POLICY STATEMENT
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Title: Child Development Accounts to Combat Child Poverty in Azerbaijan
 
Statement of Issue: According to Unicef (2015) one billion children out of 2.4 billion child population of the world suffer from poverty today. Children experience of poverty as an environment different than adults because it is damaging their mental, physical, emotional and spiritual development. They experience it with their hands, minds and hearts. Poverty everywhere in the world has negative impacts on almost all aspects of family life and out-comes for children. Children raised in low-income families are at risk for academic and social problems as well as poor health and well-being, which can in turn undermine educational achievement. S Material poverty, for instance not having enough or nutritious food or involved in hazardous labour – hinders emotional capacity as well as bodily growth. Growing up in an environment that provides little stimulation or emotional support to children, can take away many of the positive effects of growing up in a materially rich household.
 
Despite a rapid economic growth recently, poverty among the most of 3 million children in Azerbaijan is wide spread. They fall in poverty in their adulthood due to these reasons: 60,000 of children due disabilities; up to 4000 due to living & working in streets; 10,000 due to living under harsh conditions in large institutions & after leaving care (after 18); 500,000 due to living in absolute poverty; due to early marriages mainly girls (12%); due to involvement in extremely hazardous types of labors. One-time, short time or permeant social allowances and benefits, which are in small amount in Azerbaijan are not sustainable or efficient to lift children out of the poverty after 18. As an oil rich country, Azerbaijan can afford to have a sustainable and empowering policy which would guarantee secure and bright future for children. Asset building policies such as Child Development Accounts are best intervention in this context.
 
Policy Alternatives: Child Development Accounts (CDA) is child saving and care accounts. CDAs are one the effective saving strategies, give a systematized & incentivized way for children to accumulate assets. Saving is a great step toward achieving a better future and reducing income and assets inequalities in the long run. Savings may improve life chances for children by increasing investment for their long-term development. The process of saving and building assets may teach money management, foster future orientation, and encourage long-term planning. A growing body of evidence suggests that household savings is associated with educational achievement, operating in part through increased aspirations and expectations. For each child child saving account means building a foundation for economic mobility and acquire assets in early years of their lives. CDAs specially designed accounts opened in children’s own names are a preventive, economic intervention that can complement investments made by existing early childhood interventions and advance their mission of helping children reach their full potential. Poverty is an inhibitor of children’s opportunities for educational and economic advancement. CDAs may also improve parents' psychological well-being as impacts on maternal depressive symptoms may be partially mediated through children's social–emotional development.
In short, savings may help young people successfully transition to adulthood. CDA policies have already been adopted in the UK, Canada, South Korea, Taiwan, China, Uganda, Ghana, Singapore and Israel.
 
Policy Options: In order to give each children a bright and promising future in Azerbaijan, it is recommended to have CDAs as universal policy for every child. The following types of CDAs are recommended for the country. 
1) a mixed CDA: care and saving purposes. Some portion is spent (20%) while child growing up-but the large portion will be saved;
2) to invest in higher education when child graduates from school;
 3) to invest in small business when child is 18 years old;
 4) to invest to buy home when child is 18 years old;
Sources:
https://www.unicef.org/sowc05/english/povertyissue.html
https://csd.wustl.edu/Publications/Documents/WP09-54.pdf
https://csd.wustl.edu/OurWork/FinIncl/GlobalAssetBuild/YouthSave/Pages/YouthSave.aspx
https://csd.wustl.edu/OurWork/FinIncl/GlobalAssetBuild/Pages/gapprojects.aspx
https://jamanetwork.com/journals/jamapediatrics/fullarticle/1815478
http://www.sciencedirect.com/science/article/pii/S0190740909001947

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