Internally Displaced People Remain a Priority in ADB's Program for Azerbaijan in 2005-2006
MANILA, PHILIPPINES (24 August 2004) - ADB is earmarking US$39.1 million per year in loans to Azerbaijan for the next two years, according to the Country Strategy and Program (CSP) Update for 2005-2006 endorsed by ADB's Board of Directors. ADB's focus on assistance to internally displaced people (IDPs) and three sector priorities - agriculture and rural development, social infrastructure, and transport - remains unchanged in the Update. The main challenge facing the Government is the country's high poverty rate, which approached 47% nationally in 2002, with 10% living in extreme poverty. But the country's economic performance remained strong in 2003 and the first quarter of 2004, with gross domestic product growth of 11.2% and 10.6%, respectively. Large inflows of foreign direct investment into the oil sector remained the main engine of growth. The IDP population - totaling about 575,000 - remains one of the most poor and disadvantaged groups in the country, as 63% of the displaced population lives below the poverty line. "Unemployment, malnutrition, high infant mortality and lack of adequate services, water and sanitation are serious problems facing the IDP population," says Marco Gatti, an ADB Senior Country Programs Specialist. "ADB's program will continue to support better housing, improvement of education opportunities and creation of livelihood income generating opportunities for this group." Five loans are planned over the two years. In 2005, projects will tackle early childhood development and social infrastructure for IDPs, while a Central Corridor Roads Improvement project will address the main access route for import and export of goods to and from Azerbaijan. A project to rehabilitate another segment of the central corridor is planned for 2006, along with a project to enhance water supply and irrigation services through rehabilitation of the Samur-Absheron canal. A standby loan to address urban water supply and sanitation is also programmed for 2006. Final lending allocations over the period will depend on country performance and resource availability. Azerbaijan is eligible for funds from ADB's Asian Development Fund, which supports the sustainable development of poor countries in the Asian and Pacific region by providing loans on concessional terms. The country's annual allocation in 2004-2006 is set at $17.1 million, but this could be subject to change. The country is also eligible for loan assistance from ADB's ordinary capital resources and the first OCR loan - for a micro and rural finance development project - is due for consideration by the end of this year. ADB's lending program will be supported by 12 technical assistance projects amounting to about $5.5 million over the two-year period, undertaking a range of economic, thematic, and sector work. Since joining ADB in 1999, one loan - for a flood mitigation project - was approved for Azerbaijan, in December 2003. ADB has also approved 11 technical assistance projects and two Japan Fund for Poverty Reduction grants for Azerbaijan. CSPs define ADB's medium-term development strategy as agreed with the country. A CSP update is usually prepared every year taking into account the continued relevance of the CSP, its implementation, and ADB's operational program. In 2005, a full CSP is planned, to be prepared in dialogue with the Government. Read the full CSP update About ADB | 
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