Logical Framework Matrix

Terms of reference
Vocational Education and Training Reform Strategy and Pilot Implementation in a selected region in
Azerbaijan
1. BACKGROUND INFORMATION
1.1 Beneficiary country
Azerbaijan
1.2 Contracting Authority
The European Community, represented by the European Commission for and on behalf of
the beneficiary country
1.3 Relevant country background
With an estimated population of 8.5 million, Azerbaijan possesses rich mineral and natural
resources. Average growth of GDP in 2000-2004 was about 10.5%. In 2005 it increased to
26.5% and it grew to 35% in 2006, before returning to 25% in 2007. Most of this growth is
driven by investments in the oil sector and in particular the opening of the Baku – Tbilisi –
Geihan oil pipeline in 2005. Government projections (2004-2010) indicate a fivefold
growth in exports of oil products, while non-oil exports will grow by some 30%.
The total number of economically active population increased moderately since 1995 and
has reached 4 million by now. Men represent a much larger share than women (58.5%
against 41.5%) in the employed population. Major employers are the state sector and
farms. The number of own-account workers (self-employed, micro individual firms,
informal activities, people hired by individuals) exceeds the number of those employed in
larger and medium-sized enterprises.
The number of those employed by the state owned industrial enterprises has decreased
drastically from 2.6 million in 1990 to 1.2 million in 2004, while those employed in the
non state enterprises contrarily increased from 1.1 million in 1999 to 2.6 million in 2004.
Those employed in the state sector display by far the best educational profile, with
approximately half having higher education and over one third VET qualifications. The
private enterprises show a predominance of people with general education followed by
those with VET qualifications. Only 22% obtained higher education qualifications in the
private sector.
The 2003 labour force survey determined the unemployment rate at the level of 10.7%, or
over 404,000 unemployed people that year. The highest level of unemployment (23.8%)
was discovered in the economically active youth group of 20-24 years.
Unemployment and poverty rates are not directly correlated. A large share of the poor
population is actually employed. According to the household budget survey of 2003,
approximately 40% of those who were employed lived below the poverty line. The
prevalence of poverty has a direct correlation with low productivity work and high
dependency rates.
Page 3