Social tensions can escalate into protests with social demands

Baku/09.05.21/Turan: On social networks and at protests social demands are often heard. People argue that social benefits and pensions paid in Azerbaijan are small, insufficient for a normal life and require their increase. Can the size of pensions and benefits in Azerbaijan be considered sufficient?

On February 5, President Ilham Aliyev signed an order "On the indexation of labor pensions", which is another step towards strengthening social protection measures and improving the welfare of pensioners in the country, the Ministry of Labor and Social Protection of the Population told Turan.

"Last year, 5 billion 743 million manats were allocated for the payment of pensions, presidential scholarships and allowances, targeted social assistance, which is 20 percent or 1 billion manats more than in the previous year," the Ministry of Labor said. The ministry noted that in terms of the purchasing power index of the minimum and average pension, Azerbaijan remains the leader in the CIS.

"By the decrees of the Head of State, the growth of social payments has continued since the beginning of this year. The size of presidential scholarships has been increased by 66.7 percent for martyr families; by 20 percent for the title of the national hero of Azerbaijan; by 100 percent for participants in  the Second World War; by more than 50 percent for war invalids and on January 20, equated to war invalids, a monthly presidential scholarship was established for heroes of the Patriotic War in the amount of 2 thousand manats."

The ministry stressed that the latest increase in pensions covers 1,140,000 pensioners, or 93 percent of pensioners.

Other retirees are persons who have been assigned a pension with special conditions. By the order of the head of state, the pension capital in the insurance part of personal accounts was also indexed in accordance with the annual level of the consumer price index for 2020 and increased by 2.8 percent from January 1. This also serves the interests of persons working under an employment contract and participating in the social insurance system, and indicates that the pension capital in their personal accounts increases not only as a result of monthly social insurance contributions from their wages, but also through annual indexation by the state. ...

The ministry noted that a decree “On Amendments to the Law“ On Labor Pensions ”signed by President Ilham Aliyev on February 27, a significant increase in the minimum size of labor pension has strengthened the social protection of pensioners. Since March 1 of this year, the minimum size of the labor pension was increased by 38.5 percent from 116 to 160 manats. This order is another manifestation of special concern for strengthening social protection of the population, improving the welfare of vulnerable groups.

The ministry noted that the increase in the minimum pension covers 233 thousand pensioners, including 140 thousand people who receive a disability pension. “In general, the overall average growth of pensions for 233 thousand people is up to 40 percent. For this, 41 million manat will be allocated from the State Social Protection Fund under the Ministry of Labor and Social Protection of the Population for 10 months of this year (March-December), and 49 million manat during the year. According to the purchasing power index, after the growth, our country is in the top ten CIS countries. "

According to the Ministry, this year alone, due to the new changes, up to 19.5 thousand citizens will receive the right to a labor pension, and their income is expected to increase significantly. As for social benefits, last year benefits increased by 15 percent. The mechanism of targeted social assistance has also been expanded. In 2020, targeted assistance was provided to 77 thousand members of 322 thousand families. This is 19 thousand more than in 2019, and with an increase of 15 percent, the average monthly amount reached 240 manat.

The department added that as a result of investigations carried out in recent days, it was established that 12809 people received pensions in an amount lower than that provided by law. “In order to ensure social justice, the pension amounts of these persons were legally recalculated and increased. To ensure this growth, additional funds were allocated 8 million manat per year. In addition, 14.5 million manat, which should be paid for the previous period, is paid in installments with the addition of monthly pensions.”

Economist Natig Jafarli said that one of the most serious problems in Azerbaijan is growing social tension. “This was caused both by the consequences of the pandemic - unemployment increased, and by very rapid inflation. Our food inflation has almost reached double digits,” he said.

The expert noted that this also seriously affects the real incomes of people, because, although nominal incomes increase slightly (for example, indexation is carried out due to the growth rate of average monthly wages, which over the past two years amounted to about 3 percent), the double-digit inflation eats up this growth and even leads to a decrease in real incomes, TNCs become poorer.

Jafarli believes that there are two problems in this area in Azerbaijan.

“According to official data, the funds allocated for the social sphere make up 40 percent of the state budget, that is, about 10 billion. This includes spending on health care, education, salaries, scholarships, benefits. This is a fairly large figure. We just have a problem that these funds are spent normally and transparently. This is the technical and corruption side of the issue. Most of the funds allocated to citizens melt on the road,” he said.

The second problem, in his opinion, is that the sharp difference between official statistics and reality in Azerbaijan is manifested in the subsistence minimum, wages.

“Our subsistence minimum is 196 manats. Based on this, the minimum wage is 250 manats, and the minimum pension is about 260 manats. This calculation is based on the norms left over from Soviet times. In Azerbaijan itself, this last changed 6-7 years ago. The world has switched to completely different calculation rules, and if Azerbaijan also switches to these rules, it will become clear that 80 percent of our population lives below the poverty line. By developing numbers, the government decides the minimum wage, pensions,” Jafarli said. –0--