High time for entrepreneurs to hurry to industrial towns

In 2007 the fundament of the first industrial town will be made in Azerbaijan. It will cover the territory of around 300h near the Yeni Yashma village, some 49km of Baku. Some 63h is in the territory of Absheron region and 205h in Khizi region, and will represent a special economic zone. For its activity, there are all components, as well as legislative base in the Country, including Presidential orders and decree of the Cabinet of Ministers. The project has been approved by the Government of Azerbaijan.

The industrial town will present a small complex of buildings and area with a communication system, a management system and social infrastructure which will provide all the conditions to business people to carry out entrepreneurship activity. Thus, the companies working here will be able to use sub-stations, loading and unloading mechanisms, telecommunication, railway, fire, medical and hotel services. It will enable them to avoid extra traveling and infrastructure expenses. This industrial town will become a shopping center entrepreneurs and buyers: it will be possible to acquire all necessity goods and services here.

Small and medium producers, excluding the trade enterprises, will be active in the territory of the industrial town. No privileges are planned for them. The major priority for entrepreneurs active in the industrial town will be their opportunity of using the infrastructure, established by the Government. The businessmen can use the infrastructure, hold exchange of experience and establish cooperation. It ensures from illegal interference unto their activities. The industrial town will play a considerable role in business-incubators, as well as assist in integration and establishment of business ties. Around 72 industrial towns will be established in its territory, whilst the construction work will take 1.5 years.

Together with the local companies, the foreign companies will also be able to be active in the industrial town. Preference will be given to the production of export products.The government will not interfere into prices of goods. Perhaps, favorable conditions will be established for entrepreneurs' activities and the prices will not be high.

Despite the fact that the construction of the industrial city has not commenced in Yeni Yashma, the Azerbaijani companies already need to hold talks regarding the leasing of production areas and offices in the new town. The project to establish a business town will soon be realized and therefore firms wishing to participate may select available areas and create a territory in which to establish production. Possibly in the initial stage, the office and production areas will be provided to business people on preferential terms.

No special benefits and tax privileges will be created for the companies working in the industrial town, but they will have broad opportunities to obtain privileged credits.

The new industrial town Yeni Yashma in Azerbaijan will create new workplaces. According to various assessments, more than 2,000 people will be provided with jobs. In addition to improvement of the social situation of the town, it will significantly decrease the transportation load on the road to the Capital.

Establishing separate industrial towns in Azerbaijan are necessary due to the issue that the tourism is actively developing in the Country and therefore, development of the industry should not adversely affect the inhabitants and nature. The best example is Turkey where the establishment of the industrial towns transformed the Country to be, together with tourism, one of the largest exporters.

At the moment there are 200 industrial towns in Turkey. CIS has set up the application of such models and necessary public budget assignments have been allotted for the establishment of six similar zones in Russia.

Beginning from 1960s Turkey has become demonstrating high growth rate and holding structural changes in the industrialization policy. Efforts put for establishment of industrial zone and small and industrial towns, as well as their spread in the country, gain more and more support. The first industrial zone in Turkey was established at funds taken as loans taken from the World Bank.

This project, developed for over 2 years, is carried out by the Agency for Cooperation and Development of Turkey (TIKA). Introducing the project Hakan Fidan, Head of TIKA, noted that since 1960 Turkey has had an experience in the establishment of industrial towns and his organization is prepared to render assistance in the implementation of the project in future. "At present economic development in Azerbaijan enables to carry out such models for the development of entrepreneurship," the President of TIKA stressed.

Addressing the opening ceremony the Azerbaijani Minister for Economic Development, Heydar Babayev, said that the key objective of Azerbaijani Government in the establishment of the industrial town is to increase the competitiveness of the national economy and its efficient integration into the world economy, provision of dynamic socio-economic development in the long-term prospective through intensifying the development of the non-oil sector.

The project is directed at the implementation of state policy on balanced development of regions of the country, industrial entrepreneurship and its innovative directions. The establishment of the industrial town in Azerbaijan includes several steps, which will be implemented in the Absheron economic zone in line with the State Program on Socio-Economic Development of regions on Azerbaijan in 2004-2008.

In accordance with the initial variant of a feasibility study, developed by UNIDO in 2004, some $28mln is required for the construction of the town. The major part of the construction work will be financed by the Azerbaijani Government. To commence the work, some AZN 8mln has been allocated out of the public budget, which will cover the expenses over the first 6 months. The construction work will take nearly one and a half years.

The participation of the international organizations in the financing of the project is not ruled out as well. The Azerbaijani Ministry of Economic Development has launched talks the international financial organizations to attract them to construction of infrastructure of the industrial town. Minister Heydar Babayev allows the possibility of construction of airports and sea ports here following the expansion of the town.

If the establishment of the first industrial town in Azerbaijan proves to be successful, it will be possible for business towns to be established in the country's regions as well.

They concentrate enterprises of different profile in one place, extend industry to underdeveloped regions, prevent use of agriculture areas for industrial purposes, establish a healthy, cheap, reliable infrastructure and common social facilities, attract entrepreneurs-industrialists to construction of an infrastructure and social facilities. But the main role in their organization is of the Government, which prevents pollution of the environment through common purifying facilities, directs and controls the activities of regional power bodies regarding industrial enterprises. All these factors promote order and discipline in location of industry and its functioning.

The industrial town can gain different forms. For instance, the Saudi Ministry of Trade and Industry has confirmed a project on the establishment of an industrial town which will involve only women. Women town will be built under the Jeddah City and include not only the office не buildings, storages, training centers, but also hospital and school.

At the moment there are 6,000 industrial towns in China. Russia ahs also began the application of such models and targeted funds have been allocated out of the public budget

for the establishment of six similar zones.

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