DOST: YOUR FRIEND IN DEED

2018 can rightly be called a milestone in terms of the implementation of major reforms in the social sphere of Azerbaijan. Successful operation of ASAN Centres and their subsidiaries encouraged the government to apply its experience in other areas of public services. Thus, the government initiated the Agency for Sustainable and Operational Social Security (DOST), which is going to provide almost all social services through its centres, similar to ASAN Xidmət, from the calculation of pensions to solving problems of employment and social security.

Thus, the year of 2019 promises to be an important milestone in the fight of the government against corruption and the elimination of all negative aspects and public discontent with the level of social services.

Automation of all social services

The idea of ​​creating DOST centres was born on the wake of reforms implemented by the the Ministry of Labour and Social Protection of the Population throughout the past year. In August 2018, President Ilham Aliyev signed the decree on the establishment of a legal entity under public law, Agency for Sustainable and Operational Social Security (DOST) (Dayanıqlı və Operativ Sosial Təminat - DOST). Reserve Fund of the President allocated ₼2 million for the operation of the agency and its local branches. Later, in November, it was decided to add another ₼3.5 million to this amount.

In one of his speeches, President Aliyev noted that the name chosen for the new agency is not accidental (DOST in English means a friend).Speaking about serious reforms implemented in the social sphere, which are designed to ensure social justice by maximising transparency and to prevent any violations, president underlined the symbolism in the name of the newly created agency: “I believe that our citizens will soon see positive changes in this area. They already see it. But we are still in the first stage of reforms.”

On December 11, President Aliyev signed another decree, which approved the authorised capital of DOST at ₼10 million and will be funded through the state budget. The decree particularly mentions that the maintenance costs of the agency and the DOST Centres will be paid from the state budget, the generated income of the agency, the Unemployment Insurance Fund and the State Social Protection Fund. Supervisory Board (SB) and the Board of Directors will be the governing bodies of the agency.

“DOST will make the introduction of innovative solutions possible for the provision of services in the areas of labour, employment, social protection and welfare. The “single window” principle will ensure efficiency, transparency, responsibility and convenience,” Minister of Labour and Social Protection Sahil Babayev said at the first meeting of the Supervisory Board of the agency.

According to Babayev, in the next seven years, it is planned to open 31 DOST centres in Azerbaijan, which will provide up to 126 different types of social services to citizens, including proactive services. Thus, the nationals of Azerbaijan will be notified in advance of the access to various electronic services or the availability of social security services (pensions, benefits, social assistance, etc.) in the centres. They will receive notifications through e-mail and mobile SMS. In other words, the citizens can get, for example, information on the availability of pensions or other social benefits in places. Also, they will be able to receive proactive notifications about the status of disability assessments.

 “Introduction of the new practice will eliminate routine works associated with the collection of various documents. Personal social security accounts have been in place since 2006. Until that time, information was only on paper and in workbooks. According to the instructions of President Aliyev, individuals who retire in 2019–2020 will receive an insurance record of 25 years. This will be possible without any obstacles and bureaucratic delays,” Minister Babayev said.

By the way, as promised by the minister, the State Fund for Social Protection expects already in 2019 a serious increase in revenues, including from the state budget and due to increased social insurance fees. This will make it possible to increase the amount of pensions above ₼240, whereas in 2018 this amount was ₼226.8. At the same time, the minimum pension next year is projected at ₼133.6 (an increase of 14.9% compared to the end of 2018), and the minimum subsistence level for pensioners for 2019 is ₼149 (an increase of 3.5%).

Automation of the process of calculating pensions is not just a simplification measure covering about 70,000 nationals of the country every year. Recently launched E-Social Portal has information about 4 million citizens of the country in its registry database. According to the minister, thanks to the ‘single window’ facility of the E-Social, each citizen can directly access information of interest. According to the Ministry of Labour, E-Social will also become an important electronic infrastructure tool in the future activities of DOST employment centres.

New employment strategy

Another innovation is an automated job bank, which is planned to improve the labour market of Azerbaijan. "Among other measures that will contribute to the development of Azerbaijan’s labour market is the establishment of the National Observatory on Labour Market. This body will help predict demand and supply in the labour market and, by analysing market needs and existing labour resources, will stimulate the creation of new jobs,” Minister Sahil Babayev said at the Human Capital Forum organised by the World Bank in Baku in December.

Back in October 2018, the World Bank presented its new product, Human Capital Index, where Azerbaijan is listed as the 69^th among 157 countries covered. According to WB expert Cem Mete, if we estimate Azerbaijan’s GDP and revenues, this is a normal indicator. "But if you consider Azerbaijan’s characteristics and potential for oil revenues, Azerbaijan may take a higher place in the future," Mete added. In this regard, the World Bank proposed a number of measures to the government of Azerbaijan to improve human capital. They can be divided into two groups - strengthening social protection and expanding subsidies to education. This area requires financial investments, especially in preschool and higher education. “With regard to social protection, this area also needs to be subsidized by introducing new tools,” Mete said.

In fact, the government of Azerbaijan announces the social orientation of state budget expenditures every year. However, unstable oil prices and the irretrievability of social sector inflows limit full implementation of all the planned programs.

The government expects that in the new year the situation will change radically. According to the adviser to the Minister of Taxes Khagani Abdullayev, the number of tax reforms include various measures to combat the shadow economy. If implemented, these measures will at least make it possible to minimise huge negative impact of the shadow economy on the state budget. According to Mr. Adbullayev, world experience shows that tax policy primarily supports the mechanism for encouraging investment in human capital. Thus, the Tax Code of Azerbaijan includes relevant articles, for example, concerning the exemption from income tax of educational institutions, where teaching is provided for people with disabilities. “In 2019, similar benefits and exemptions will be expanded,” Mr. Abdullayev noted.

Employment Strategy of Azerbaijan for 2019-2030, approved by the presidential decree on October 30, 2018, will also contribute to human capital development. The new employment strategy will improve state policies on employment and the transition from extensive to intensive development. The document reflects the priorities for the years 2019-2030, which also include the implementation of economic development policies focused on employment, support to micro, small and medium-sized businesses, improvement of the regulatory framework and institutional structure in labour market regulation, strengthening and improvement of labour standards.

The strategy also reflects the use of a new model of services that meets modern standards for employment within the DOST centres, which will allow citizens to make use of these services based on uniform standards in an operational and fully transparent manner.

As part of this strategy, self-employment financing is also expanding in Azerbaijan. “Next year 7,000-8,000 small micro-family farms will be involved in this system nationwide, which is a great contribution to the development of small entrepreneurship in the Azerbaijan,” S. Babayev noted. He believes that these measures will boost the development of small businesses and will contribute to solving the problem of employment in rural areas. “So far our self-employment courses have trained 7 ,000 people. Majority of graduates are people with disabilities, citizens covered by social targeted assistance, internally displaced people, large families, families of the war veterans and other low-income groups,” Babayev said. The employment program has already covered 1,200 people who received targeted social assistance.

Obviously, new social reforms cover practically all the urgent social problems of the citizens of Azerbaijan and are designed to significantly ease their access to social services. If these projects prove to be as successful as the ASAN Centres, they will have a significant positive impact on public welfare. This is the main objective of all the state programs and projects every year.