by 2020, more than 12,000 families have created small family farms under the program, which is 20% more compared to the previous year. In 2021, work is underway to cover more than 16,000 people with this program. (Poster-5) Thus, the number of people involved in the program increased by 13.6 times compared to 2017, when the program started. Note that in May 2019, the International Social Security Association awarded the self-employment program with a special Good Practice Award.
During the special quarantine regime, payment of disability and unemployment insurance and appropriate targeted social assistance, allowances for those with a break in vocational training continued, and other support measures were taken.
These support measures, which covered about 5 million citizens in general, were another manifestation of the President’s idea that «our state stands always together with the citizen.»
CE: What measures are being taken in the country to reduce informal employment, and have positive results been achieved in this area?
Sahil Babayev: Coordinated systematic measures are being taken in Azerbaijan against informal employment. The Commission for the Regulation and Coordination of Labor Relations was established by the President’s Decree dated March 17, 2017, and the “Action Plan to Prevent Informal Employment in the Republic of Azerbaijan” was approved by the Decree dated October 9, 2017.
On this basis, to prevent informal employment, purposeful work is underway on improving the appropriate regulatory legal acts and administration, strengthening control measures, establishing a monitoring and evaluation system, arranging information and propagation activities, etc.
Note that in parallel with the penalties in this area, important stimulus measures – significantly increasing minimum wages, reducing simplified tax rates, simplifying tax procedures, optimizing tax and social insurance burden, as well as performing actions and reforms in the field of social insurance premiums, play a great role and yields good results in the transition from informal to formal employment. On the other hand, a large-scale campaign is underway among employers and employees to raise their awareness of the benefits of labor agreements and the negative consequences of informal employment. Regular meetings are held with employers to acquaint them with labor legislation and its application, and the negative consequences of informal employment. I.e., combating informal employment is underway at the level of both administrative penalties and incentives and public awareness.
All these measures have brought positive results. In general, the number of labor agreements has increased by about 400,000 or 30% over the past three years. The growth dynamics were also observed in the number of people covered by the individual accounting system. The number of personal accounts increased by 24% in 2018-2020.
This demonstrates gradually narrowing the scope of informal employment and expanding legal labor relations. An important positive manifestation of the growth dynamics in both wages and the number of salaried employees is also a steady increase in social insurance premiums. E.g., in 2018-2020, the State Social Protection Fund revenues increased by 39% or AZN 1,327 mln and reached AZN 4,748 mln in 2020. In the Fund’s revenues, compulsory state social insurance premiums amounted to 70% or AZN 1,467 mln and reached AZN 3,553 mln İn 2020. In January-August 2021, compared to the forecast, revenues from compulsory state social insurance premiums amounted to AZN 226.6 mln or increased by 10%. This growth also plays the role of additional financial aspect in strengthening the social protection of the population. We are confident that these positive dynamics will continue in the coming period.
CE: A wide digitization program is being implemented in the Ministry’s areas of activity. Does this digitization also cover the labor and employment areas?
Sahil Babayev: Of course. An important part of social reforms performed in Azerbaijan at the new reformation stage according to the appropriate instructions of President Ilham Aliyev is the widespread use of e-technologies in public social services and building a network of proactive digital services to the population and optimal automated management systems. Currently, in the country, the widespread use of e-technologies in the fields of labor, employment, social security, social services, disability, rehabilitation, adoption, etc. has become a customary practice. These innovations lead primarily to the provision of services according to the principles of transparency and efficiency, more accessibility, and convenience for citizens.
One of the important innovative achievements in the social sphere is the e-social.az portal, created by the Presidential Decree dated September 5, 2018. This portal provides citizens with access to all the social information concerning them (labor agreement, personal accounting, pension capital, social security types, land plot ownership, disability, rehabilitation, etc.) and allows operatively using more than 100 social services. Only this year, the e-social.az portal received 7.4 million applications. (Poster-6)
Currently, the Ministry of Labor and Social Protection provides electronically 105 from among 170 services. This year, 11.5 million applications were registered for the services posted on the Ministry’s e-Government portal.
Also, the Ministry’s 44 services are provided proactively through the e-infrastructure. In the last two years, through these proactive services, at the moment of origin of the citizens’ rights, the relevant assignments and services are provided to them electronically without the need for appeals. This year, 144,000 social security assignments (pensions, allowances) were made, and 108,000 social insurance accounts were opened for employees electronically and proactively.
Citizens are also provided with 30 e-reference services on the Ministry’s activities. This year, 465,000 e-references were issued through these services. Integration of 31 agencies’ databases has been ensured. The number of inquiries made by these agencies to the Ministry’s databases this year exceeded 86 million. Digitalizing the Ministry’s other 56 services is underway; thus, 94% of this agency’s services will be electronic.
Extensive digitization of social services, disability, rehabilitation, adoption, and other fields has been performed and continues.
As for labor and employment, note primarily that the official registration of labor relations has been computerized based on the Labor Agreement Notification subsystem. Labor agreements or any amendment thereto or termination thereof are documented by registration in the e-system with the e-notification of the employer. This ensures the transparency of labor relations, flexible and effective arrangement of control over the labor market, and full and objective accounting of labor relations. Information, notifications, warnings are sent to employers through this e-system.
E.g., the Labor Agreement Notification subsystem has been integrated with the relevant information system of the Compulsory Insurance Bureau; as a result, the State Labor Inspection Service immediately identifies employers who do not conclude compulsory insurance contracts via e-system and sends appropriate notifications to them.
Thus, the e-system is an important support to identify and eliminate violations of the law, associated with failures to conclude a compulsory insurance contract with an employee. Over the past two years, the number of contracts concluded by employers for the compulsory insurance of employees against the appropriate events, as well as the amount of compulsory insurance charges, has increased by 53%.
The administrative proceedings against employers who have committed administrative offenses in labor relations have already been digitalized, and this process will be performed through the e-infrastructure without direct contact with employers. Upon detecting any administrative violation, proceedings against the appropriate legal entity will be real-time enforced according to the law.
The anti-corruption policy and the work on obtaining Anti-Corruption Certificate (ISO 37001), issued by the ISO (International Standardization Organization), which is an international organization for standardization in the labor inspection system, is also underway. This standard is designed to implement an anti-corruption management system in organizations and comprises a number of mechanisms to detect, prevent, and eliminate corruption.
The recently created Employment subsystem also ensured the operative provision of real-time public employment services, their accessibility for labor market participants, including employers, and efficiency. E.g., employers can use this subsystem to quickly find and hire the skilled workers they need. Referrals to workplaces are also provided electronically. Also, the employers’ reporting to employment agencies has been fully digitalized.
Individual employment programs are already being developed electronically. The Labor Relations and Employment subsystem (LRES) is being created as an important electronic platform. The LRES will cover all functional areas of labor relations, employment, labor and employment control, accounting, and analysis. It has been designed to conclude electronic labor agreements between employees and employers, create a digital staff accounting system, apply international standards in the labor organization and protection, certify harmful workplaces, arrange the accounting of and payment for labor according to the law, and operatively provide employers with the required support in other fields. This subsystem will be an important resource for employers at all stages of implementing the labor legislation.
Herewith, it is planned to digitalize the vocational training, develop electronic textbooks and teaching aids. Note that one of the goals is arranging vocational training courses according to the requirements, terms, and conditions of international standards. As part of the vocational training system development measures, preparations are underway to start training internationally certified (ISO) specialists. This is aimed at improving the workforce competitiveness based on these standards, given the widespread implementation of innovative technologies in production.
A country’s employment map is also being prepared. The map is created based on the data from electronic information systems. The database will contain the main employment indicators for all the country’s administrative-territorial units, including labor resources, employed population, salaried employees, individual entrepreneurs, land plot owners, their sectoral distribution, unemployed people, the territorial employment program implementation status, etc. The Employed People Register, BACAR virtual information resource, Electronic Labor Exchange and Fair System, Monitoring and Mobile Inspection, Social Work Portal, etc. are also being created.
CE: How do you estimate the work of the private sector and its share of responsibility in improving the welfare of the country’s citizens, active employment programs?
Sahil Babayev: Azerbaijan has already accumulated successful experience in this field. First of all, I would like to stress that developing entrepreneurship, creating a favorable and transparent business environment, and covering entrepreneurship with full state support are among the main areas of the economic development strategy implemented under the leadership of President Ilham Aliyev. The positive point is that, in return for this state support, the private sector is also strengthening its activity within the framework of corporate social responsibility.
The private sector contributes to the social support for vulnerable groups in the country, governed by the principle of social responsibility and solidarity in the spotlight of social partnership with the Ministry of Labor and Social Protection. The private sector supports improving the welfare of the martyr families, war invalids, and other vulnerable groups in the country, providing them with apartments and private houses, cars, and motor vehicles within the framework of corporate social responsibility. They also provide food support to low-income families and vulnerable populations, and school supplies to children from low-income families.
Last year, the private sector provided low-income families and vulnerable populations with food support. Also last year, the private sector actively supported lonely citizens over 65, operatively and effectively arranging social services in their homes, when they did not get outside to protect themselves from infection.
Commercial banks are supporting the expansion of the self-employment program. Banks provide the self-employment program participants with assets, and the number of banks participating in this process has expanded. Last year, banks provided assets to more than 1,000 program participants, and this process continues this year.
CE: One of the important innovative achievements in the social sphere in Azerbaijan is the successfully implemented DOST concept. DOST centers also provide labor and employment services?
Sahil Babayev: The DOST (Sustainable and Operative Social Security) concept is an initiative of the First Vice-President of Azerbaijan, President of the Heydar Aliyev Foundation Mehriban Aliyeva. By the Decree of President Ilham Aliyev dated August 9, 2018, DOST Agency and further 5 DOST centers were opened under the Ministry in May 2019, and all the capital districts, as well as the Absheron region, were covered by DOST services.
More than 540,000 people have already benefited from DOST services. İn 2021, the level of their satisfaction with services is 98.2%.
Along with social protection and social security, medical and social expertise and rehabilitation, social insurance, etc., these centers also provide labor and employment services. In total, DOST centers provide 155 services on a single window principle in an efficient, fully transparent, modern, innovative, and polite manner. The number of citizens benefiting from the centers’ services is growing day by day.
DOST is already a brand of Azerbaijan. Currently, 14 countries are interested in implementing the DOST experience, which is an important innovation in the social sphere of Azerbaijan. It is planned to open new DOST centers in Baku and the country’s regions in the coming years. The Virtual DOST Center platform is also being developed. This platform will allow applying for DOST services from anywhere in the country. Note that the range of DOST services is constantly expanding; in recent years this expansion has amounted to 30 percent. Recently, a service of mediation in labor relations has been added to the DOST services.
CE: We started with a question about social support measures in the post-war period. At the end of our interview, we would like to get information on the work to be done by the Ministry in the liberated territories, social plans...
Sahil Babayev:Under the leadership of President, Commander-in-Chief Ilham Aliyev, large-scale construction and landscaping will be performed, and social services and rehabilitation facilities will be created as part of building the modern social infrastructure in the territories liberated by our victorious Army.
As one of the achievements of the President’s social development strategy, the rehabilitation infrastructure in Azerbaijan has been reconstructed according to modern requirements, and herewith, important work is being done to expand the network of rehabilitation facilities in the regions and increase rehabilitation opportunities. New rehabilitation and social service institutions will be established in the liberated territories, and regional vocational training infrastructure will be built to provide disabled people and children with access to affordable rehabilitation treatment. Extensive active employment programs will be implemented, and new jobs will be created in these areas to provide the population with the opportunities of employment and building their own small businesses. Herewith, a network of DOST centers and branches will be established in our liberated territories, and the appropriate design work is underway.
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