HUMAN DEVELOPMENT AND MODERN TECHNOLOGIES Chapter 1 1.2. Modern State of Human Development Azerbaijan's HDI rating has been subject to significant fluctuations during the years of global measurements of human development indices. According to the Global Human Development Report, based on the indicators for 1992 (as reported in UNDP 1995), Azerbaijan ranked 99 among 174 countries in terms of the Human Development Index. According to the UNDP 1998 Global Report, Azerbaijan's ranking then fell to 110. The UNDP Global Reports for the following years were indicative of evolving and strengthening trends of growth of human development indices. In the latest available UNDP Global Human Development Reports (UNDP 2002, 2003), Azerbaijan has already begun to take a higher position 88 and 89 in the list of more than 170 countries. This improvement was primarily due to the increase of GDP per capita brought about by economic growth that began in 1996. This has also resulted in increased indicators of human development such as life expectancy at birth and education. According to the UNDP-adopted classification, Azerbaijan is in a group of countries with an average HDI of 0.500-0.799, in which countries display the most dynamic changes of positions in terms of rating and competitiveness. However, in terms of per capita income, Azerbaijan till 2003 was categorized with countries that have a low level of income (US $755 or less per year). Azerbaijan's rank according to these classifications is likely to increase in the years to come as a consequence of the expected economic growth. According to the assessment in 2003, the economic growth was 12.1 percent compared to 10.6 percent in 2002. As a result of the established tendencies, higher economic growth is expected between 2003-2005 at the rate of about 11 percent per year. The growth of real GDP per capita lags behind the growth of the gross indicator due to the moderate growth of population. Growth in real GDP per capita lags behind the real GDP by about 1 percent. In 1999, GDP per capita was $574. In 2000, it was $654. In 2001, it rose to $715. According to national statistical data for 2003, GDP per capita is reported at $879.7, and according to the government's forecast it should be no less than 920 for 2004. GDP per capita still remains the major component promoting sustainable growth of the Human Development Index. Poverty in Azerbaijan remains the primary obstacle for sustainable human development. Its elimination or reduction will influence all other human development indicators and the development of further reforms. Human Development and Ecologically Sustainable Development were established as components of the national strategy by Presidential Decrees in 2001. The Commission on Human Development is coordinated by the Ministry of Economic Development. The National Human Development Strategy will be based on the achievements already made to introduce well planned approaches of human development toward poverty reduction and economic development. Though the Human Poverty Index (HPI-2, according to UNDP classification) is decreasing, it still remains high. According to calculations based on recent available data on the number of the poor in the country and employment, as well as on data on the percentage of the population who die under 60 years of age and appraisal of functional literacy of the population, the HPI-2 in Azerbaijan decreased by 32 percent (2002). According to previous data, based on the appraisal of poverty in the country by the World Bank, HPI-2 was 43.4 percent. This decrease of poverty index is related to the fact that the share of the population with incomes lower than the poverty level has decreased from 68.1 percent (1996) to 49.0 percent (SPPRED), according to recent research carried out by national agencies together with the World Bank. A poverty reduction step reflects the result of policy carried out by the government and international organizations, including UNDP for the fulfillment of MDGs (Table 1.1). According to measurements for this Azerbaijan Human Development Report, the country's HDI makes up 0.767, representing an increase of 0.9 units as compared to the figure measured on the basis of data on the country's socioeconomic progress for 2002 (0.758). The results of the measurements on the basis of the 2003 data are indicative of the progressive trend of growth for the HDI and its components (life expectancy at birth and education) for the years to come. If we compare Azerbaijan's HDI components with relevant world indices, Azerbaijan significantly exceeds the world average by 15.0 percent for life expectancy and 19.6 percent for the education index. At the same time, Azerbaijan's GDP index is lower than the world average by 16.7 percent. Regarding Purchasing Power Parity (PPP), GDP per capita in Azerbaijan in 2001 ($2,936 UNDP, HDR 2003) was two times less than the world average, whereas in 2000, it was 9.4 times lower than that of countries with high income. These figures are indicative of the stable growth of per capita income and, correspondingly, the human development indices. However, the current state of the HDI does not realistically reflect the country's potential. There exists significant unused resources for economic growth and human development due to the country's intellectual and natural potential. In terms of adult literacy, Azerbaijan compares to most developed countries in the world and has practically reached the maximal value of this index. An estimated 99 percent of the country's population 15 years of age and older is literate. Less impressive are the issues related to educational enrollment at educational institutions of the first, second and third levels. In the context of the poverty reduction strategies, it is critical to achieve overall technological progress, increase the level of educational enrollment, and the development of professional skills and intellectual potential in the country. According to UNDP HDR-2002, the gross enrollment of education in Azerbaijan was 71 percent, based on data for 2000. This index for all three levels of education had decreased by the mid-1990s, due to the Nagorno-Karabakh conflict which led to the loss of territories and existence of refugees and IDPs. These problems led to the reduction in the number of students in educational institutions at all three levels. In 1992, it was 68 percent and by the mid-1990s, it had fallen to 62 percent. Under the impact of the economic growth of 1996 and the following years, this most important indicator of the human development process began to grow and it had reached 71 percent by 2000 (UNDP, 1995-2002). It is assumed that the growth of this index is caused primarily by the component of the third level of education - higher educational institutions. The number of university applicants decreased from 19,500 in 1990/91 to 13,400 applicants in 1994/95. Then it increased rapidly: a total of 26,400 students entered state and private higher educational institutions in 2001/2002 (Table 1.3). However, this positive factor, from the point of accumulation of intellectual potential for scientific-technological progress should be viewed critically, as the number of students studying natural and technical sciences is actually decreasing. The changes occurring in higher education indicate the growing potential of private universities to compete with state institutions. Between 1996 and 2001, the number of students in State universities and institutes rose by 5.4 percent; while during that same period, enrollment in private universities increased 43 percent. Further human development, which uses knowledge-based approaches will depend, to a significant extent, on the amount of attention which is paid to natural and technical sciences as many students are enrolled in social and humanitarian sciences. The greatest increase was seen in the field of economics, which doubled between the years of 1990 and 2000. The number of specialists involved in industry and agriculture declined by 25 percent over this same period a trend that can partially be explained by the low level of income and the poor social position of those engaged in these fields. To overcome these tendencies, special policies must be adopted. A higher number of students trained in those fields would strengthen technological progress, primarily, in natural sciences and engineering. Table 1.1. Human Poverty Index HPI-2 Percentage of people not expected to survive to age 60 - 20.4% Percentage of people who are functionally illiterate - 15.1% Percentage of people living below poverty income - 49.0% Rate of long-term unemployment - 1.3% Table 1.2. Human Development Index in Azerbaijan and its Component Indices Table 1.3. Institutions of State Higher Education (at the beginning of academic year) Previous page  Next page UP