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Azerbaijan: Human Capital Forum Helps the Country Orient Itself for the Future

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Panelists and high-level participants discuss human capital investments at the forum in Baku, Azerbaijan. Photo Credit: Zaur Rzayev / World Bank

Recognizing the key role of human capital in growth and competitiveness, the Government of Azerbaijan and World Bank Group organized a three-day, high-level Human Capital Forum in Baku from December 19 to 21, 2018. Each day, approximately 150 participants including government ministers, top policy experts, academics, development and business community leaders, and media representatives gathered to discuss how best to support the Government of Azerbaijan in accelerating the development of its people.

Why now?

Over the past two decades, oil wealth has helped Azerbaijan achieve high growth rates, significant poverty reduction, and a middle-income status. However, Azerbaijan is facing new and emerging challenges such as how to achieve broad-based, private sector-led growth and make key public services and economic opportunities accessible to all citizens across the country.

Further, on the recently released Human Capital Index, Azerbaijan ranks 69th out of 157 countries. A child born in Azerbaijan today will be 60 percent as productive when she grows up as she could be if she enjoyed complete education and full health. Already, the country’s development strategy documents—the Azerbaijan 2020: Vision for the Future and the Strategic Roadmaps for Economic Reforms —envision human capital development and its effective engagement in the development of Azerbaijan.

The Forum provided a way to explore a “whole-of-government” approach to nurturing human capital by engaging ministers and officials from education, health, tax, labor and other fields.

Forum Highlights

On Day 1, with the focus on jobs, Sahil Babayev, Minister of Labor and Social Protection of Population, emphasized the country’s commitment to the formation of human capital and measures to stimulate the labor market. He particularly appreciated that human capital development is looked at through the prism of economic growth and social cohesion.

The World Bank presented the World Development Report 2019 The Changing Nature of Work, a study on how the nature of work is changing as a result of advances in technology today and how governments can best respond to these changes by investing in human capital and offering social protections to all people. Sahil Babayev was joined by Khagani Abdullayev, Adviser to the Minister of Taxes, Kestutis Jankauskas, Head of the EU delegation, and Maleyka Abbaszadeh, Chairperson of the State Examination Center of Azerbaijan, as panelists.

While discussing how investing in human capital must be a priority for governments for workers to build in-demand skills, Mr. Abdullayev said, “Experience shows that properly implemented tax policies contribute to the implementation of a mechanism for encouraging investment in human capital; in this context, Azerbaijan is paying attention to areas which require unique skills.

This year, it was proposed to introduce tax incentives for a period of ten years for investments in such areas as education, science, sports and culture. At present, educational institutions where people with disabilities study are exempted from income tax in 2019.”

Day 2 focused on education. Setting the stage for discussion, Naveed Naqvi, World Bank Country Manager for Azerbaijan, stressed that the people of Azerbaijan were the country’s only true resource and for them to fully utilize their potential, increased investment in education and skills was needed.

Jeyhun Bayramov, Minister of Education of Azerbaijan, confirmed this in his opening remarks, stating,  “Our world requires well-educated, skills-equipped graduates from our schools who will shape our today and tomorrow. And achieving this is a shared responsibility of education, business and government leaders.”The topic was further elaborated in the WB presentation on the 2018 World Development Report: Learning to Recognize Education’s Promise.

In the discussion following the presentations, Jeyhun Bayramov was joined by William Gill, U.S. Chargé d’Affaires; Edward Carwardine, UNICEF Country Coordinator; Fariz Ismailzade, Vice Rector of ADA, Maleyka Abbaszadeh (mentioned above), and Cem Mete, Social Protection and Jobs Global Practice Manager, Europe & Central Asia, World Bank, as panelists. Participants debated measures to ensure that schooling and learning went hand in hand, how to act on evidence to maximize learning outcomes, and how to align various actors in the system to make it work for learning. Mrs. Abbaszadeh said, “It is necessary to change the nature of education to make it career-oriented.”

A presentation on the changing nature of wealth and a discussion centered around The Human Capital Index and Human Capital Project set the agenda for Day 3. Panelists for the latter included Vusal Gasimli, Head of the Center for Analysis and Communication of Economic Reforms, Hijran Huseynova, Chairperson of the State Committee for Family, Women and Children Affairs, Zakiya Mustafayeva, Head of Apparatus, Ministry of Health, Zaur Aliyev, State Agency for Mandatory Health Insurance, Dr. Hande Harmanci, WHO Representative, Garay Garaybayli, Rector of Azerbaijan Medical University, and Ghulam M. Isaczai, UN Resident Coordinator.

Issues for discussion included: Why should countries invest in human capital? Can early health care and education prepare children to succeed and prosper as adults in a rapidly changing world? What are the barriers to nurturing human capital and how can countries overcome them?

Additional forum sessions included the World Bank’s analytical work on employment, higher education, health financing, and early childhood development in Azerbaijan.

Finally, at the end of the three-day forum, the main presentations, key messages and recommendations from the event were presented at the National Parliament of Azerbaijan (Milli Mejlis). Mr. Ziyad Samadzade, Chairman of the Economic Policy Committee, led an engaging discussion on the state of human development in Azerbaijan and ways to accelerate the transformation of Azerbaijan’s oil wealth into human capital.

Communications

Extensive communication, both before and during the event, helped achieve broader public conversation around the themes of the Forum. A dedicated event webpage detailed the agenda and included links to key World Bank publications and the Human Capital Project page. One-to-one meetings with key government officials ensured their participation and contribution. The event had impressive media coverage. In the run-up to the event, World Bank officials gave numerous media interviews to promote interest in it. During the Forum, presenters and experts talked extensively to the media.

What next?

One of the main conclusions of the 3-day event was that Azerbaijan needs to invest more and better to harness the potential of its human capital, and that its current human capital index is not commensurate with its income level. “With the confluence of rapid technical change and globalization and the need to engage in the global knowledge economy, Azerbaijan’s investments in human capital will be key to its ability to collaborate and compete with other nations,” said Lire Ersado, Program Leader, World Bank.

By championing human capital formation through a whole-of-government approach, Azerbaijan can prepare its citizens for the challenges and opportunities that lie ahead. With this in mind, the WBG is making a strategic shift to focus its support more on human development in Azerbaijan.

World Bank

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Eastern Europe

Dawn of great power competition in South Caucasus

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The pace of geopolitical change in the South Caucasus is staggering, with the recent Karabakh war only underlining several major geopolitical trends in the region.

The first noticeable trend being the undercutting of democratic ideals and achievements of the region’s states. Take Armenia, its young democracy had high hopes following the 2018 revolution, but now it will be more even more dependent on Russia.

It is not a matter of whether a democratic model is better or not, the matter lies in the incompatibility of an aspiring democracy with a powerful nondemocracy such as Russia.

The Armenian leadership will now have to make extensive concessions to Moscow to shore up its military, backtracking on its democratic values. Building a fair political system cannot go hand in hand with the Russian political model.

The war also put an end to any hopes of Armenia implementing a multivector foreign policy, an already highly scrutinized issue. Mistakes were made continuously along the way, the biggest being an overreliance on Russia.

In the buildup to 2020, Armenia’s multiaxial foreign policy efforts gradually deteriorated, with the 2016 fighting showing the limits. Armenian politicians attempted to develop ties with other regional powers in the aftermath, but Russian influence had already begun to incrementally increase.

Tipping the scales in a no longer balanced alliance culminated in the 2020 war with Azerbaijan thanks to Yerevan’s maneuvering. More crucially, the war has obliterated Yerevan’s multiaxial policy efforts for years to come.

Now, Armenia’s dependence on Russia would be even more pronounced with no viable geopolitical alternatives.

With no more foreign policy diversification, the three South Caucasus states are divided by larger regional powers, further fracturing the region.

The return of Turkey and the growth of the Russian military could resurrect the great power competition, in which a nation’s military power, infrastructure projects and economic might are directly translated into their geopolitical influence over the region, ultimately deterring long-term conflict resolution.

The Western stance

The Karabakh war highlighted a regression in Western peacekeeping standards. The Western approach to conflict resolution based on equality rather than geopolitical interests has been trumped by the Russian alternative.

Moscow is not looking to resolve the conflict (it never does in territorial conflicts); instead, it is seeking to prolong it under its close watch in a bid to increase its influence.

Looking at the situation from the Russian perspective, it is clear the country will continue to influence Armenia and Azerbaijan, only now to a far greater extent than before.

The West’s inability to accommodate fluid geopolitical realities in the South Caucasus also raises questions about its commitment to resolving the issues at hand. The second Karabakh war was in a way a by-product of the West’s declining engagement in the region over the past several years.

The West can no longer treat the South Caucasus as a monolithic entity, and a diversified foreign policy should be applied in line with realities on the ground.

Policies should reflect each individual state, and the West should, perhaps, be more geopolitical in its approach.

Turkey’s recent suggestion to create a six-nation pact bringing together the South Caucasus states, Russia, Turkey and Iran, shows the regression of Western influence in the region. But the geopolitical vacuum is never empty for long, and Turkey and Russia approach.

Georgia’s position

Georgia could act as the last bastion of dominant Western influence, but even there, the West should be cautious. The country is on the cusp of Europe, making it susceptible to foreign influence.

Bordered by Russia and Turkey, two powers often discerning of Europe, Georgia also feels the pressure to adapt to the changing circumstances on the ground.

The lack of Western resolve in the region and the Black Sea could propel Tbilisi if not toward a total reconsideration of its foreign policy, toward diversifying its foreign ties – one could call a “rebalancing.”

The war also solidified that the Caspian basin and South Caucasus are inextricably linked to the greater Middle East.

Russia and Turkey are basing their strategies in the region on developments in the Middle East and the Black Sea region. Not since the end of the Soviet Union has the South Caucasus been such a critical point for the West, especially the incoming Biden administration.

But time is critical and any further delay in active U.S. policy could spell disaster for Georgia, which serves as a door to the Caspian and on to Central Asia.

The West has been in regression in the region for quite some time now; the Karabakh war only brought it to the light, and it must be proactive if things are to change.

Much will depend on the U.S. and its new administration, but the West will have to come to an understanding with Turkey, even if it be limited, to salvage its deteriorating position in the region.

After all, the South Caucasus has always been the only theater where Turkish and Western interests have always coincided. Considering its limited presence in the region, the West could consider backing Turkey.

Not only would it serve as a reconciliatory gesture pleasing Ankara, but it would also limit Russia’s movement in the region. With the ink about to dry on who will influence the region, the West must immediately adapt its approach if it wishes to have any input in the rapidly changing geopolitics of the South Caucasus.

Author’s note: first published in dailysabah

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Eastern Europe

An Impending Revolution

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Large crowds have demonstrated their anger at the results of the presidential election in Belarus. Photo: Kseniya Halubovich

Even on the end note, the year contains surprises enough to deem it as a year of instability and chaos given every nook and cranny around the globe is riddled with a new crisis every day. Latest down in the tally is the country of Belarus that has hardly streamlined over at least half a decade but now is hosting up as a venue to rippling protests in almost all the districts of its capital, Minsk. The outrage has resulted from the massive rigging imputed on the communist party in ruling for almost three decades since the split of Soviet Union in 1994. With Europe and Russia divided on the front as the protests and violence continue to rage: a revolution is emerging as a possibility.

The historical map of Belarus is nearly as complex as the geographical landscape which might only stand next to Afghanistan in terms of the intricacies faced by a landlocked country as such. Belarus is located in the Eastern European region bordered by Russia to the north-eastern perimeter. Poland borderlines the country to the West while Ukraine shares a border in the South. The NATO members, Lithuania and Latvia, outskirt the borders of Belarus in the Northwest, making the region as a prime buffer between the Russian regime and the western world. As Belarus stands as a junction between the European Union (EU) and Russia, the proximal nature brings about interests of either parties in the internal affairs of Minsk. However, the nature of the bond shared between the trio is by no means a triangle unlike other former soviet nations since Belarus has casted its absolute loyalty to Russia since the split of Soviet Union and ultimate accession to power of president, Alexander Lukashenko, the leader of the Communist Party of Belarus. Along with the alliance, however, came the unwanted dependency since over the 26-year rule of Lukashenko, he crippled the economy and the political writ of Belarus, using every last ounce of authority to subdue the opposition and the democratic mechanism of the country, earning him the nefarious title ‘Europe’s last dictator’.

The outburst of protests today stems from this very problem that is more deep-rooted than what comes across as apparent. The excessive and draconian use of power and autonomy has invalidated the independence of Belarusians and turned them haplessly at the mercy of Russian aid and support while blocking out any western support in the name of guarding national sovereignty. The ongoing surge of dissent was triggered earlier in August when the elections turned about to be absurdly rigged in favour of Alexander Lukashenko, granting him an indelible majority of 80% of the total vote count along with a lifetime of rule over the country despite his blatant unpopularity across the country. The accusations were further solidified when one of the popular opposing candidates, Svetlana Tikhanovskaya, casted a complaint with the authorities regarding the falsification of election results. Instead of being appeased, she was detained for 7 straight hours and was even forced to exile to the neighbouring country of Lithuania. This resulted in major tide of riots and protests erupting all across Minsk, preceding over 3000 arrests over the election night.

On the official front, however, an aggressive stance was upheld along with a constant refusal of Lukashenko from stepping down from the long-held office or even considering a review of the polls counted despite exorbitant reports of unfair results. Heavy use of rubber bullets and tear gas was an eccentric protocol adopted by the local police force which instead of placating the rioters, further ignited the protests in more districts of the capital city. The anti-government relies also entitled ‘March of Neighbours’ transitioned into a high scale protest with many of the state employees resigning from their positions to stand upright against the long overdue corrupt regime. With the protests raging over months and the Lukashenko government getting more and more aggressive with their policies, the fear that once sparkled in the eyes of the natives is dwindling exceedingly and is turning into a cry for an outright revolution, which would be a ground-breaking one ever since the revolution of Iran back in 1979.

European counties have taken their conventional passive position in the crisis sinceEU is well aware of the Russian influence in Belarus and does not want to interfere with a probability of a direct conflict with Russia. However, they did call out their protest over the rigged elections, slapping sanctions over Belarus yet have not accused Lukashenko directly but instead have proposed a thorough international dialogue. Russia, on the other hand, faces a complex position since the dependence of Belarus bought Moscow a base against the West along with other regional rogues like Ukraine. However, high scale protests and rising chances of a full-blown revolution is hardly the choice Russian intends to opt. As the situation continues to unfold, economic reforms, as promised by Lukashenko, appears to be the only option that both EU and Russia could encourage as a bipartisan plan. Despite that, with six months of protests erupting as an outrage over a tyranny of 26 years, the reform-offering might be a bit late an offer since its no more about the country anymore, it’s about a struggle between a liberal or a communist Belarus.

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Eastern Europe

The 44-Day War: Democracy Has Been Defeated by Autocracy in Nagorno-Karabakh

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The people of Artsakh are seen as pro-Russian. Is this Pro-Moscow assessment of people of Artsakh accurate, and why Russian peacekeepers are welcomed in Nagorno-Karabakh?

***

The Republic of Artsakh and its people developed the nation’s democracy for approximately three decades. Back in 1991, Artsakh held a referendum on its independence, as well as democratic elections under a barrage of Azerbaijani rockets. The people of Artsakh accomplished this step by themselves, being convinced that without freedom of the individual, there is no freedom for the country. The Artsakh National Liberation Movement was nothing but a struggle for freedom and the right to decide one’s own destiny.

The development of democracy was not easy for a war-torn country with ade-facto status, limited resources, lack of institutions, combined with the threat of resumption of hostilities and the temptation of using elements of authoritarianism in governance as well as in the public mood. 

Nevertheless, during the last three decades, the people of Artsakh have managed to develop working democratic institutions, ensure political pluralism, and form effective human rights institutions. The vivid examples thereof are the 2020presidential elections held on a competitive basis, a 5-party Parliament, and the constitutional mechanisms for the separation of powers.

It is noteworthy that the full spectrum of democratization in Artsakh has been carried out by the country alone, without the direct support of international governmental and non-governmental organizations, and despite the numerous appeals by the civil society of Artsakh made to them.

However, Artsakh’s democracy has been highly regarded not only by parliamentarians, politicians and experts who have visited Artsakh, but also by the international organizations, such as Freedom House in its Freedom in the World annual reports. In these reports Artsakh is on the list of partly free countries, making progress in ensuring political and civil liberties each year, while Azerbaijan holds on to a not free status all the while making regressive steps in every aspect.

The people of Artsakh believed that the development of democracy would inevitably strengthen the position on unimaginability of any vertical relationship with dictatorial Azerbaijan. The people of Artsakh believed that they were keeping the eastern gate of the European civilization and its set of values. The people of Artsakh believed that those in West involved in the conflict settlement process, particularly France and the United States would view the Artsakh struggle with an understanding that it was created by their examples and ideals of freedom.

And what did the people of Artsakh receive as a result of believing in the West? They faced a new war and a new bloodshed unleashed by the same Azerbaijan. They also faced a harsh reality in the form of gross violations of human rights, war crimes and destruction of their cultural heritage. The principle of equality and self-determination of peoples in general, and the notions of freedom and human rights in particular completely collapsed before the eyes of the people of Artsakh.

One doesn’t have to be a military expert to understand that Artsakh, a small country with limited resources and capabilities, could not on its own resist Turkey-backed Azerbaijan for long, especially given the direct involvement of Turkish command staff and thousands of mercenaries from the Middle East terrorist organizations in the conflict, and the use of advanced military technology likethe banned weapons and unmanned aerial vehicles (UAVs).

What did the people of Artsakh need to prevent this war? The answer would have been the de jure recognition of Artsakh that at least would have dampened the possibility of a new war, put an end to the century-old conflict, and establish long lasting peace and security in the region.

Instead of recognizing their unalienable right to self-determination, a new war was imposed on the people of Artsakh. As a result of this war, the people of Artsakh were left with a devastated country, thousands of dead and wounded compatriots, a new generation of refugees and IDPs, dependence on the peacekeeping mission for physical security, a “neither peace nor war” situation, as well as an uncertain future.

Russia wanted to come to Karabakh and so it did. Russia is in Artsakh not because the people of Artsakh were dreaming of weakened sovereignty while they continued to think of what West would do, but Russia came to Artsakh because Russia, unlike the West, acts rather than speaks. When on the one hand there are European and American concerns expressed in empty statements and on the other hand there are Russian peacekeepers and tanks, there is no room left for thinking long.

Let’s look at the values in which European Union, United States, Canada, and the rest of the so called “civilized world” believe in: the ideas of human rights and freedoms which they been advocating for years across the world. Now let’s try to see what is left from them all. Maybe once can find an inspiration for writing new books and sharing ideas about the future of humanity vis-à-vis the civilized world. Perhaps, in the European Union, in the United States, in Canada, and in the rest of the so called “civilized” world, their population may enjoy the ideals of human rights, but the people living in small and unimportant countries are often deprived of such rights. Perhaps the Western intellectuals and authors will write books on how the West left the faith of the people of Artsakh to the hands of the terrorists while empowering the Turkish-Azerbaijani dictators with their indifference and inaction. Indeed, for the West, the lives of the people of Artsakh are not valuable just because they are from a ‘gray’ zone, because they live in a country that doesn’t officially ‘exist’. These discriminatory phrases are definitions time and again used by the Western officials. It is what it is. The West, however, should not forget to celebrate Zero Discrimination Day and quote articles from the Universal Declaration of Human Rights.

Later, when Turkish expansionism and terrorism will knock on the Western doors, the West will remember those unimportant people from an unrecognized country that absorbed the first blow. At that juncture, the West will also remember how it admired the people of Artsakh’s endurance and collective resistance, but at the same time left them alone in their fight against terrorism and modern military technology. Perhaps, for the West it is just like watching a fun action movie with popcorn and cola.

Having 193 or 194 member-countries in the United Nations (UN)as a result of recognition of Artsakh would not change the existing international legal order, however, it could serve a textbook example for rising democracies and a lesson for the dictatorships and international terrorism. By not recognizing the right of the people of Artsakh to self-determination, the West is burying the concepts of human rights, freedoms, and democracy, thereby paving a way for the next military-political adventures of dictators. The West should decide. The longer the West spends on thinking without any concrete action, the further the region will move away from it.

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