Introduction

In 2006 and 2007 the momentum of economic development strengthened in the three states of the Southern Caucasus, as demonstrated by the continued high levels of growth in their gross domestic product (GDP). However, inflationary pressure has been significant during the last five years and macroeconomic reforms and fiscal discipline remain important policy objectives, both for Azerbaijan as an oil producer, and for its neighbours, Armenia and Georgia.

The period 2005–2007 witnessed further reforms, particularly in the education sector. At the same time, demographic and labour market trends, which have been broadly recognised in various state programmes and policy papers of the period, intensified the key challenges for education policies. Despite their diverse economic and political paths towards progress on poverty reduction and economic diversification objectives, the three countries in the region face a common development commitment: to make significant investment in their human resource development agendas.

Another incentive for reform came with the approval of the European Neighbourhood Policy (ENP) Action Plans with the EU in November 2006. Southern Caucasus states have thus accepted both the challenges and the opportunities offered by the new policy and the related new instrument of cooperation, the European Neighbourhood Policy Instrument (ENPI). The three Action Plans emphasise the area of education, training and young people, and aim to ‘reform and modernise the education and training systems within the framework of country plans towards convergence with EU standards and practice’ (Armenia and Georgia) and ‘reform and modernise the education and training systems within the framework of Azerbaijan's reform programme’.