An analysis of the social aspects of the government`s report for 2022

The report on the activities of the Cabinet of Ministers of the Republic of Azerbaijan in 2022 was heard. After a short discussion, the report of the Cabinet of Ministers was adopted after voting. This time, the procedures for discussing and accepting the report differed from the previous ones. So, the activity of the Cabinet of Ministers regarding the results of the last year was assessed in a meeting held during the day. Addressing the parliament, Prime Minister Ali Asadov[1] said that as a result of the purposeful, successful foreign and domestic policy implemented under the leadership of the President of Azerbaijan, Mr. Ilham Aliyev, the international reputation of our country has increased, the development of our national economy has continued, the defense capability has been strengthened, and the social welfare of the population has improved. In the reporting year, significant measures were taken by the government to ensure economic activity, enhance the social protection of the people, reconstruction and restore territories liberated from occupation, defense and army building, development of education and healthcare system, and provide food security. MPs speaking in the debates stated that the government worked productively last year against the background of the complex political and economic events and that it adequately coped with the tasks and considered the implementation of programs aimed at accelerating the economic development of the country and improving the welfare of the people to be commendable.

The Labor and Social Policy Committee Chairman of the Milli Majlis, Musa Guliyev, said that the government has duly fulfilled the tasks set for 2022. He noted that in the reporting year, macroeconomic stability was achieved in our country, and effective measures were taken to eliminate the adverse effects of inflation and improve the population’s welfare. In 2022, the average monthly salary, pension, allowance, and other social payments will be increased, and relevant decisions have been made to ensure the social protection of the population. The committee chairman pointed out that during the post-war period, 122,000 people were covered by 264,000 social support measures, 4,500 families of martyrs and war veterans were provided with apartments, 324 war-disabled persons were given cars, 2,538 family members of martyrs and war veterans were provided with jobs. Furthermore, 40,000 people were provided with suitable jobs during the reporting period, of which 16,100 people were involved in the self-employment program. At the same time, he said that in 2022, necessary measures were taken regarding the digitalization of social services, and a number of successful projects were implemented in the fields of health, education, culture, and tourism.[2]

At the same time, at the meeting of the Milli Majlis on March 17, during the discussion of the government's report, the Chairman of the Unity Party, MP Tahir Karimli, said[3], "We are glad that we saved on pensions. Compared to 2009, the number of pensioners decreased by 160,000 people. It turns out we vanquish only pensioners. Then we say that our incomes have increased."

Therefore, in this article, I would like to evaluate the statements of the Prime Minister and the members of Milli Majlis regarding further improving the social welfare of the population and strengthening social protection. I will explain my opinion by analyzing the figures for 2022.

According to the statement of the State Statistical Committee[4], as of January 1, 2023, 1 million 114 thousand 200 pensioners were registered in Azerbaijan. However, as of January 1, 2022, their number was 1 million 200 thousand 500 people. So, the number of pensioners decreased by 86 thousand 300 people in the last 1 year. If the decline continues at this pace, many of the elderly in Azerbaijan will not be able to get the right to a pension. In 2022, 62.5 percent of pensioners received old-age pensions, 24.5 percent received disability pensions, and 13.0 percent received pensions due to the loss of the head of the family. The average amount of monthly pensions appointed last year increased by 12.1 percent compared to the corresponding period of the previous year and amounted to 372.1 manats and was equal to 44.3 percent of the average monthly salary. Currently, pensioners make up 11.0 percent of the population. The corresponding indicator is close to 30 percent in Russia, higher than 26.5 percent in Belarus. Thus, the number of pensioners in Belarus, which has a smaller population than Azerbaijan, is 2 million 532 thousand people. According to the CIS Statistical Committee[5], the number of pensioners per 1,000 people is 111 in Azerbaijan, 157 in Kazakhstan, 158 in Armenia, 258 in Ukraine, 262 in Moldova, 267 in Belarus, and 297 in Russia. Let me also mention that the average pension amount in Russia and Belarus is higher than in Azerbaijan.

For information, let me note that[6] as of January 1, 2021, 1,228.8 thousand (as of January 1, 2020, 1,270.6 thousand) pensioners were registered in the State Social Protection Fund under the Ministry of Labor and Social Protection of Population, which was 12.3 percent of the country's population.

A number of factors have determined the decrease in the number of pensioners in Azerbaijan in recent years. Among them, the government's policy of reducing the number of pensioners and the deterioration of the demographic situation in the country stand out. The government avoided the reduction of transfers from the state budget to the social protection fund through the reduction of pensioners despite the fact that in the first 2 months of 2023, the surplus (remaining, unspent money) in the state budget was 2 billion 217 million 200 thousand manats. With these funds, it is possible to increase all types of labor pensions by at least 40 percent.

• High retirement age. Since the retirement age for women has been increased by 1 year every 2 years, the number of retirees among them is decreasing every year. For your information, 12 years ago - in 2010, men who reached the age of 62 and women who reached the age of 57 in Azerbaijan had the right to an age-related labor pension if they had at least 12 years of insurance experience. The age limit for men was increased by 6 months every year from January 1, 2010, to January 1, 2012, and for women from January 1, 2010, to January 1, 2016. Later, the age limit for men was increased by 6 months every year from July 1, 2017, to July 1, 2021, and women from July 1, 2017, to July 1, 2027. As a result, in the last 12 years, the retirement age of men has increased from 62 to 65, and women’s retirement age has risen from 57 to 63 (it will be 65 years in 2027).[7]
• Reduction in the number of pensioners due to age. According to the demographic statistics for 2021, in 2019, 49.8 percent of men in Azerbaijan died before age 65, before the retirement age. In 2020, 52.3 percent, and in 2021, 47 percent died before retirement age. 76,878 people died in 2021. According to SSC[8], 40 percent of those who died were people under 65, that is, people who did not reach retirement age. The number of men who died before reaching retirement age was higher. 47 percent of the men who died during the year, or 21 thousand 339, died before retirement age (65 years). Although this indicator among women is low, the dynamics tend to increase due to the increase of their retirement age to 65 years by 2027. As a result, the number of old-age pensioners in 2021 decreased from 707,000 to 696,000 in 2022. Therefore, the number of pensioners according to age decreased by 11,000 in the last 1 year.[9]
• Reduction of the number of pensioners due to disability. In 2021, 347.3 thousand people received a disability pension. This indicator was 272.9 thousand people in 2022. Thus, in the last 1 year, the number of pensioners due to disability decreased by 74,400 people.
• Decrease in the number of pensioners due to the loss of the head of the family. So, in 2022, 144,800 families received pensions for losing their heads. The corresponding indicator was 146.2 thousand people.

But what is increasing?

• The number of people receiving age (elderly benefits) is increasing. So, as of January 1, 2023, the number of people receiving age benefits was 128,300. However, 1 year ago, as of January 1 of last year, their number was 113.6 thousand people. As of January 1, 2021, the number of people receiving age benefits was 100.2 thousand (82.4 thousand as of January 1, 2020).[10] Thus, the number of people receiving age benefits increased by 14.7 thousand people during the last 1 year, 28.1 thousand people during the last 2 years, and 45.9 thousand people during the last 3 years. So, over the past 3 years, up to 46,000 people have reached retirement age but have not been able to get the right to a pension.
• The number of people receiving the minimum pension is increasing. Based on the corresponding change in the Law of the Republic of Azerbaijan on Labor Pensions, the minimum amount of labor pension increased by 16.6 percent and was set to 280 manats from February 1, 2023. Thus, since the minimum pension amount was raised from 240 manats to 280 manats, the insurance capital required to obtain the right to a pension increased from 34,560 manats to 40,320 manats within 1 year. If an employee works for 38.9 years with the minimum wage (345 manats), he can collect this amount and receive a minimum pension. Thus, minimum pension recipients have increased from 65,000 to 100,000 in the last year.
• The number of pensioners under special conditions is increasing. In September last year, their number was more than 125.4 thousand people.

Furthermore, to ensure the social protection of the population, various types of monthly social allowances are assigned to individuals from separate categories, and their number is also decreasing. So, as of January 1, 2023[11], as for the state of disability, the number of people who received a pension persons with disabilities is 209.5 thousand people, of whom 46.7 thousand are under the age of 18 (206.1 thousand and 55.8 thousand, respectively), pension for the loss of the head of the family - 56.1 thousand people (54.3 thousand), and other types of benefits - 24.3 thousand (22.9 thousand). However, in 2021[12], as for the state of disability, 182.5 thousand people (180.5 thousand in 2020) received a pension for the loss of the head of the family, 49.2 thousand people (47.0 thousand in 2020) - children under 18 receiving benefits due to limited health opportunities - 52, 7 thousand people (63.0 thousand in 2020), and other benefits - 27.2 thousand people (28.3 thousand in 2020).

As of January 1, 2023, 290.8 thousand members of 65.5 thousand low-income families received targeted state social assistance, and its average monthly amount per person was 88.09 manats. For comparison, let me note that as of January 1, 2021, 324,000 members of 77,300 low-income families received targeted state social assistance, and its average monthly amount per person was 57.10 manats. As can be seen, compared to the recipients of state social assistance addressed to January 1, 2021, their number decreased by 11.8 thousand families on January 1, 2023.

Moreover, 382 thousand of people of various categories were assigned presidential pensions on January 1, 2021; however, on January 1, 2023, their number was reduced by 94.2 thousand to 287.8 thousand.

As can be seen, the number of pensioners in the country decreased by 86 thousand 300 people in the last 1 year. Compared to 2019, the number of people receiving disability benefits in 2022 decreased by 3.86 times. Compared to 2020, the number of recipients of state social assistance for 2022 decreased by 11.8 thousand families; during that period, 94,200 people of the president's pension fell to 382,000 people from different categories. Thus, the state’s social policy in Azerbaijan is based not on the social protection of the population but on exclusion from social security.

[1] https://nk.gov.az/az/article/2719/

[2] https://www.meclis.gov.az/news.php?id=4677&lang=az

[3] https://storage.googleapis.com/qurium/www.meydan.tv/az-article-milli-meclisde-muzakireler-gucumuz-ancaq-pensiya-alanlara-catir.html

[4] https://stat.gov.az/news/index.php?lang=az&id=5468

[5] http://new.cisstat.org/ru/

[6] https://stat.gov.az/news/index.php?lang=az&id=4858

[7] https://www.bbc.com/azeri/other-news-39231338

[8] https://stat.gov.az/source/demoqraphy/

[9] https://stat.gov.az/news/index.php?lang=az&id=5468

[10] https://stat.gov.az/news/index.php?lang=az&id=4858

[11] https://stat.gov.az/news/index.php?lang=az&id=5468

[12] https://stat.gov.az/news/index.php?lang=az&id=4858