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National Urban Assessment 2017 Strengthening Functional Urban Regions in Azerbaijan National Urban Assessment This publication helps guide investment planning and financing across key urban infrastructure sectors of Azerbaijan to improve the performance of cities—with a focus on economy, equity, and environment. The National Urban Assessment for Azerbaijan is among a series prepared by the Asian Development Bank for selected developing countries under its Urban Operational Plan 2012–2020. About the Asian Development Bank ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 67 members— 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. STRENGTHENING FUNCTIONAL URBAN REGIONS IN AZERBAIJAN National Urban Assessment 2017 DECEMBER 2018 ASIAN DEVELOPMENT BANK 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines ASIAN DEVELOPMENT BANK www.adb.org STRENGTHENING FUNCTIONAL URBAN REGIONS IN AZERBAIJAN National Urban Assessment 2017 DECEMBER 2018 ASIAN DEVELOPMENT BANK Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) © 2018 Asian Development Bank 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines Tel +63 2 632 4444; Fax +63 2 636 2444 www.adb.org Some rights reserved. Published in 2018. ISBN 978-92-9261-378-5 (print), 978-92-9261-379-2 (electronic) Publication Stock No. TCS179176 DOI: http://dx.doi.org/10.22617/TCS179176 The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent. ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. The mention of specific companies or products of manufacturers does not imply that they are endorsed or recommended by ADB in preference to others of a similar nature that are not mentioned. By making any designation of or reference to a particular territory or geographic area, or by using the term “country” in this document, ADB does not intend to make any judgments as to the legal or other status of any territory or area. This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) https://creativecommons.org/licenses/by/3.0/igo/. By using the content of this publication, you agree to be bound by the terms of this license. For attribution, translations, adaptations, and permissions, please read the provisions and terms of use at https://www.adb.org/terms-use#openaccess. This CC license does not apply to non-ADB copyright materials in this publication. If the material is attributed to another source, please contact the copyright owner or publisher of that source for permission to reproduce it. ADB cannot be held liable for any claims that arise as a result of your use of the material. Please contact [email protected] if you have questions or comments with respect to content, or if you wish to obtain copyright permission for your intended use that does not fall within these terms, or for permission to use the ADB logo. Notes: In this publication, “$” refers to United States dollars. On the cover: ADB’s support for urban development has helped improve road conditions in Azerbaijan (photos by ADB). Corrigenda to ADB publications may be found at http://www.adb.org/publications/corrigenda. Printed on recycled paper iii Contents Tables, Figures, Boxes, and Maps v Abbreviations vii Acknowledgments ix Executive Summary xi 1 Introduction 1 2 Country Profile 3 2.1 Location: At the Crossroads of Asia and Europe 3 2.2 Political History and System: Transition at the Crossroads 4 2.3 Economy: Economic Diversification at the Crossroads 9 2.4 Urbanization Profile 12 2.4.1 Demographic Analysis 12 2.4.2 Spatial Analysis 12 2.4.3 Internally Displaced Persons 14 2.4.4 Land Use, Land Management, and Land Use Planning 16 2.5 Governance of Urban Development and Service Provision 18 2.6 Urban Finance Matrix 19 2.7 Enabling Environment for Urban Competitiveness 24 2.8 Competitive Base: Economic Profile 27 2.8.1. Macroeconomic Performance 27 2.8.2 Sectoral Analysis 28 2.8.3 Employment 29 2.8.4 Spatial Distribution of Economic Activity 31 2.8.5 Economic Diversification Prospects and Policies 35 2.9 Inclusive Base: Equity Profile 36 2.9.1 Inclusiveness of Economic Growth 37 2.9.2 Poverty Status 37 2.9.3 Gender Status and Policy 38 2.10 Green Base: Environmental Profile 40 2.10.1 Climate Change 40 2.10.2 Greenhouse Gas Emissions 41 2.10.3 Vulnerability 41 iv Contents 3 Urban Needs Assessment 43 3.1 Overview 43 3.2 Water Supply and Sanitation 43 3.3 Solid Waste Management 45 3.4 Transport 47 3.5 Energy 49 3.6 Telecommunications 50 3.7 Housing 51 4 Urban Vision and Strategic Prioritization 53 4.1 National Urban Strategies 53 4.1.1 Azerbaijan 2020: A Look into the Future and the Strategic Roadmap on the National Economy and Main Economic Sectors 53 4.1.2 State Program on Poverty Reduction and Sustainable Development for 2008–2015 55 4.1.3 State Program on Socioeconomic Development of Regions, 2014–2018 56 4.2 Urban Vision and Strategy Priorities 59 4.2.1 Urban and Regional Economic Development: Past Achievements, Future Challenges 59 4.2.2 The Urban Development Strategy Framework: A Three-Level Approach 60 5 Policy and Programming 66 5.1 ADB Support in Urban Development 66 5.2 Current Development Partner Focus 68 6 Recommended Priority Interventions 69 References 71 v Tables, Figures, Boxes, and Maps TABLES 1 Internally Displaced Persons Concentration in Rayons, 2008 15 2 Gross Value Added of Output by Economic Activities, 2017 (AZN million) 29 3 Employment by Economic Activity Sectors, 2000–2014 30 4 Industrial and Agricultural Production by Economic Region, 2014 32 5 Employed and Unemployed by Gender, 2014 38 6 Recommended Priority Interventions 70 FIGURES 1 National Urban Assessment Framework 1 2 Institutional Structure of Executive Governance 8 3 Total Urban and Rural Populations, 1994–2015 (million) 12 4 Urban Population Changes of Rayons and Cities (Excluding Baku),1995–2015 13 5 Level of Urbanization by Economic Region, 2015 (%) 14 6 Urban Finance Matrix 20 7 Budget Revenue Sources, 2015 and 2016 (AZN billion) 21 8 Azerbaijan Ranking Changes in World Bank’s Doing Business Survey, 2010–2015 25 9 Azerbaijan’s Ranking in 10 Doing Business Survey Topics 26 10 Doing Business Survey Ranking of Azerbaijan and Comparator Economies 27 11 Oil Production and Gross Domestic Product Growth Rates, 2003–2013 (‘000 tons) 28 12 Average Monthly Wages and Salaries by Kinds of Economic Activity in 2013 31 13 Greenhouse Gas Emissions, 1990–2011 (metric tons) 41 14 State Program on Socioeconomic Development of Regions Projects by Region, 2014–2018 58 15 Urban Development Framework 61 vi Tables, Figures, Boxes, and Maps BOXES 1 The State Oil Fund of the Republic of Azerbaijan 10 2 Azerbaijan 2020: A Look into the Future 11 3 Azerbaijan 2020—A Synopsis of the Vision 54 4 Azerbaijan 2020—Key Policy Measures 54 5 State Program on Poverty Reduction and Sustainable Development Strategic Goals 56 6 Key National Urban Assessment Strategy Drivers 60 MAPS 1 Azerbaijan at the Crossroads of Asia and Europe 3 2 Largest Urban Population Centers, 2014 6 3 Azerbaijan’s Economic Regions 7 4 Urban Centers with More Than 12,000 Employees, 2015 33 5 Functional Urban Regions—Distribution of Existing and Potential Economic Activity Drivers 34 6 Functional Urban Regions—Economic Activity Drivers of Potential Urban Clusters and Corridors 64 vii Abbreviations ADB – Asian Development Bank AZN – Azerbaijan manat CIS – Commonwealth of Independent States CPS – country partnership strategy EBRD – European Bank for Reconstruction and Development EU – European Union DMC – developing member country GDP – gross domestic product ICT – information and communication technology IDP – internally displaced persons IFC – International Finance Corporation IFI – international finance institution km – kilometer m – meter m2 – square meter m3 – cubic meter MDG – Millennium Development Goal NAR – Nakhchivan Autonomous Republic NUA – national urban assessment PPP – public–private partnership SCUPA – State Committee for Town Planning and Architecture SOFAZ – State Oil Fund of the Republic of Azerbaijan SPPRSD – State Program on Poverty Reduction and Sustainable Development viii Abbreviations SPSDR – State Program on Socioeconomic Development of Regions SWM – solid waste management UN – United Nations UOP – urban operational plan ix Acknowledgments Government of Azerbaijan Ministries Adalet Aliyev, deputy head, Infrastructure Finance Department, Ministry of Finance Elchin Ahmedov, deputy director, Ministry of Economy (Department for Cooperation with International Organizations) Ismail Sadigov, head of department, Ministry of Education Mahabbat Mammadov, deputy for preparation of state programs, Ministry of Energy Ilgar Rahimov, deputy minister, Ministry of Labor and Social Protection Mutallim Abdulhasanov, head of division, Ministry of Ecology and Natural Resources (Department of Ecology and Environmental Protection Policy) Rufat Taghizadeh, deputy head, Department for International Cooperation, Ministry of Communications and Information Technologies Aydin Ismiyev, head, Tourism Department, Ministry of Culture and Tourism State Committees Dovletkhan
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