Developments in Georgia to Reduce Potential Investments in Azerbaijan: Baker& McKenzie

Business Materials 4 September 2008 13:41 (UTC +04:00)

Azerbaijan, Baku, 4 September / Trend corr. I.Khalilova / Developments in Georgia will reduce potential investments in Azerbaijan, Daniel Matthew, head of Baker& McKenzie Baku Office said on 4 September.

"Stability in a region is a main factor for investment influx and if stability is damaged, investments will reduce, he believes. The Georgian-Ossetia conflict influenced negatively on Azerbaijan.

Baker& McKenzie co functions in Azerbaijan for ten years and during this period, business climate in the country was improved and great investment influx testifies for it, Matthew said. Meanwhile, there are problems with registration of private property and with mortgage, because banks, particularly, issue loans for houses.

According to representative of Baker& McKenzie, it is important to solve not only these problems, but also to eliminate shortages in legislative acts for continuous development.

"The Azerbaijani Government should pay attention to diversification of economy, development of banking and insurance fields, as well as mechanical engineering," Matthew said.

Anne Walker, the editor-in-chief of famous The Economist magazine believes that it is necessary for Azerbaijan to liberalize banking and insurance markets within the framework of joining the World Trade Organization (WTO).

She believes that there are both interior and external risks to develop business in Azerbaijan. In this connection, Walker named growth rates of economy, inflation, influence of the Georgian and Ossetia conflict, as well as cut of world oil prices, which lead to cut in oil profits in the state budget of the country and this fact, in its turn, increases risk.

Positive milestone is that the government directs oil incomes to develop infrastructure.

The first business meeting was held in Baku on 4 September for dialogue of business organizations with the Azerbaijani Government. Representatives of 69 foreign companies from the United States, Turkey and the United Kingdom participated in this meeting.

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