Onder, Harun2013-01-312013-01-312013978-0-8213-9759-6https://hdl.handle.net/10986/12228Azerbaijan experienced a 'golden age' in the last decade, during which the average growth rate reached record high levels and poverty decreased significantly. On average, the economy grew by 15.3 percent per year in real terms during this period, mainly driven by the oil sector (21.5 percent growth per year), but with a significant contribution from the non-oil sector (11.1 percent per year). As a result, poverty declined dramatically from 49.6 percent in 2001 to 15.8 percent in 2008 the latest year for which household survey data was available when this report was prepared. This report takes an inclusive growth approach to investigating the ways in which the country's high growth was translated into significant poverty reduction. First chapter summarizes the sources of growth in Azerbaijan with an emphasis on structural transformation and discusses highlights of the inclusive growth methodology. Second chapter explores how growth helped to reduce poverty. Third chapter analyzes the sustainability and inclusiveness of the recent growth. Finally, fourth chapter focuses on the structural obstacles that constrain further inclusive growth in Azerbaijan. The last chapter recommends some policies to overcome these obstacles. The main findings of this report call for a careful strategy in promoting further inclusive growth in Azerbaijan. The mechanisms that facilitated drastic reductions in poverty in the last decade a strong rise in fiscal transfers and in the real wage were made possible by the oil boom. However, these mechanisms also reduced the pace of structural transformation in the Azerbaijan economy. Distorted incentives in demand and supply sides of the labor market have seemed to weaken the correlation between productivity growth and employment shares. This report finds that the failure to follow a fiscal rule over the past decade has led to excessive domestic absorption with a resulting barriers against further development and diversification in the tradable sectors (principally agriculture and manufacturing) and against employment creation within those sectors, as well as leading to an unsustainable growth in public expenditures, and to inadequate long-term public savings in the Oil Fund. Thus, the reassertion of a fiscal rule that constrains domestic absorption and promotes economic diversification is a necessary condition for achieving sustained inclusive growth.en-USCC BY 3.0 IGOACCESS TO MARKETSACCOUNTINGAGE GROUPAGRICULTURAL GROWTHAGRICULTURAL LANDAGRICULTURAL OUTPUTAGRICULTURAL SECTORAGRICULTURAL SERVICESAGRICULTURAL WAGESAUDITINGAVERAGE PRODUCTIVITYAVERAGE WAGEAVERAGE WAGESBANKSCAPITAL FORMATIONCASH TRANSFERSCENTRAL PLANNINGCOLLEGE EDUCATIONCOMMUNITY GROUPSCONFLICTCONSOLIDATIONCONSUMPTION EXPENDITURESCREATING JOBSCURRENT PRICESDISTORTED INCENTIVESDIVIDENDSDOMESTIC MARKETECONOMIC ACTIVITYECONOMIC DIVERSIFICATIONECONOMIC GROWTHECONOMIC INTEGRATIONECONOMICSEMPLOYABILITYEMPLOYEEEMPLOYMENTEMPLOYMENT DYNAMICSEMPLOYMENT GENERATIONEMPLOYMENT GROWTHEMPLOYMENT OPPORTUNITIESEMPLOYMENT OUTCOMESEMPLOYMENT RATEEMPLOYMENT RATESEMPLOYMENT SERVICEEMPLOYMENT SHAREEMPLOYMENT STATUSFARMERSFEMALE EMPLOYMENTFEMALE PARTICIPATIONFINANCIAL INSTRUMENTSFINANCIAL SERVICESFIRM SIZEFISCAL DEFICITSFISCAL POLICIESFISHINGFOOD SAFETYFORESTRYFORMAL LABOR MARKETFORMAL SECTOR WAGESGOVERNMENT EXPENDITURESHEALTH SERVICESHIGH EMPLOYMENTHOUSEHOLD CONSUMPTIONHOUSEHOLD SURVEYIMPACT ON POVERTYINCIDENCE ANALYSISINCIDENCE OF POVERTYINCOMEINCOME DISTRIBUTIONINCOME REDISTRIBUTIONINFLATIONINFLATION RATESINFORMAL ECONOMYINFORMAL EMPLOYMENTINNOVATIONINSURANCEINTEREST RATESIRRIGATIONJOB CREATIONJOB FAIRJOB FAIRSJOB MARKETJOB PLACEMENTJOB SEARCHJOB SECURITYJOB SEEKERSJOBSLABOR CONTRACTSLABOR FORCELABOR FORCE PARTICIPATIONLABOR MARKETLABOR MARKET CHARACTERISTICSLABOR MARKET CONDITIONSLABOR MARKET INDICATORSLABOR MARKET OUTCOMESLABOR PRODUCTIVITYLABOR PRODUCTIVITY GROWTHLABOR SHARELABOR SUPPLYLAND OWNERSHIPLAND REFORMLEGAL FRAMEWORKLEGISLATIONLIVING STANDARDSLOW EMPLOYMENTMACROECONOMIC FLUCTUATIONSMARKET DISTORTIONSMIGRATIONMINIMUM WAGEMONOPOLIESNOMINAL WAGESOILOIL PRICESOIL SECTOROUTPUTSPENSIONSPER CAPITA CONSUMPTIONPOOR HOUSEHOLDPOOR HOUSEHOLDSPOVERTY ALLEVIATIONPOVERTY ALLEVIATION STRATEGYPOVERTY ASSESSMENTPOVERTY LINEPOVERTY RATESPOVERTY REDUCTIONPOVERTY REDUCTION STRATEGYPRIMARY SOURCEPRIVATE SECTORPRIVATE SECTORSPRODUCTION COSTSPRODUCTIVE ACTIVITIESPRODUCTIVE EMPLOYMENTPRODUCTIVITY DECOMPOSITIONPRODUCTIVITY GAINSPRODUCTIVITY GROWTHPUBLIC EXPENDITURESPUBLIC HOUSINGPUBLIC SAVINGSPUBLIC SPENDINGQUOTASREAL WAGEREAL WAGESREMOTE AREASRENTSRETAIL TRADERETIREMENTRUNNING WATERRURALRURAL AREASRURAL EMPLOYMENTRURAL LABORRURAL POORRURAL POPULATIONRURAL POVERTYRURAL TRANSFORMATIONRURAL WORKERSSAFETYSAFETY REGULATIONSAFETY REGULATIONSSAVINGSSICK LEAVESKILL PREMIUMSOCIAL ASSISTANCESOCIAL CAPITALSOCIAL INCLUSIONSOCIAL INSURANCE PROGRAMSSOCIAL SECURITYSOCIAL SERVICESSUSTAINABLE GROWTHTARGETINGTAX RATESTECHNOLOGICAL CHANGETOTAL EMPLOYMENTTOTAL FACTOR PRODUCTIVITYTOTAL UNEMPLOYMENTTRANSFER PROGRAMSTRANSPORTUNEMPLOYEDUNEMPLOYED PEOPLEUNEMPLOYMENTUNEMPLOYMENT ASSISTANCEUNEMPLOYMENT BENEFITUNEMPLOYMENT RATEUNEMPLOYMENT RATESUNEMPLOYMENT SPELLSUNINTENDED CONSEQUENCESURBAN WORKERSVOCATIONAL EDUCATIONVOCATIONAL TRAININGWAGE GROWTHWAGE POLICYWARWORKERWORKERSWORKING POORYOUTH EMPLOYMENTYOUTH UNEMPLOYMENTWorld Bankhttps://doi.org/10.1596/978-0-8213-9759-6