...

IFC to announce recommendations on reforms in system of issuing permissions in Azerbaijan

Business Materials 12 August 2009 15:13 (UTC +04:00)

Azerbaijan, Baku, August 13/ Trend , I.Khalilova /

On August 14, International Finance Corporation (IFC) is planning to make a presentation on the reforms in the system of issuing permissions in Azerbaijan, IFC AzBEE project in Azerbaijan said.

"The International Finance Corporation already held monitoring on business. Monitoring was conducted among small and medium entrepreneurship of Azerbaijan. According to monitoring, 63 percent of respondents consider licensing procedures as difficult," report of Azerbaijani project on business improvement (AzBEE) published on June 27 said.  

IFC project launched research of Azerbaijani business sphere late 2007. Poll was conducted among 1,766 respondents, 873 - individual entrepreneurs, 893 - legal entities.

Poll demonstrated that expenses for individual entrepreneurs hit 276 manat ($340) to get license in Azerbaijan. But expenses for small and medium enterprises hit 564 manat ($696). These calculations were made given official and unofficial payments on the basis of poll conducted among local companies. Unofficial payments create certain problems for entrepreneurs launching activity.    

Other factor of licensing raising price is that certain kinds of license are given for short term. According to licensing procedures, licensees are given for 5 years, for production of strong drinks and ethyl alcohol - 3 years but for their import - 1 year.    

Individual entrepreneurs, small and medium enterprises lose 1 percent of annual profit while getting license, IFC said.

Moreover, an entrepreneur must get three permissions to launch business. Individual entrepreneurs waste 136 manat ($167) but small and medium enterprises - 250 manat ($308) to get permission.  

According to calculations conducted as a result of poll, private sector wastes 35 million manat ($43.2) for direct, indirect and alternative expenses to get necessary permissions.

"Reduction of permissions and expenses for one/third will allow private sector economizing 11.6 million manat ($14.3 million), the report said. The government will economize 5 million manat ($6.17 million) by reducing man power connected with granting of license." 

IFC recommends the government to reduce number of permissions and limit coverage sphere within improvement of permissions and licensing system. It is possible by the governmental forming full list of permissions; simplifying process of permission granting (it is suggested adopting legislative act, introducing principle of self-certification); prolongation of term (reduce expenses). The corporation also suggested introducing single window system to give certain kinds of permissions. It is acceptable for construction sector requiring getting of several permissions.

United register of permissions is planned to draw up by late 2009.

Project is implemented together with BP Company and Switzerland's state secretariat for economic affairs (Seco). Seco granted the government grant in the amount of $4.3 million but BP - $0.456 million to improve business in Azerbaijan.

Program covers 5 years.

Official rate on August 12 is 0.8043 AZN/USD.

Do you have any feedback? Contact our journalist at [email protected]

Latest

Latest