Azerbaijan - Poverty and wealth

The level of poverty in Azerbaijan was officially estimated to be 34 percent of the population in 1989. However, with subsidies for employment, food, housing, and social services, poverty rarely meant severe deprivation. After independence, on the other hand, poverty increased dramatically. Average food prices multiplied as much as 28,750 times from 1988 to 1998. According to the Azerbaijan Survey of Living Conditions that was conducted in 1995, over 61 percent of the population was poor. Poverty was substantially higher among internally displaced people (due to Armenian occupation in the Nagorno-Karabakh region).

The gap between the rich and the poor widened after independence, especially when the oil-related sector began surging while the other industries (manufacturing, mining) deteriorated. The country consists of an upper class (2-4 percent) living in extraordinary luxury, while the majority of the population (80-85 percent) suffers from very low wages and poor living conditions.

Although poverty is high, human development indicators such as school enrollment, literacy levels, and infant mortality rates are positive. However, public spending on education declined by three-quarters from 1992 to 1996. The health system also suffers from mismanagement, deteriorating quality, excess capacities, and access problems. In 1998, the number of hospital beds was 9.6 per 1000 people. Bribes from patients were

Household Consumption in PPP Terms
Country All food Clothing and footwear Fuel and power a Health care b Education b Transport & Communications Other
Azerbaijan 51 5 16 9 2 4 14
United States 13 9 9 4 6 8 51
Russia 28 11 16 7 15 8 16
Armenia 52 3 8 3 18 9 23
Data represent percentage of consumption in PPP terms.
a Excludes energy used for transport.
b Includes government and private expenditures.
SOURCE: World Bank. World Development Indicators 2000.

a major form of financing adequate health care. During the 1990s, public health spending decreased. In 1999, the government's health spending was only about 20 percent of its 1990 level.

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