If the number of unemployed is unknown, can the problem of unemployment be solved?

Azerbaijan is set to introduce new legislation aimed at addressing unemployment and aiding job seekers, as highlighted in the World Bank Group's 2024 Business Ready report on the "workforce" indicator. The initiative underscores the government's commitment to tackling employment challenges in the country.

According to the State Statistics Committee (SSC), the unemployment rate in Azerbaijan stood at 5.5 percent as of March 2024. By April 1, the economically active population had risen to 5.253 million, with 4.966 million individuals employed. This leaves approximately 286,900 people officially unemployed. However, the number of salaried employees, those working under formal employment contracts, is reported to be 1.748 million. Officials attribute this discrepancy to informal employment practices, though independent experts argue that the official figures do not fully capture the reality.

Rufat Guliyev, a member of the Milli Majlis Committee on Economic Policy, Industry and Entrepreneurship, in an interview with Turan, touched upon a double problem - unemployment and inflation. "There is no country with a market economy that does not face these two significant issues. Efforts to combat one often exacerbate the other. Unemployment in Azerbaijan is around 5 percent, and the state is managing it through regulation, support, and social payments," Guliyev explained.

Guliyev emphasized Azerbaijan's neoliberal approach to market economy development, noting the importance of political will and the promotion of micro, small, and medium-sized enterprises (MSMEs) to reduce unemployment. He projected that these efforts could potentially lower the unemployment rate to 1.5 percent. He stressed that programs by the Ministry of Labor and Social Protection should align with MSME development to effectively reduce unemployment levels.

Particularly concerning is the high rate of unemployment among young people. Guliyev called for an increase in technical vocational schools, citing the success of the Lankaran Vocational Lyceum, where 95 percent of graduates find employment. He highlighted that market economies often see reluctance among businesses to hire individuals over 35, and vocational schools could help older individuals transition to new professions.

Economist Natig Jafarli pointed out the complexities of registering unemployment in Azerbaijan. "The registration process involves numerous procedures, deterring many from completing it. Consequently, the number of unemployment claims is significantly lower than it might otherwise be," Jafarli noted.

Jafarli also criticized the mismatch between job offers and qualifications, leading many to decline low-paying or unsuitable positions and subsequently being removed from unemployment lists. He argued for a more accurate reflection of employment statistics, suggesting that informal workers, estimated to number around 2 million, should be formalized to provide a clearer picture of unemployment and labor market needs.

Despite government efforts to formalize informal jobs, a noticeable increase in formally hired workers has yet to materialize. Jafarli advocated for the adoption of international practices to better capture the reality of the job market, stressing the need for accurate data to develop effective labor market strategies.

As Azerbaijan prepares to implement these new measures, the focus remains on creating a more transparent and supportive environment for job seekers and the unemployed, with the ultimate goal of fostering economic stability and growth.