Azerbaijan saw a substantial reductionin poverty during the 2000s, owing to significant economicgrowth and policies and programs that improved thedistribution of wealth. Seizing the opportunity afforded bythe oil boom, Azerbaijan initiated large public sectorinvestment programs and supportive policies to increasewages and social protection transfers to the population, andinstitutional reforms aimed at modernizing the economy.These efforts translated into double-digit growth and animpressive reduction in poverty. The report underscores thatthe government's targeted social assistance program hasbeen successful in channeling public transfers to the mostneedy. On the other hand, high dependence on oil revenues,compounded by the current global economic crisis, presentschallenges to maintaining growth and could jeopardize thegains made in poverty reduction. Moreover, while Azerbaijanhas made significant progress in building capacity toredistribute the benefits of growth, significant challengesremain in developing the human capital of the population toparticipate actively in future growth and to close theproductivity gap with its comparators in the post crisis world.
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