Employment Support Project

active

The population of Azerbaijan is about 9.9 million people of which 52.8 percent urban and 47.2 percent rural. Azerbaijan has enjoyed high oil-driven economic growth which has helped to achieve considerable progress in poverty reduction. The official national poverty rate has dropped from 14.6 percent in 2010 to 4.8 percent in 2013, however, it gradually increased to 5.9 percent in 2016. Poverty in rural areas remains high, and considerable disparities exist across regions. The public administration is the largest employer for the urban population, followed by construction, manufacturing, and services. In cities, the main income source is wages, whereas, in rural areas, it is self-employment and agricultural income. About 40 percent of the working population is employed in agriculture sector. The oil sector is capital intensive and provides low employment. Recent oil price shock resulted in slowing the oil-dependent growth and exposed to poverty risk about 60 percent of the population. Rural populations are the most vulnerable. There is a significant gap between rural and urban areas in level of educational attainment and lack of adequate access to basic services in rural areas.The proposed project is in line with the CPF objectives. The proposed PLR of the Azerbaijan CPF FY16-20 extends the implementation period of the CPF until FY21 and reconfirms the importance of increased investments in human development to address the existing social challenges, including high informality, underemployment, and low labor force participation, particularly among women and youth. Increased investment in human development would help address the rural-urban disparities, as well as those across income groups and gender. One of the priorities for the remainder of the CPF mentioned in the PLR is to contribute to the government’s self-employment program. In this sense, the proposed project is in line with Focus Area 1, in particular Objective 1.2: Support access to, and satisfaction with, public services and Focus Area 2 of the CPF (Economic Competitiveness), as per the updated structure outlined in the proposed PLR.The proposed project aims to improve employment outcomes (employment status and earnings) among vulnerable groups of jobseekers (youth and women in particular). The project will achieve this by (i) scaling up and improving the effectiveness of the Self-Employment Program (SEP); (ii) strengthening program implementation capacity in the State Employment Services (SES), and (iii) improving monitoring and evaluation practices. The proposed project will be structured around three interrelated components: • Component 1: Enhancing the Scope and Effectiveness of the SEP; • Component 2: Strengthening employment services and programs; and • Component 3: Project Management and Monitoring and Evaluation.