Weekly economic review (10.05- 15.05.2010)

Analysis Materials 19 May 2010 12:06 (UTC +04:00)

EU adopted directives on negotiations for association agreements with South Caucasus countries. In 2009 Azerbaijan made some progress in the implementation of the European Neighbourhood Policy (ENP) Action Plan, notably in areas related to economic and social governance. The Commission published on 12 May 2010 the so-called neighbourhood package, consisting of an overall assessment of five years of implementation of the European Neighbourhood Policy (ENP), 12 country reports on developments in 2009, including one on Azerbaijan.

"It fared comparatively well during the year despite the global financial crisis, which allowed the government to increase social spending and capital investment," the report says.

The report says that however, only limited progress was made as regards the accession to the World Trade Organisation (WTO). There was no substantial progress with respect to the protection of human rights and fundamental freedoms.

"In 2010 further efforts are needed in the field of political dialogue and reforms, including justice sector and the strengthening of the rule of law, notably the independence of judiciary," the EU report says.

Negotiating directives for a future Association Agreement were adopted by the EU on 10 May 2010.

Signing such an agreement with Europe will become for Azerbaijan, Georgia and Armenia means of establishing free trade and movement of people.

Strengthening EU cooperation with countries, interested in signing an agreement on free trade and visa facilitation, which is part of the association agreement would enable free access to European markets. According to the requirements of the European Union, to participate in the zone, the country must be a member of the WTO. Azerbaijan is still an observer country in the WTO.

Meanwhile, it is expected that the European Commission will assist Azerbaijan in developing institutional and human capacities to negotiate and implement agreements. In addition, the existing institutions involved in this process will be strengthened. Assistance will also cover the implementation of the country's national action plan for the European Neighbourhood Policy (ENP) and the Eastern Partnership (EaP).

The European Commission will provide €122.5 million to Azerbaijan for the implementation of the Indicative Programme in 2011-2013 under the ENP. Technical assistance for the implementation of activities under the ENP for 2007-2010 stands at €88 million.