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United nations development assistance framework azerbaijan 2005-2009 United Nations Country Team Table of Contents Executive Summary

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  1. Introduction

The United Nations agencies in Azerbaijan are participating in the UN Reform process approved by the United Nations General Assembly in 1997. As part of this process, the United Nations Country Team (UNCT) completed a Common Country Assessment (CCA) in August 2003. The CCA provides an overall analysis of the national development situation. Using the findings of the CCA and an ongoing consultative process with the Government and other development partners and stakeholders, the UNCT has undertaken the next step in UN Reform: the preparation of a United Nations Development Assistance Framework (UNDAF). The purpose of the UNDAF is to guide UN programming in Azerbaijan through a collective, coherent, and integrated response to national priorities and needs. In 2002 the UNCT approved a CCA/UNDAF workplan for completion of the process by the end of March 2004. (See Annex 4.)

The CCA process. Azerbaijan’s CCA process began with the UNCT’s appointment of a CCA Steering Committee chaired by the UNICEF Head of Office. The Steering Committee adopted the State Programme for Poverty Reduction and Economic Development (SPPRED) for 2003-2005 as the CCA’s point of departure. The CCA built upon the SPPRED by analyzing progress toward the SPPRED goals, the MDGs, and Azerbaijan’s other development commitments related to international conventions and summits. In consultation with Government partners and an external UN Readers’ Group, the Steering Committee identified three key areas of development concern in Azerbaijan: (1) human displacement, (2) governance, and (3) social protection and basic services. The CCA addresses these three themes, treating poverty, gender, and civil society as cross-cutting issues.
The UNDAF process. Upon finalization of the CCA, the UNCT appointed an UNDAF Steering Committee of representatives from the UN agencies in Azerbaijan and the World Bank and IMF. The UNDAF Steering Committee first conducted a causal analysis of Azerbaijan’s development problems in the areas of governance (public administration, economy, migration, management of information systems, and environmental protection), poverty (monitoring and income generation/employment), and social protection/basic services (HIV/AIDS, social vulnerability, maternal and child health, nutrition, quality of education, and child protection).
The UNDAF Steering Committee then compiled a preliminary set of UNDAF and Country Programme Outcomes. Following the Results Based Management approach adopted for the UN Reform process, Outcomes are defined as institutional and behavioral changes anticipated in the five-year UNDAF period. UNDAF Outcomes require the contribution of two or more UN agencies and other partners, reflect collective priorities, and focus on national MDG/SPPRED targets. Country Programme Outcomes are mandate-driven and do not require contributions from more than one UN agency.
The next step was the UNDAF Prioritization Retreat on 29-31 October 2003, at which the UNCT convened the UN agencies in Azerbaijan and stakeholders from the Government, donors, international organizations, civil society, and the private sector. (See Annex 3 for a list of participants.) Retreat participants identified ways that the preliminary UNDAF Outcomes could be consolidated to clarify and sharpen the UN’s focus in Azerbaijan, using the following criteria: (1) the UN system and partners can achieve the Outcome; (2) the Outcome will improve the lives of the vulnerable; and (3) the problems addressed by the Outcome are worsening. UN participants formulated recommendations for UNDAF implementation and monitoring and evaluation, which the UNCT immediately adopted. These decisions are elaborated in Sections 4 and 5 below.

Table 1. National Priorities and UNDAF Outcomes


The system of governance ensures an enabling environment for development, poverty reduction, and respect for

rights and freedoms


Basic needs for health and education

are met for all people


The effective and transparent management of oil resources leads to increased decent employment in the non-oil sectors (black gold is converted into human gold)


The state improves its

delivery of services and its

protection of rights—

with the involvement of civil society and in compliance with its international commitments


Health and nutrition improve, particularly among women, children, and vulnerable groups


The quality of education is improved


Gender equality and empowerment of women, civil society development, and respect for human rights

Following the UNDAF Retreat, the Office of the UN Resident Coordinator prepared a draft UNDAF document and circulated it within the UNDAF Steering Committee for comment. The Steering Committee agreed on revisions, and the UNCT approved the draft for submittal to an external UN Readers’ Group in November 2003. In January the Office of the UN Resident Coordinator revised the draft again, taking into account the Readers’ Group comments and the draft Country Programmes of UNDP, UNFPA, and UNICEF. Following Steering Committee review, the UNCT agreed on the final version of the UNDAF for translation and submittal to the Government. The UNCT convened a Joint Strategy Meeting with the Government and other partners on 19 March 2004 to review and validate the UNDAF and its linkage to the Country Programmes.

The final UNDAF Outcomes and cross-cutting objectives approved by the Government of Azerbaijan and the UNCT fall under two broad national priorities, as shown in Table 1 above.
Role of UN agencies and partners. Agencies had already reached agreements on some areas for cooperation, and in some cases new possibilities for synergies were brought to light during the UNDAF process. Country Programme Outcomes shared by two or more agencies include the following:

  • ICT/MIS enhances efficiency, transparency, and accountability in the public sector (UNDP, UNFPA, and UNICEF)

  • Harmonized MDG, SPPRED, and poverty/vulnerability monitoring systems are established and operational in compliance with international standards (all UN agencies present in Azerbaijan)

  • Social protection and pension systems are reformed (ILO, UNDP, and UNICEF)

  • State institutions build capacity for delivery of health care services meeting the needs of women, men, adolescents, and children, including needs for reproductive health care and knowledge (UNICEF, UNHCR, and UNFPA)

  • Policies, institutional capacity, and awareness of HIV/AIDS and STI prevention are strengthened (UNICEF, UNFPA, UNDP, and WHO)

  • Appropriate health, nutrition, and child rearing practices for the pre-natal period through eight years of age are adopted (UNICEF and WFP)

Active involvement of development partners outside of the United Nations during the UNDAF Retreat—including Government, donors, international organizations, civil society, and private enterprises (listed in Annex 3)—underscored the potential for increasing collaboration and enabled broad consensus on the roles of the United Nations in Azerbaijan. UN agencies will seek to involve civil society and the private sector to the extent possible at all programming stages. In terms of resource mobilization, partnerships with the Government and the private sector are of greatest importance for the time horizon of the UNDAF.

2. Results
The UN system in Azerbaijan has selected the two National Priorities and four UNDAF Outcomes presented in Table 1 for the focus of its contributions to development during 2005-2009. Table 2, the UNDAF Results Matrix, provides details on the Country Programme Outcomes that will contribute to each UNDAF Outcome, the Country Programme Outputs (products, services, skills, or abilities), the partners with whom the UN agencies will cooperate, resource mobilization targets, and coordination mechanisms and programme modalities. This section describes critical choices made during the preparation of the UNDAF and their rationale.
Cross-cutting objectives. Gender equality and the empowerment of women, civil society development, and respect for human rights are objectives that the UN agencies will pursue in all their activities. These cross-cutting objectives form an integral part of each of the National Priorities and UNDAF Outcomes.
National Priority 1: The system of governance ensures an enabling environment for development, poverty reduction, and respect for rights and freedoms. This national priority relates to objectives set forth in Azerbaijan’s SPPRED, the National ICT Strategy, the State Programme on Socio-Economic Development of the Regions, the Millennium Declaration, four MDGs (eradicate extreme poverty and hunger, promote gender equality and empower women, ensure environmental sustainability, and develop a global partnership for development), the Convention on the Rights of the Child, and other international instruments of the UN system.
Azerbaijan anticipates a changing development situation during the next few years as state oil revenues expand once the Baku-Tbilisi-Ceyhan Pipeline becomes operational. Rapid economic growth will present both opportunities and challenges. Only if used wisely will the oil resources stimulate expansion of employment and productivity in the non-oil sectors. The Government has established a State Oil Fund (SOFAR) to protect Azerbaijan from the difficulties typically faced by economies that depend on the production and export of a single natural resource and is developing a strategy for long-term oil revenue management. With IMF and World Bank assistance, the Government aims to shelter the economy from the volatility of energy prices, to encourage fiscal discipline, and to prevent movements in the real exchange rate that would reduce the competitiveness of non-oil economic activities.
The UN agencies, in collaboration with regional and international financial institutions, are well-placed to help the Government devise and promote its framework for turning state oil revenues into a vehicle for employment creation, as set forth in UNDAF Outcome 1. While employment creation is the primary objective within this Outcome, the management of oil revenues will play such a pivotal role in Azerbaijan’s prospects for employment and overall development that the Government, the UNCT, and stakeholders agreed that it should appear at the UNDAF Outcome level. This Outcome incorporates the need for public and private investment in a diversified and competitive economy and for marketable skills development. The forthcoming National Employment Strategy is expected to address many of these issues.
Creating an environment conducive to development, poverty reduction, and respect for rights and freedoms will require continuing capacity building in the public sector with the involvement of civil society, as set forth in UNDAF Outcome 2. Particular areas of collaboration between the UN agencies and the Government will include social protection and pension systems; MDG/SPPRED advocacy and monitoring; ICT/MIS for development; migration management; protection of refugees, IDPs, migrants, and asylum seekers; environmental and natural resource management; drug control; policies on population, gender, and reproductive rights; bringing national data into compliance with international standards; gender-disaggregation of data; protection of the rights of children and women; empowerment of children and young people to participate in decisions affecting their lives; mine action; and promotion of the rule of law and human rights. In all cases the UN agencies will support the Government in establishing and reinforcing mechanisms to promote and protect the rights of the entire population.
National Priority 2: Basic needs for health and education are met for all people. This national priority relates to objectives set forth in the SPPRED, five MDGs (achieve universal primary education, promote gender equality and empower women, reduce child mortality, improve maternal health, and combat HIV/AIDS, malaria and other diseases), the Convention on the Rights of the Child, and other international instruments of the UN system.
As demonstrated in the CCA, the population of Azerbaijan has endured a sharp deterioration in the health and education services available to them since the collapse of the Soviet Union. This deterioration—combined with the effects of income poverty and other forms of vulnerability—is reflected in the country’s indicators of health, nutrition, and learning achievements.
During the UNDAF period, the UN agencies will help Azerbaijan to increase the efficiency and quality of health services, to strengthen family-based health, nutrition, and child rearing practices, and to combat health problems of particular concern, including HIV/AIDS, STIs, malaria, and micronutrient deficiencies. They will also support active learning, child friendly primary schooling, and community-based early childhood education. Improvements in the quality and comprehensiveness of health and education data are envisioned, especially regarding child and maternal mortality. Interventions in the areas of health and education will extend to the national, local, community, and family levels.
Vulnerable populations. Whereas the CCA addressed the challenges related to human displacement as one of its three main categories for analysis, the UNDAF reflects recent research indicating that poverty and vulnerability affect the population of Azerbaijan as a whole. The Government has clearly identified the segment of the population that is displaced; the current challenge is to target vulnerable people among both the displaced and the general population. This change in focus is consistent with changes in donor interest.
3. Estimated Resource Requirements
A gap has been identified between the estimated cost of reaching the UNDAF and Country Programme Outcomes and the total resources likely to be available from within the UN System. Once the Baku-Tbilisi-Ceyhan oil pipeline and the South Caucasus gas pipeline come into operation early in the UNDAF period, state revenues and the involvement of international oil companies in Azerbaijan are expected to expand markedly. The best prospects for resource mobilization
therefore involve cost-sharing with the Government and the private sector. Strategies to mobilize funding will reflect these opportunities while building upon the UN's established relationships with bilateral and multilateral donors.
4. Implementation
The UNCT has approved the establishment of theme groups and task forces to coordinate and manage the implementation of the UNDAF. A Theme Group on Poverty Reduction, led by UNDP, will focus on National Priority 1, and a Theme Group on Health and Education, led by UNICEF, will focus on National Priority 2. Task forces will coordinate and manage UNDAF implementation in the areas of HIV/AIDS (for which a UN Theme Group already exists), communication, emergency preparedness and crisis/risk management, operations, and other cross-cutting issues as required.
The theme groups and task forces will report to the UNCT. Their Terms of Reference will include reviewing joint work plans, reviewing monitoring and evaluation activities, and ensuring information sharing. All UN agencies will be encouraged to participate in all meetings of the theme groups and task forces, and relevant and interested stakeholders will be invited. Task forces on cross-cutting issues will be formed as needed.
5. Monitoring and Evaluation
UNDAF M&E Plan. A Monitoring and Evaluation (M&E) Task Force, reporting to the UNCT through the UNDAF Steering Committee, prepared an UNDAF M&E Plan, which the UNCT adopted in November 2003. The M&E Task Force of representatives from UNDP, UNFPA, UNICEF, the Office of the UN Resident Coordinator, WFP, and the World Bank is responsible for implementing the M&E Plan.
UNDAF Midterm Review. The UNCT has agreed to undertake an UNDAF Midterm Review in 2007 to assess achievements and shortcomings and to identify strategies for the remaining UNDAF period. Since the current SPPRED (2003-2005) covers only the first year of the UNDAF, the Midterm Review will enable the UNDAF to reflect and support subsequent national poverty reduction and development plans.
Final UNDAF Evaluation. In 2008 (the penultimate year of the UNDAF), the UNCT will conduct a joint Final UNDAF Evaluation. The Final Evaluation will cover UNCT performance under the UNDAF in terms of (1) its impact and the sustainability of impact, (2) its relevance to Azerbaijan’s pursuit of the MDGs, the targets of the SPPRED and subsequent national poverty reduction strategies, and other development commitments, (3) its positioning within the development community, (4) its effectiveness in contributing to the intended Outcomes, and (5) the efficiency and effectiveness of the UNDAF as a coordination framework.
Coordination and management of M&E. The UNCT will coordinate UNDAF monitoring and evaluation by arranging theme groups, surveys, joint field visits, outcome evaluations, and other mechanisms. Stakeholders from the Government, civil society, and the international community will be invited to participate in these mechanisms as appropriate. The groups and individuals assigned to perform M&E tasks will report their findings to the UNCT through the M&E Task Force.
Strengthening national M&E capacity. The SPPRED and CCA identify a number of areas where national M&E capacity building is needed. Accordingly, the UN system in Azerbaijan—in partnership with the World Bank, the Asian Development Bank, and other partners—will continue supporting the data collection, research, and monitoring functions of the Government throughout the UNDAF period. This support aims to enable effective national monitoring of progress toward the MDGs and toward the targets of the SPPRED, subsequent national poverty reduction strategies, and other international instruments to which Azerbaijan is a party. The UN agencies will continue strengthening the SPPRED Secretariat’s Poverty Monitoring Unit and will work with relevant ministries to build poverty monitoring and analysis capacities. Development Information software (DevInfo) will be introduced, and national counterparts will gain capacity to use the software for development monitoring purposes.
The UNDAF M&E process will remain closely aligned with national M&E processes, including the Household Budget Survey, the Labor Force Surveys, and the Demographic and Health Cluster Surveys.
In accordance with needs identified in the SPPRED and CCA for national M&E capacity building, particular emphasis will be placed in the following areas:

  • The collection and analysis of data on vulnerable groups as needed to enable effective targeting of social assistance.

  • Improvement of the national health information system with the objective of bringing official health statistics into line with international standards.

  • Improvement of the national education information system, including the collection and analysis of data that accurately reflects attendance and learning achievements.

  • Establishment of a comprehensive database for social protection and child protection information systems.

  • Gender disaggregation of all official socioeconomic data.

The UNCT is also supporting the implementation of Azerbaijan’s National ICT Strategy and MIS Plans, which aim to enhance ICT capacity and access within the Government and the general population and to ensure conformity with international standards. This process will contribute to national M&E capacity.

Risks and assumptions. The UNCT made a number of assumptions in preparing the UNDAF. These assumptions, and the risks related to them, may affect the achievement of the Outcomes. The assumptions include the following:

  • Macroeconomic stability continues.

  • Political stability continues.

  • The management of the State Oil Fund effectively shelters the economy from the volatility of world oil prices. (This is part of UNDAF Outcome 1 and, with respect to other Outcomes, an assumption.)

  • Conflict does not resume.

  • Changes in the regional and international political environment do not have adverse impacts on socioeconomic conditions in Azerbaijan.

  • Social development receives priority attention.

Table 2. Results Matrix

United Nations Development Assistance Framework

Azerbaijan: 2005-2009


Gender equality and the empowerment of women, civil society development, and respect for human rights

National Priority 1: The system of governance ensures an enabling environment for development, poverty reduction, and respect for rights and freedoms

UNDAF Outcome 1: The effective and transparent management of oil resources leads to increased decent employment in the non-oil sectors (black gold is converted into human gold)

Country Programme Outcomes

Country Programme Outputs


1.1 Effective and transparent management of state oil and pipeline revenues contribute to development of the non-oil sectors (UNDP)

1.2 Decent employment increases in the non-oil sectors, particularly for vulnerable people (ILO, UNDP, UNHCR)
1.3 Private investment in the non-oil sectors increases (UNDP)

      1. Components of national strategy implemented for sustainable investment of oil and pipeline revenues in non-oil sectors

      2. Selected recommendations of BTC/SCP Poverty Impact Assessment implemented

1.2.1 Components of state employment and regional development programmes implemented

1.2.2 Labor Force Surveys conducted annually

1.3.1 Investment promotion and capacity building support provided to Azerbaijan Foundation for Investment Promotion and Advice

1.1 SOFAR, MED, BP, BTC Consortium, international/regional financial institutions


1.3 MED, AFIPA, international/regional financial institutions, private sector

Coordination Mechanisms and Programme Modalities: A Thematic Group for Poverty Reduction, chaired by UNDP and reporting to the UNCT, will coordinate the contributions of UN agencies/partners to UNDAF Outcome 1. The Thematic Group will have responsibility for reviewing joint work plans, reviewing M&E progress, and ensuring information sharing. Relevant and interested stakeholders will be included in the Thematic Group. Task Forces on cross-cutting issues will be formed when and as needed.

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