Comments by Gunay Quliyeva

Chief Analyst

Center for Analysis of Economic Reforms and Communication

According to the State of Economic Inclusion Report 2021 of the World Bank, the inclusion program implemented by Azerbaijan can serve as an example for other countries.

The State of Economic Inclusion Report reviewed Azerbaijan’s Internally Displaced Persons Living Standards and Livelihood Project. State of Economic Inclusion Report 2021, published for the first time, conducted a global assessment of economic inclusion programs for extremely poor and vulnerable groups. Trying to fill a significant information gap in this area, the report provides a systematic overview of economic inclusion programs for the first time and clarifies the opportunities for countries to build a decent future for the poorest people through the social protection system, new jobs, and ways to increase investment in minimum economic means and access to finance. The report was prepared through the analysis of 219 active economic inclusion programs implemented in more than 75 countries. It also explores opportunities to expand graduate programs.

The report states that an improved understanding of basic cost structures is a vital starting point to assessing the cost-effectiveness of economic inclusion programs. The report opens up new opportunities to reduce the complexity of cost analysis of government and non-government programs.

Also, the report demonstrates that the overall price tag for economic inclusion programs varies substantially, and the “sticker price” approach to costing economic inclusion programs can be faulty. Thus, the value of economic inclusion programs is determined by the value created using grants, remittances, transfers of assets or means of production, and one of the forms of social security payments. According to the results of the report, the per capita value of 219 economic inclusion programs analyzed for the period (average 3 and a half years) during 41 years varies between 2,253 US dollars (2011 purchasing power parity).

Coming to the cost of inclusion programs, human resources and labor costs were the most significant cost factors. Costs also directly depend on the type of program. As shown in the report, since the program selected in Azerbaijan is mainly focused on the development of economic activity and self-employment, the main cost component makes 56 percent of the total costs and is taken as an asset transfer. For delivery and staff costs as a percentage of total costs, the 14 percent rating of Azerbaijan differs slightly from the indicators of the analyzed program with an average of 13 percent.

The report states that for the asset transfers to ensure the economic development of vulnerable population groups by inclusion programs (at 1,469 US dollars - 67 percent of the average annual consumption per capita) Azerbaijan holds a leading position among the listed countries. Grants provided within Internally Displaced Persons Living Standards and Livelihood Project allow to register and operate as local liability companies and open bank accounts.

Thus, the analysis conducted during the preparation of the report shows that Azerbaijan is successfully implementing economic inclusion programs to provide decent living conditions for vulnerable groups, and this experience will be widely used in the great return to Karabakh.