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RESTART
INITIATIVE

Building Connections for Development in
Azerbaijan and the South Caucasus

A Private-Public Partnership focusing on digital skills can help in the rebuilding of Karabakh

Updated: May 10



On April 23, 2022, Commonspace, a publication from Links Europe published an opinion piece by Senior Policy Analyst and Researcher Khalisa Shahverdiyeva and Restart Initiative Executive Director Jeanene Mitchell. We republish it below.


The global COVID-19 pandemic heralded an unprecedented scale of digital technology use. As the lockdowns of 2020 and 2021 forced people to turn to e-learning, remote work, online shopping, and other e-services, the digital world became an even more inexorable part of daily life – albeit for those with digital literacy skills and access to technology.


Accelerated digitalization caused by the pandemic has exacerbated digital inequalities, particularly among rural and urban communities in Azerbaijan. It has also amplified social and economic vulnerabilities. As Azerbaijan seeks to rebuild following the Second Karabakh War and to facilitate the return of Internally Displaced Persons (IDPs) to their homelands, addressing this digital divide is both an imperative and an opportunity to build digital skills and literacy within the IDP community.


Even before the dual shocks of the pandemic and the war, Azerbaijan had embarked on a national policy of revitalizing rural economies through technology and innovation. The policy gained a new sense of urgency in the post-conflict context with the need for an ambitious reconstruction plan in Karabakh, leading to the pursuit of a Smart City/Village development concept for the region. Yet the massive project of reconstruction and resettlement in smart cities presents challenges to both the Azerbaijani government and the IDP community, due to financial constraints, inefficient governance, limited innovation, and weak digital skills.


Public-private partnerships (PPP) focused on digital skill-building in Karabakh can leverage the knowledge and resources of the private sector to address the digital literacy gap, increase recourse to online services and e-governance, and facilitate sustainable economic growth in Azerbaijan. By mobilizing human capital and increasing access to private finance for the design and implementation of digital inclusion strategies, the PPP model can support Azerbaijan’s agenda for the development of Karabakh. Such strategies will provide IDPs with increased economic prospects in a world of accelerated digitalization, while helping Karabakh as a region – as well as Azerbaijan as a whole – build its digital infrastructure.


According to a 2019 study by the Asian Development Bank, approximately 78% of the population in Azerbaijan used the internet in 2016, which globally makes it one of the countries with the highest levels of internet access. Paradoxically, however, small and medium enterprises and the general population still have low digital literacy levels. A 2021 World Bank analysis on Smart Villages in Azerbaijan notes that knowledge of e-commerce and e-payment systems are limited, with only 5% of Azerbaijanis purchasing something online in 2017, compared with 24% worldwide. The report further points out the digital divide between rural and urban areas in Azerbaijan, with a fixed internet penetration gap of 20% between rural and urban households.


For the resettlement and redevelopment of Karabakh, it is essential to address the existing digital obstacles of online service provision and employment skills of returning IDPs. Unemployment remains the top issue for lifting IDPs, particularly women, out of poverty. According to the official statistics for 2020, women comprise 57.5% of the unemployed population in Azerbaijan. However, data indicates that this number is much higher for IDP women. In 2021, a study by the “Women's Empowerment for Sustainable Development” Public Union found that 70% of respondents remained unemployed at the time of the survey in 2021. Many IDP women live on allowances and other forms of financial support as a result. The high unemployment rates among respondents are evidence of missed economic opportunities for these women and their communities.


Achieving the goal of digital skill-building for the reconstruction of Karabakh will require a portfolio of PPP projects and initiatives, among which coordination will be key to success. A PPP Consortium focusing on digital skills-building for Karabakh could undertake a broad program of initiatives that meets the digital needs of IDP communities. Such initiatives would also help achieve the “Azerbaijan 2030: National Priorities for Socio-Economic Development,” a Presidential decree issued in February 2021 recognizing the importance of digital skills development and aiming to expand the digital economy.


Currently, there is no central institution responsible for management, risk estimation, monitoring, and reporting related to PPPs in Azerbaijan, as described in this article by PwC. The Consortium could therefore be led by the State Agency for Public Service and Social Innovations that reports to the Presidential Office in Azerbaijan. Under the PPP Consortium, the key role of the Agency would be to bring together key partners across governmental, private, and non-governmental stakeholders. An international entity, such as a UN agency – like the World Bank or UNDP – or other international development institution could oversee the consortium to ensure good governance.


Creating a PPP Consortium to develop digital literacy among IDP communities will require considerable human, financial and physical investment, an enabling legal framework, and political will. Yet such investment supports the development of competitive human capital and innovation, as well as implementation of the Smart Cities/Village reconstruction plan for Karabakh. It builds economic and societal resilience by enabling Azerbaijan to take advantage of post-pandemic digital advancement opportunities. Most importantly, a PPP Consortium creates the institutional framework to bestow IDPs with the digital skills needed to thrive in their homelands once again.


Khalisa Shahverdiyeva is a senior policy analyst and researcher, and co-founder and chairperson of “Women's Empowerment for Sustainable Development” Public Union. Currently, Khalisa is a Hubert H. Humphrey Fellow, studying Public Policy and Public Administration at the Maxwell School of Syracuse University, and focusing on gender-responsive climate policies, public-private partnerships for sustainable development and digital inclusion.


Jeanene Mitchell PhD is the co-founder and Executive Director of Restart Initiative, a non-profit organization with the mission of building connections for development in Azerbaijan and the South Caucasus. She is an international development professional and area studies expert in the South Caucasus and Turkey.


You can read their policy paper: Private-Public Partnership Consortium: Digital Skills Building 4 Karabakh here.


Image: Institute of Entrepreneurship Development (iED)