WASHINGTON, 29 July 2024-The World Bank's Board of Executive Directors today approved a $150 million in additional financing to expand the on-going Azerbaijan Employment Support Project (AESP), which aims to help the most vulnerable people-with a special focus on internally displaced persons, women, youth, and the long-termed unemployed-by promoting opportunities for self-employment.
Over the past three years, 15,000 beneficiaries, of whom more than 5,000 were women, have received asset packages to start their businesses. According to a beneficiary assessment, over 70% of AESP participants have stayed in business 24 months after receipt of project-provided assets. Building on this success, the financing approved today will scale up existing employment programs and services and adapt and pilot others to serve even more people and promote the sustainability of businesses under AESP.
"Azerbaijan has been making efforts to improve the labor market outcomes for vulnerable people. However, challenges, such as skill mismatches, high informality, and high unemployment among women, remain," said Steffi Stallmeister, World Bank Country Manager for Azerbaijan. "This project helps address these challenges, which is key to ensuring more inclusive, private sector led economic growth in the country."
The additional financing will continue supporting Azerbaijan's Self-Employment Program (SEP) by expanding its outreach to new sectors such as manufacturing and services to promote diversification of economic activity and resilience against shocks. Furthermore, this financing will provide an opportunity to pilot an improved cash-based grants scheme, which will allow beneficiaries to utilize funds to expand their businesses.
The additional financing for AESP will also improve the capacity of the Azerbaijan Public Employment Agency to expand its range of services and programs for jobseekers. Through this new support the agency will implement additional active labor market measures, such as on-the-job-training, wage subsidies, an apprenticeship program, vocational training development, and certification fee reimbursement for selected occupations. These programs are expected to stimulate the employment of jobseekers, including women and other vulnerable populations, and increase their employment opportunities in manufacturing and services sectors.
"With this new financing, we will test the viability of a set of active labor market measures to support skills development and incentives for jobseekers and employers," said Mirey Ovadiya, leader of the World Bank team that prepared the project. "By pioneering this approach, Azerbaijan has an opportunity to generate more productive and sustainable jobs for the future."
AESP is expected to contribute to advancing Azerbaijan's key development priorities, such as raising human capital potential, as well as increasing the effectiveness of employment services, skills enhancement, and inclusiveness. In addition, the project is also aligned with the objective of promoting more productive and inclusive jobs, highlighted in the World Bank Group's Country Partnership Framework for Azerbaijan (2025-29) which is being discussed with the Government of Azerbaijan.
