The European Commission is providing an Exceptional Assistance Programme for Azerbaijan for 1998, worth ECU 10.85 million, and to run until December 31, 2001. The objective of this special programme is to assist the former Soviet republic to cope with the difficult social circumstances in the country. Although Azerbaijan has made good progress on economic reforms in the past few years, the social situation in the country remains difficult. As a consequence of the Nagorno Karabakh conflict with Armenia, and the occupation of 20% of the country's territory, close to one million people have been forced to flee their homes. Supporting these refugees and internally displaced people places a severe strain on the country's economy. The average wage in the country is USD30 a month and over 70% of the population lives below the poverty line.

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