Quality of life in Armenia and Azerbaijan

The Development of the Village Will not Turn It into a City

– Obviously there are as many opinions about the quality of life in Armenia as the citizens living in the country. However, there are scientific parameters (indexes) to assess the quality of life of the whole society. Do these indices differ from those standards by which people feel the progress or regression in their living conditions in the country? – What is the purpose of such studies, when was the latest conducted in Armenia, and what is the conclusion drawn from the main outcomes on Armenia?

– In order to understand how the residents of Armenia evaluate the quality of their lives, we should first of all determine what the quality of their lives means to them. It should be taken into consideration that we are a consumer type society. With such a large diversity of goods and services available there is a rich choice and the quality of life here does not depend on whether one can satisfy his/her basic needs, but on how one does it.  Think of a situation when one cannot afford to buy an item of clothing that he/she likes, even though in fact one has some things to wear. This person will have a feeling of dissatisfaction with his/her life, and this circumstance will impact on his/her perception of his/her quality of life. In a consumer society the meaning of the concept “quality of life” changes. It has not only an objective, but also a subjective interpretation.

There are various scientific approaches to the evaluation of the quality of life. The most primitive method is the consideration of the average duration of life in the given country and the GDP, and on this basis to calculate the level of the material security. More complicated approaches require the account of such factors as environmental pollution, the level of safety, education, the political situation, the existence of green areas, the cost of the Internet, the level of crime, accessibility and affordability of medical services and many other factors. The most important index in another approach to assess the quality of life is the air pollution level. The authors of this approach explain that if the environment is polluted, all the other factors become secondary.

I have observed that the scientific criteria to assess the quality of life in Armenia differ from the assessment criteria the residents of the country use to assess it themselves. With us the quality of life is measured by material security, and since this is quite a popular approach, people do not ascribe due significance to other major factors. For example, I have had to frequently hear a stereotypical statement that it is better to die with a full stomach in a polluted environment, than to be hungry in pure air. When money and goods are the top value for the society, other important conditions for normal life are receded into the background. This is the situation one may observed in Armenia at the moment.

The data collected by the National Statistical Service of the RA may somehow contribute to the assessment of the quality of life in Armenia. But international organizations are the entities that jointly with local partners conduct assessments of the quality of life in all countries once a year. What is the use of such surveys? In the conditions of globalization the governments of countries need to have comparable data to make decisions.

Such surveys allow for the determination of their own positions and a comparison of their own positions with those of other countries.

The annual surveys of The Economist are well known. The results of this survey are uploaded onto their website (www.economist.com). The quality of life is measured by a ten-point scale. Switzerland, Germany, the USA occupy the highest positions (with a bit more than 8 points). Armenia and Azerbaijan occupy similar positions – they come the fifth which testifies to the average level of quality of life in both countries.

– What is the correlation between the incomes and costs incurred by the citizens of Armenia today: how much is the average salary or pension? What benefits are paid (for example, for children)? How much are the basket of goods, utility costs and so on?

– The minimal salary in Armenia is 35 thousand AMD (approximately 87 USD). The average salary is about 300 USD. But this quite an approximated indicator, since there is also the shadow economy. Since 2012 the size of base pensions came up to 13.000 (approximately 33 USD) instead of the previously fixed 10.500 USD (approximately 26 USD). The size of the average employment pension was raised from 28.700 AMD to 31.300 AMD (approximately 77 USD). There is the welfare system that pays benefits for unemployment, disability, pregnancy and birth, old age, and benefits paid in connection with the loss of the breadwinner.

The utility costs are about 1/3 of the average salary in Armenia.

It is common knowledge that many live at the expense of transfers. Certainly, the income of the population does not comply with expenses. The majority of the people in Armenia spend the money earned abroad. By the way, not taking into account that they themselves do not earn that much. And this circumstance also contributed to the spread of consumer mentality.

–  Is the quality of life and the living standard in the capital different from that in the regions of the country? What does this difference consist in? Where are more people involved in state budget organizations or in the private sector? Who lives better – employees at state budget structures or in the private sector?

– Most public services are centralized in the capital and large cities which in its turn impacts on the perceptions of the quality life in Armenia. In general the indicative criterion of the quality of life is migration, including internal migration. People yearn for moving into capital from the regions, because there is a possibility to find a job here, there is a choice of education and recreation. This means that the residents of the regions are not satisfied with the quality of their life in their original places of residence.

The problem also consists in the fact that the perceptions of the city and rural areas are distorted. People normally think that when a village develops, it turns into a city. Meanwhile, the village gets improved, with well-provided households, where life may be very comfortable and profitable. We do not yet have a formed idea of a well-off village, which is why the residents in rural areas have a perception of deprivation and dissatisfaction. Certainly, one of the reasons for such a perception is social insecurity. The factor of labor migration is added here, when the residents of villages do not want to lead a rural life and to do the relevant jobs.

– How will the increase in the prices of gas, electricity and so on affect the quality of people’s lives?

– It is obvious that the increase in the prices will significantly impact on the quality of life, since as a result, everything will become more expensive, not only the utilities. This will lead to the increase of poverty in the society. At that, first of all the segment of the population that was considered poor will be the one most affected. This will make the so-called middle class vulnerable which is especially dangerous, because the middle class in all societies plays the role of the buffer and retrains abrupt changes. It is for this very reason that on the way to reinforce stability in all societies they try to enlarge the middle class. If the middle class with us becomes poor, the social polarization of the society as a generally valid problem will become more topical, and this may have unpredictably negative consequences for the development of the society at large.

An Increase in the Utility Costs Is Expected in 2014

– Obviously there are as many opinions about the quality of life in Azerbaijan as the citizens living in the country. However, there are scientific parameters (indexes) to assess the quality of life of the whole society. Do these indices differ from those standards by which people feel the progress or regression in their living conditions in the country? – What is the purpose of such studies, when was the latest conducted in Azerbaijan, and what is the conclusion drawn from the main outcomes on Azerbaijan?

– The quality of life is determined by numerous indicators, the main ones of which are the level of income, education, healthcare, child mortality, duration of life, efficiency of the activities of governmental entities, and there are some other parameters apart from the above-mentioned. According to the data of the English journal The Economist that ranked 80 countries by their quality of life, Russia, for example, was rated the 72^nd, while Azerbaijan did not go into those 80 countries. Such surveys are necessary to show the authorities in the country the problems, to diagnose and to undertake the necessary steps to eliminate the problems.

– What is the correlation between the incomes and costs incurred by the citizens of Azerbaijan today: how much is the average salary or pension? What benefits are paid (for example, for children)? How much are the basket of goods, utility costs and so on?

– By official data the average salary as of January 2013 is 398 Manats (503 USD), but the government does not make it clear what the indicator for the calculation of the average salary in the country is. By the estimates of independent experts, there are problems in the calculations of the average salary and the subsistence wage. The average pension in the country is 163 Manats (200 USD), but there are problems with the calculations here, too.

The subsistence wage in the country for 2013 has been fixed as 116 Manats (145) USD. This level does not comply with the reality in the country. This standard is determined by the government, and by means of figure manipulations, they report that in the last 10 years the level of poverty has dropped five times. To compare we should state that in one of the poorest countries in the EU – Bulgaria – the subsistence wage is about 200 Euros. And the prices there are much less than in Azerbaijan. If such a minimum is established in the country, there will be much more people over the poverty line, than according to official statistics.

–  Is the quality of life and the living standard in the capital different from that in the regions of the country? What does this difference consist in? Where are more people involved in state budget organizations or in the private sector? Who lives better – employees at state budget structures or in the private sector?

– The salaries in the regions are different from those in the capital, especially in commerce; correspondingly, the prices are different from those in Baku. In the sphere of services the process are significantly different. In budget organizations and in all spheres financed from state budget as well as public industries about 900 thousand citizens work. This is about a quarter of the able-to-work population in the country. In the private sector about a million people are engaged in the private sector, and almost as many are busy in agriculture. In many state and budget organization there is also shadow accountancy apart from the official salary, the so-called “envelop salary” and of course the income gained from corruption.

– How will the increase in the prices of gas, electricity and so on affect the quality of people’s lives?

–  The increase in the prices of utilities, especially those of electricity, petrol and gas happened in 2007. At that time this significantly affected the level of inflation. In the recent years no increase in the prices has happened, and this year taking into consideration the fact that it is the year of presidential elections, I do not think that the authorities will dare to increase these prices. And after the elections at the beginning of 2014 an increase in these prices is expected, and this step will considerably strengthen the inflation tension on the economy, moreover, it will bring down the real income of the population.