Strengthening stability of joint ventures proposed in Azerbaijan (Exclusive)

Business Materials 7 September 2018 18:19

Baku, Azerbaijan, Sept. 7

By Anvar Mammadov - Trend:

The model of joint business has important advantages for Azerbaijani business, the Chairman of the Center for the Study of Economic Resources of Azerbaijan Ruslan Atakishiyev believes.

He said the importance and necessity of this model can be divided into several ways.

"First, it is affordable financing, in which the investor requires a share from the manufacturer only when a profit is achieved. Secondly, it is the full involvement of the investor in the business, when he does not limit himself to provision of investments, but also helps in the selection of personnel, attracting of necessary technologies and the further development of the enterprise, while sharing also the responsibility for this business", Atakishiyev told Trend Sept. 7.

Atakishiyev noted that the model of joint business has already been applied in Azerbaijan, but the problem is that the parties do not conclude any agreements, but make arrangements only by word of mouth. The expert noted that the conclusion of contracts when creating a joint business will allow for achieving the stability of such enterprises.

"In this model, we propose to oblige the parties to enter into contracts so that no disputes would arise in the future. The conclusion of agreements will also allow one of the parties to sell its share to other shareholder or the new business partner in case of desire of that party to leave business. In this case, the business will not collapse and will continue to exist. This brings us to the question of strengthening the stability of enterprises, reducing the number of liquidated enterprises," he said.

"If we refer to the international experience, we can see that such joint ventures in European countries have been functioning for 100-200 years, turning into large corporations. That is, they maintain continuity for several generations. This model, when legalized, will allow us to achieve the stability of joint ventures in the country," Atakishiyev said.

Touching upon the problems of establishing a joint business in the country, Atakishiyev noted that the main obstacle is the lack of financial literacy of the population and stereotypes.

"Many believe that the creation of cooperatives and other types of joint business means a return to the times of collective and state farms. It is necessary to demonstrate to such entrepreneurs the successful experience of developed countries in this matter. In addition, it is necessary to eliminate the fear of entrepreneurs about the establishment of joint ventures and the stereotypes", Atakishiyev said.

The presentation of this model has been held today.