Modern entrepreneurship development in Azerbaijan

Sustainable development of entrepreneurship activities in Azerbaijan is one of the important components of economic policy. In this direction, the State had introduced comprehensive measures covering the development of relations between the state and entrepreneurs, improving legislation and administrative procedures, removing unlawful interference and artificial obstacles, forming mechanisms of state support to entrepreneurship.

As a result, a stratum of entrepreneurs was formed in Azerbaijan, the role of the private sector in economic development has significantly increased, favorable conditions were created for entrepreneurship, legal rules were liberalized, financial and credit support was improved, the tax burden on employers and illegal interference in their activities were reduced, system for protecting their rights was improved, international relations of business people enhanced, other successes have been achieved.

Meanwhile, sustainable economic development has identified new challenges for business support, in particular, the removal of some existing problems in the business environment. So, at first were eliminated existing multistage procedures of starting a business, since a complex system of permits not only required a long time, but also created in some cases, bureaucratic obstacles.

In order to eliminate these negative cases, ensure intensive development of entrepreneurship and a more favorable business climate in the country, the Cabinet of Ministers is in charge of preparing and submitting to the President the regulations for inspections to protect consumers' rights. Last week the President of Azerbaijan Ilham Aliyev issued a decree on some measures to promote inspections of businesses and protect the rights of consumers."

Warning

At a conference on the results of the first year of implementation of the state program on social-economic development 2009-2013, which was held on March 12, Azerbaijani President Ilham Aliyev said that local authorities should provide assistance to entrepreneurs and should not interfere in their activities.

'State institutions must suspend baseless inspections that are unnecessary, large activities have been conducted in Azerbaijan in the sphere of economic reform, we managed to achieve transparency," said Aliyev at the conference.

The President stressed that "transparency assumes great importance for economic development". "We already use the single window system in different spheres. This is a very important issue to facilitate the activities of entrepreneurs and prevent baseless claims. In this case, baseless interference, inspections have no basis, this must be stopped," said the President of the country.

In order to ensure better development of business, Ilham Aliyev mentioned the need to strengthen business and eliminate artificial barriers, including baseless inspections by the relevant authorities.

Hopes

Business entities have high expectations for the decree signed by the President of Azerbaijan Ilham Aliyev, considering that the situation in the consumer market will change due to this. According to the chairman of the Union of Free Consumers of Azerbaijan, Eyyub Huseynov, it will have an impact also on the prices - the prices could fall by 20 percent.

Check-lists inspection

Under decrees on promoting state control over the production, services, finance and credit activities, dated July 17, 1996 and on improvement of system of state control and elimination of artificial barriers in business dated January 7, 1999, activities have already been implemented in the country, which resulted in eliminating the repeating, parallel and unnecessary inspection in the field of economy, negatively influencing the development of market relations.

The presidential decree on prevention of cases hindering the development of entrepreneurship dated September 28, 2002 has an exclusive importance in protecting the rights of entrepreneurs in the country. The provisions of the decree abolished various agencies carrying out monitoring and inspections, prohibited the law-enforcement agencies to intervene in the affairs of the private sector, established operational links with entrepreneurs, increased efficiency of the control books.

Establishig the Business Council under the President of Azerbaijan has allowed the private sector to establish close contacts with the state, conditions were created for a periodic review of existing problems and taking measures to address them.

The international organizations continue to insist on the need to implement serious reforms in the system of inspections in order to develop non-oil sector through support to small and medium businesses. The International Finance Corporation (IFC) project to improve the business climate in Azerbaijan has revealed that over the past five or six years, serious reforms were not implemented in the system of inspections of businesses in Azerbaijan. The essence of the reform should be to ensure transparency of inspections and improve coordination at all ministries involved in inspections, and eliminate duplication.

"In many countries, inspections are carried out by single organizations in order to improve the situation, but it's not the best solution for the CIS countries. In order to ensure transparency in the inspection, the control authorities must be provided with check-lists, which will include all requirements," the head of IFC Project Boris Divjak said.

The check-list is a document which allows to obtain detailed information about the entity, increase the legal literacy of entrepreneurs, improve the system of state control and simplify the procedures for conducting inspections.

IFC also suggests the government to establish a single portal, which will combine all the government agencies coordinating registration of business, in order to obtain the necessary information from this portal. The second recommendation is to create a single register of licenses and permits.

However, the Corporation believes that such reforms can not be accomplished in a short period.

Goals

On the backdrop of efforts taken by the State to support business development, business entities must ensure competitive products to export them to new markets, including the European markets.

In this regard, the Ministry of Economic Development of Azerbaijan expressed its readiness to assist Azerbaijani companies engaged in export of products. To avoid problems with the export and sale of the goods, from 2010 the Ministry of Economic Development introduced a system of informing entrepreneurs about trade in other countries.

Since January 2009, Azerbaijan has gained an access to the system of preferences EU GSP+. Joining the program allows the Azerbaijani businessmen to export goods to the EU countries on preferential terms, which strengthens country's export capacity and significantly in the sphere of diversification of export structure.

According to European experts, Azerbaijan has a high potential to export, particularly agricultural products. For these goods, the EU provides simplified access to the markets of 27 EU countries. If the usual suppliers from the WTO member countries pay customs duty amounting to 15-20 percent, the Azerbaijani producers are practically exempt from paying these customs duties, that is, they pay a zero rate or the amount of the fee makes up five percent.

Today, the main export markets for Azerbaijan are the CIS countries such as Russia, Kazakhstan, Ukraine, but Azerbaijani entrepreneurs also supply some livestock products, fruits, processed fruits and vegetables to the EU.

Today, the export of Azerbaijani goods to EU countries is 0.7 percent in total exports of goods to these countries.

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