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Azerbaijan strengthens investment fight

Business Materials 19 April 2015 16:04 (UTC +04:00)
The political map of the world is undergoing change.
Azerbaijan strengthens investment fight

Baku, Azerbaijan, Apr. 19

By Azad Hasanli - Trend:

The political map of the world is undergoing change. The global financial crisis, the conflict in Ukraine and the subsequent Western sanctions on Russia, retaliatory sanctions of the Russian Federation and the fall in oil prices - all these propelled the search for alternative markets and new sources of profit.

In these conditions, Western countries often turn to the East, which have proved to be more resilient to the external shocks than Europe.

Azerbaijan is not a traditional eastern country. It is located at the crossroads of East and West. That's why, countries such as Azerbaijan, have been recently seen as promising markets for investment.

For example, the construction of the Baku-Tbilisi-Kars (BTK), which will connect Europe and Asia, will allow opening a cheaper transport corridor. Making it appropriate to speak not only about investments, for example in joint ventures, but also the possibility of smooth delivery of goods to the markets of the third countries.

Every year Azerbaijan improves conditions for attracting foreign investors. The new industrial, chemical-industrial and agrarian parks, high-tech parks are operating and are being established in the country. Investors wishing to work in these parks are provided with the tax and customs privileges, allowing them to reduce production costs.

These innovations make it not surprising that foreign investments in the country is growing from year to year. They increased by 47 percent up to 1.5 billion manat in the first quarter of 2015 compared to the same period of 2014. For comparison, the investments in the first quarter of 2014 increased by almost 10 percent compared to the same period of 2013. These figures clearly demonstrate the attractiveness of the Azerbaijani market to foreign investment.

In general, about 45 percent of all investments in fixed capital have been attracted from abroad since the beginning of the year. But this is not the limit. Five business forums with the participation of businessmen from Belgium, Vietnam, Saudi Arabia, Russia, the Netherlands are expected to be held in Baku. Azerbaijani businessmen are expected to visit Hungary and the Netherlands. Moreover, they have recently had meetings with businessmen from Singapore, Italy and Serbia.

If Russia and Italy are long-term strategic and trade partners of Azerbaijan with a total turnover of around $7 billion (an index as of 2014), the foreign trade turnover with the rest of these countries during the same period amounted to about $ 600 million.

Therefore we can say that Azerbaijan is new, still unexplored market for these countries. But it is clear that Azerbaijan can cooperate with these countries in a number of areas, namely, agriculture, ICT sector, industry, including the petrochemical industry.

Azerbaijan pays special attention to the development of non-oil sector, focusing on the establishment of high-tech production. Therefore, the country is looking for not only new financial but also human resources. Certain activity is conducted in this area. The procedure for obtaining a work permit in the country and other procedures for doing business in the country are being simplified.

Not only is there great interest in Azerbaijan as a country with a favorable investment climate, but also good opportunities for work. And in the case where demand creates supply, the number of foreign workers wishing to work in Azerbaijan now exceeds the country's quota.

Azerbaijan has recently begun to actively seek new sales and investment markets. The devaluation of the manat (Feb. 21) played a positive role in this regard. It has allowed domestic producers to reduce production costs in the country. This makes the Azerbaijani products more competitive on foreign markets.

Azersun Holding director general Savas Uzan also said that the devaluation would open up new opportunities for local entrepreneurs. He said that the decline in domestic spending allowed the products produced on the holding enterprises to be delivered to the European market. Most likely, this example will not be the last one. Many local companies will be able to expand their presence in other countries.

During such a difficult period in global policy and economy, Azerbaijan is in a position to create opportunity, to establish close ties with the new countries by developing its economy and expanding its influence in the world.

Edited by CN

Azad Hasanli is Trend Agency's staff journalist, follow him on Twitter: @AzadHasanli

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