HOUSEHOLD BUDGET SURVEY EVALUATION

1. HOUSEHOLD BUDGET SURVEY EVALUATION Research Report Baku, January 27, 2010 Ambassador Hotel

2. PROJECT OVERVIEW 1 2 3 4 5 PRECURSORS • State Program on Poverty Reduction & Sustainable Development (2008-2015) • CSOs given the opportunity to monitor the implementation of welfare programs GOALS & OBJECTIVES • Assess infrastructure and quality of public services to meet basic human needs • Analyze current spending levels and structure • Evaluate family spending needs • Provide recommendations on the Household Budget Survey methodology • Develop more accurate poverty measures • Identify inconsistencies in minimum subsistence level estimates • Develop recommendations to increase access to public services • Focus on access to education, health and social protection • Address regional differences

3. METHODOLOGY 1 2 3 4 5 RESEARCH APPROACH: SURVEY: • A combination of random, systematic and stratified sampling • Representative sample • 5,754 women & 5,986 men • 1,550 urban & 1,450 rural households ADVOCACY: • Public dialogue • Questionnaires drafted in discussion with government agencies, CSOs and other stakeholders • Resource complementarity • Complements ERC initiative with UNICEF

4. SURVEY RESULTS IN BRIEF 1 2 3 4 5 Over 2007-2009 public services spending increased by nearly 90% to 3.2 billion AZN

5. ACCESS TO EDUCATION 1 2 3 4 5 Spending on education  3.1% of GDP vs. 5% in the EU • 1,600 new schools established over the past 5 years CONCERNS • Access to preschool education • 93% of respondents do not send their kids to preschool because: • Quality of secondary education • 23% of students failed their high school graduation exam • Over 60% could not pass general university admission test • Azerbaijan doing poorly in international education rankings

6. HEALTH SERVICES 1 2 3 4 5 Health spending  $65 per capita vs. $100 internationally recommended • 90% of respondents are satisfied with the quality of health services CONCERNS • Informal payments • Rising costs of transportation to medical facilities • Rising costs of hospitalization Many resort to self- and home-treatment Reasons for not buying the necessary medication

7. SOCIAL PROTECTION 1 2 3 4 5 Social protection spending  2.9% of GDP vs. 8% in OECD countries • Official poverty level constituted 13.2% CONCERNS • Perceived poverty is higher than official rate (regional differences) • Nearly 50% believe their children live in below average conditions • 59% would not consider having another child even with additional resources I am satisfied with the economic level of my household

8. REGIONAL DIFFERENCES 1 2 3 4 5 Monthly targeted social assistance by region Source: State Statistical Committee

9. CONCLUSIONS 1 2 3 4 5 Budgeting • Public services spending structure is not optimal • Bulk of spending absorbed by direct payments not long-term investments Infrastructure and quality of public services • Poor access to preschool education • Declining quality of secondary education Poverty level • Informal payments and price fluctuations affect minimum subsistence level • Social benefits do not cover minimum subsistence level for children

10. RECOMMENDATIONS 1 2 3 4 5 Methodology improvements • Adopt relative poverty as a measure of poverty in Azerbaijan • Calculate poverty on the basis of household consumption levels Poverty Reduction • Develop tailored poverty alleviation programs for individual regions • Broaden the health insurance program and increase access to health services • Increase the autonomy of health care providers • Conduct an evaluation of secondary schools and increase their autonomy • Eliminate informal payments for health services and education

11. THANK YOU ECONOMIC RESEARCH CENTER Baku, Azerbaijan AZ1065 JafarJabbarli 44, Caspian Plaza 3, floor 9 Phone: (+99412) 437 32 30 Fax: (+99412) 437 32 40 E-mail: office@erc-az.org; erc-az@azeurotel.com www.erc-az.org