Last week review (Oct.8-12)
Azerbaijani Central Bank: Banks have launched talks on consolidation
Azerbaijani banks have launched negotiations on consolidation. According to Central Bank administration decree as of July 25 the minimal amount of acting banks' associated capital as well as authorized capital of newly established banks has been increased from 10 million manat ($12 million ) to 50 million manat ($ 63.7 million). The new requirement to capitalization of acting banks will come into force on January 1 2014. In the opinion of Central Bank representative, international financial corporations will take active part in possible consolidation process of Azerbaijani banks. According to the head of EBRD mission in Azerbaijan Neal Mckain, EBRD is planning to take active part in consolidation and acquisition processes, expected in Azerbaijan's bank market in 2013. In his words, the director on cooperation with financial institutions in Caucasus, Mongolia and Central Asia Mike Tailor will arrive to Baku, in this regard.
Another railway line can connect Azerbaijan and Turkey
The issue of building a new Kars-Nakhchivan railway retains relevance. It will provide a way to Turkey by rail, both for passengers and cargo. The Nakhchivan Autonomous Republic is under siege because of the occupation of 20 per cent of Azerbaijani lands. The communication with the NAR is either by air, or by road through Iran. The creation of the new railway is the subject of negotiations between the Azerbaijani and Turkish sides. Currently, work is underway on the construction of the Baku-Tbilisi-Kars railway which is intended to unite the railway systems of Azerbaijan, Georgia and Turkey. The route will be launched at the end of 2012 and the railway fully commissioned in 2013. It is planned to construct a new 105-kilometre branch railroad as part of the Baku-Tbilisi-Kars project. In addition, the section of the Akhalkalaki-Tbilisi-Marabda railway will be reconstructed in Georgia which will increase its capacity to 15 million tons of cargo per year. It is planned to build a base in Akhalkalaki for the transition of trains from the existing train tracks in Georgia to the European one. Peak capacity of the corridor will be 17 million tons of cargo. This figure will be at the level of one million passengers and 6.5 million tons of cargo initially.
Azerbaijani experts prepare report on Iranian ship colliding with base on Caspian Sea
Iranian vessel Parmis, colliding with non operating pier near the Chilov Island in the Azerbaijani sector of the Caspian Sea, has not received serious damages, deputy head of the State Maritime Administration of Azerbaijan Ehtiram Rahimov told Trend.
He noted that there were no injured as a result of the accident, which occurred last Friday.
Currently the cause of the accident is investigated, but experts of State Oil Company of Azerbaijan (SOCAR) assessed the grounds and found no serious damage.
Now the ship is in Baku, where the specialists of the Administration carry out the inspection and prepare the report.
Changes expected in credit register system under Central Bank of Azerbaijan
The Central Credit Register (CCR) plans to improve credit reports in connection with the way payments in for loans will be reflected, CCR service head Elchin Habibov told Trend. He noted that a special new model showing payment of the loan by months will be launched on the basis of data provided by credit institutions. "It will enable credit institutions to better assess the attitude of borrower to the payment of a loan during the last 24 months, as well as provide better terms to borrowers with excellent histories of credit payments," Habibov said. The possibility of reducing the cost of information request from the CCR is also considered among the planned changes. "The issue today is under discussion, and it is planned to reduce prices to request information from the credit institutions," he said. CCR began operating in March 2005. Today, the CCR focused on collecting information about the credits issued by banks and non-banking credit organizations.
Initial mortgage payments to be guaranteed in Azerbaijan
The insurance fund will guarantee mortgage down payments in Azerbaijan, Central Bank General Director Rashad Orujov told Trend.
"A special fund is created to provide guarantees for initial payment on mortgages. So, young family, which can not accumulate the down payment, get a guarantee of a special fund, and thus has an opportunity to buy an apartment without a down payment. This mechanism is being discussed," Orujov said. He noted that, the fund is likely to be established in Azerbaijan Mortgage Fund (AMF). "It can be created under the AMF, but there are different options for its institutional placement" Orujov said.
Communication and IT Ministry accelerates operations to form e-government in Azerbaijan
The Communications and IT Ministry accelerates the "e-government" formation in Azerbaijan. According to the ministry, the issue was discussed within the board meeting held at the Ministry with the participation of departments. Azerbaijani Communication and IT Minister Ali Abbasov instructed to accelerate the work within simplifying the access to the "e-government" portal, the process of getting the electronic digital signature by citizens and removing the problems with telecommunication, postal and TV and radio infrastructure to render quality services to the population. According to the ministry, around 28 organisations received 2078 e-digital signatures since the commissioning of the issue centre.
Currently, around 152 of the existing 395 electronic services belonging to the Azerbaijani state agencies were integrated into the electronic government portal which acts as a gateway to ensure information exchange between state agencies.
The functions of the portal are not limited to a specific number of services. The number of e-services presented on the portal can reach several thousand units.
Currently, some state agency electronic services are rendered via the 'single window' principle.
The e-government portal is a key tool supporting the work with the public and enterprises in the public and private sectors.
The portal is intended to reduce the number of the citizens' documents because different agencies can now communicate with each other electronically. The e-digital signature is required for using e-services.
SOCAR moves to new standards to combat corruption
New standards in combating corruption will be used in SOCAR to prepare for its transition to international standards from January 1, 2013. According to the report, nine new standards were prepared in the field "Combating corruption and improving transparency" in the form of a collection. SOCAR includes the Azneft production association (the companies producing oil and gas on and offshore), the Azerkimya industrial association (chemical enterprises) and Azerigaz industrial association (gas distribution). SOCAR is the only producer of oil products in the country (it has two refineries on its balance sheet) and also owns petrol stations in Azerbaijan, Georgia, Ukraine, Romania and Switzerland. SOCAR is co-owner of the largest Turkish petrochemical complex Petkim.
Azerbaijan to join International Organization of Vine and Wine
The Agriculture Minister Ismet Abbasov and director of International Vine and Wine organization Federico Castelucci have discussed the prospects of cooperation development in wine and vine field within a meeting, the ministry report said on Monday. The minister noted that the country government has approved the proposal of Agriculture Ministry to join the International organization of Vine and Wine and internal procedures are currently being carried out in this direction. According to the minister, the activity in winemaking and viticulture field in Azerbaijan is going to be implemented in accordance with world standards following joining the organization in the framework of cooperation development between Azerbaijan and the organization. Castelluci noted that in its turn the organization will assist Azerbaijan in science and methodology of winemaking and viticulture, as well as in quality increase of grape varieties in order to develop the sector.
IFC announces corporate governance assessing methodology in Azerbaijani companies
Corporate governance is the most important aspect in the private sector's development, IFC Program for Corporate Governance in Europe and Central Asia Manager Oliver Orton said at an event in Baku. "The IFC activity in Azerbaijan has been focused on diversifying the country's economy, in particular on sustainable economic growth due to the non-oil sector," he said. "Today, we are interested in creating a corporate governance structure, as well as the development of corporate governance services at the local market." SECO Deputy Regional Director for the South Caucasus Mathias Feldman said that Switzerland in collaboration with IFC have been financing a project on corporate governance since 2005. The certain results have been achieved.
"We believe that the high level of corporate governance has a positive effect on the development of the private sector and financial markets and promotes sustainable economic growth in the country," he said. He added that financing this project and choosing IFC as its partner mean improvement in the conditions of the Azerbaijani investment structure for Switzerland. Head of corporate governance at the Economic Development Ministry Anar Hajizade said the assessment of corporate governance by the companies will increase credibility and trust toward the companies and help attract capital and business partners.
Azerbaijan, Kazakhstan, Georgia, Turkey sign transport agreement
Azerbaijan, Kazakhstan, Georgia and Turkey will sign two documents within the Silk Wind project, TRACECA national secretary from Azerbaijan Akif Mustafayev reported to Trend on Tuesday. The purpose of Silk Wind project is establishment of the high speed block train route, multimodal transport with advanced system of preliminary information exchange to involve freights transport to Europe Caucasus Asia corridors. According to Mustafayev, the first document is a memorandum of mutual understanding between transport ministries of 4 countries, an agreement on development of multimodal transportations. These documents are currently being developed, in particular, internally coordinated. "Silk Wind project is practically an addition to Baku Tbilisi Kars railway , construction of which is in process," Mustafayev added. In Mustafayev's opinion, memorandum of mutual understanding between ministries of four countries could be signed early next year, the agreement on development of multimodal transportations - during next intergovernmental TRACECA conference, which will take place in Dushanbe in May 2013. TRACECA is an international transport cooperation program between the EU and its Partner countries in Eastern Europe, South Caucasus and Central Asia. It has a permanent Secretariat in Baku, Azerbaijan. Currently, TRACECA member states are Azerbaijan, Bulgaria, Georgia, Kazakhstan, Kyrgyzstan, Armenia, Moldova, Romania, Tajikistan, Turkmenistan, Turkey, Ukraine and Iran
Azerbaijani parliament approves candidacy of Accounting Chamber auditor
The Azerbaijani parliament has approved Fazil Ibrahimov's candidacy as an auditor of the Accounting Chamber. The decision was taken at a meeting of the parliamentary committee on economic policy on Tuesday. Chairman Ziyad Samadzade spoke at the meeting. He said that the Chamber has recently intensified its activity. "Ibrahimov worked at the Ministry of Finance for a long time," he said. "He has been an employee of the Accounting Chamber since 2005. He made an important contribution to this activity." Ibrahimov's candidacy was unanimously adopted. An auditor is chosen for a period of seven years.
Regional projects - priority of relations between Georgia and Azerbaijan
Regional projects are priority of relations between Georgia and Azerbaijan, and they will further develop. Georgian Ambassador to Azerbaijan Teimuraz Sharashenidze made this statement at a press conference on the results of the Georgian parliamentary elections on Tuesday. "Azerbaijani and Georgian sides have completed their parts of the construction within one of these projects - Baku-Tbilisi-Kars railway, and now the construction should be completed in Turkey," he said. He said there is difficult landscape and relief for construction in Turkey and it will take some time for the country to complete the work. This project is of great importance for the region, "no wonder it is called the Project of The Century", Sharashenidze said. Currently, work is underway on the construction of the Baku-Tbilisi-Kars railway which is designed to unite the railway systems of Azerbaijan, Georgia and Turkey. The route will be launched by late 2012 and the railway will be fully commissioned in 2013. It is planned to construct a new 105-kilometre branch railroad as part of the Baku-Tbilisi-Kars project. In addition, the section of the Akhalkalaki-Tbilisi-Marabda railway will be reconstructed in Georgia which will increase its capacity to 15 million tons of cargo per year. It is planned to build a base in Akhalkalaki for the transition of trains from the existing train tracks in Georgia to the European one. Peak capacity of the corridor will be 17 million tons of cargo. This figure will be at the level of one million passengers and 6.5 million tons of cargo initially.
Azerbaijani Central Bank predicts improved demand in card payment market growth in 2013
The Azerbaijani Central Bank (CBA) has forecast an increase in the demand in the card payment market in the country in 2013, CBA Director General Rashad Orujov told Trend on Tuesday. "The pace of the market growth is very good," he said. "The dynamics are very good in the quantity and quality of services currently available. The situation will be even better in 2013." He said that at present the banks render new products and services on credit cards. "New projects are being implemented," he said. "The banks and customers are showing great interest. The prospects of the market are great. At present, the opportunities of people in terms of their income allow them to actively use these products." He said that using credit cards will be expanded after the banks render new products, while today most of the market falls to debit cards. According to the CBA, the number of payment cards in Azerbaijan fell in July by 0.37 per cent - up to 4.808 million units. The number increased by 8.56 per cent compared to the same period of 2011. The total turnover on payment cards through ATMs and POS-terminals in July totalled 811 million manat, and the total number of operations - 5.018 million units. As of August 1, 2012, roughly 2195 ATMs operated in the country, including 1225 ATMs in Baku alone with 970 in other cities and regions. The total number increased by 193 units, or 9.64 per cent per year. As of August 1, 2012, the number of POS-terminals totalled 36,523 units of which 33,340 are in Baku and 3183 units in other cities and regions. Their number has increased by 25,251 units, or 3.24 times since July 2011.
Central Bank: E-services introduced by Azerbaijani banks must be accompanied by qualitative risk management
Many Azerbaijani banks have started implementing projects to automate their mobile-banking and Internet banking services, Azerbaijani Central Bank (CBA) General Director Rashad Orujov told Trend today. "The banking sector has always been a leader in implementing the e-services," he said. "It is time now when banks consider this issue more thoroughly." At the same time, the CBA main requirement is the parallel use of appropriate technologies of risk management. "While rendering these services, it is necessary to regulate the risks that may arise qualitatively," he said. "This is our main requirement for the services to be supported by appropriate technologies of risk management, human resource training. At present, these services will be introduced even faster. The interest in this services is huge." He said that expanding the range of electronic services rendered by the banks make the consumers' life and the banks' activity easier. "This will enable the banks to render new services to diversify their services," he said. "This includes very important economic benefits for the banks - reducing the cost of rendering these services, the lack of a necessity to create a large number of service points in the capital and regions of the country. There is progress. We expect that the results in 2013 will be better than this year."
Azerbaijani Central Bank stresses downward trend in bad assets
The Azerbaijani Central Bank has stressed the downward trend in the share of bad assets in banks operating in the country. "We do not see the growth of bad assets in the banks," CBA director general Rashad Orujov said. "Their share is at a moderate level. We think that at present, the banks resolved this problem. The stabilization is underway. We see a downward trend in the share of bad assets." He said that the banks are now doing their best to resolve the issue. "Some time is required to resolve these problems," he said. "The administrative procedures - the courts, the removal of deposits, their implementation take some time. The situation is stabilizing. We do not see disturbing situations." He added that the downward trend will continue in 2013. "This trend will continue in 2013 as the general background and the economic situation are very good," he said. "Economic growth is being ensured, mainly due to the non-oil sector, which is very important. Our banks finance and maintain the non-oil sector, so the background is very positive."
Deputy Minister: First Azerbaijani telecommunications satellite to be launched in January
The first Azerbaijani telecommunications satellite Azerspace to be put into orbit is expected to be launched in January 2013, Azerbaijani Deputy Communications and IT Minister Iltimas Mammadov said on Tuesday. He said the satellite is on schedule and at the testing phase. The Azerspace satellite payload being built on the STAR-2 platform consists of 36 transponders (24 C-band transponders and 12 Ku-band transponders). The frequency of each transponder is 36 MHz. The satellite exploitation term in orbit will last up to 15 years. The satellite which will be launched into a geostationary orbit 46 degrees east longitude is being leased from the Malaysian company Measat Satellite Systems, owned by the Malaysian government. Azerspace's service area will include the countries of Eastern Europe, Caucasus, Central Asia and North Africa. Azerbaijan's telecommunication satellite Azerspace is designed to render digital broadcasting services, Internet access and data transmission to create multiservice networks VSAT and governmental communication.
Azerbaijan to prepare e-digital signature issuance mobile platform
The Azerbaijani Communications and IT Ministry is working to develop a platform of issuing e-digital signatures by using mobile technology, Azerbaijani deputy communications and IT minister Iltimas Mammadov said today. He said that the new platform will be put into operation by late 2012. Besides simplifying the e-digital signature issue procedures, it will also increase the number of users of the electronic government's portal. According to the ministry, around 28 organisations received 2078 e-digital signatures since the commissioning of the issue centre. Currently, around 152 of the existing 395 electronic services belonging to the Azerbaijani state agencies were integrated into the electronic government portal which acts as a gateway to ensure information exchange between state agencies.
Azerbaijani President receives WB Regional Director for South Caucasus
President of Azerbaijan Ilham Aliyev has today received World Bank Regional Director for the South Caucasus Henry Kerali. During the meeting, the sides praised the relations between Azerbaijan and the World Bank, saying they have been developing throughout their 20-years long history. They praised the potential for expansion of cooperation between the country and the organization. Henry Kerali said World Bank was interested in deepening cooperation with Azerbaijan. The sides praised Azerbaijan's economic achievements, and also stressed the importance of continuing reforms and cooperation in creating infrastructure, ensuring supply of renewable energy and drinking water, using the Caspian water for irrigation, creating high technologies based agricultural businesses, supporting local entrepreneurship, and diversifying economy.
Azerbaijan, Hungary sign protocol following intergovernmental commission's session Azerbaijan and Hungary signed a protocol following the third session of the intergovernmental commission on economic cooperation, the Azerbaijani Ministry of Economic Development said.
The document was signed by co-chairmen of the intergovernmental commission - Azerbaijani Minister of Economic Development Shahin Mustafayev and Hungarian State Secretary Peter Szijjarto. The agreement on cooperation in the fields of education, science and culture was signed during the meeting. The sides have held discussions in the fields of industry, agriculture, construction, transport, mutual investment, information and communication technologies, trade, science, education, tourism, culture and environment. Mustafayev said that the relations in economic and cultural fields between the two countries are developing successfully. "At present, a strong legal basis has been created for cooperation between Azerbaijan and Hungary," Mustafayev said. "The two countries signed some 30 documents on various areas of cooperation." Szijjarto said that Hungary attaches great importance to the development of relations with Azerbaijan and is interested in expanding the cooperation with it.
Azerbaijan, Uzbekistan to expand cooperation in economic area
Azerbaijani Economic Development Minister Shahin Mustafayev and Uzbek Deputy Prime Minister Ulugbek Rozukulov have discussed expanding bilateral cooperation between the two countries in the economic sphere. A meeting was held with the Azerbaijani economic development minister during Uzbek Deputy Prime Minister Ulugbek Rozukulov's business visit to Baku on Thursday. They have discussed issues of bilateral cooperation between the two countries in the economic sector, including the development of relations between Azerbaijani and Uzbek entrepreneurs. While stressing the importance of relations in this area, Mustafayev said that at present, Azerbaijan's economic development is stable. There is a favourable investment situation in the country. Rozukulov said that the two countries have great potential to develop economic relations.
October 10 Azerbaijani President chairs Cabinet meeting to discuss results of socio-economic development in nine months of 2012
President of Azerbaijan Ilham Aliyev has today presided over a meeting of the Cabinet of Ministers to discuss the results of the country`s socio-economic development in nine months of 2012, and outline further priorities.
President Ilham Aliyev said Azerbaijan`s economy grew 1.1 per cent in nine months of the year, adding the non-oil sector increased 10.3 per cent.
Solar battery plant in Azerbaijan is ready for reaching full capacity
The photovoltaic module (solar battery) production at a plant in Sumgait gradually reaches the production capacity, a source on the energy market told Trend. The source said that at present, the plant operates in one or two shifts. After staff training and establishing the production, the plant will move to three-shift operation. "The necessary personnel are required to pass to work at full capacity," the source said. "They are being trained now." The total annual production capacity of the plant is 120,000 panels with a total capacity of 30 megawatts. It is also planned to produce solar batteries at the Sumgayit industrial park in the future.
October 11 President Ilham Aliyev inspects redevelopment work at National Flag Square and adjacent area
Azerbaijani President Ilham Aliyev inspected redevelopment work at the National Flag Square and adjacent area on thursday. The Head of State was informed that work continued to ensure all necessary conditions at the Baku boulevard`s extended section. The President inspected redevelopment work at the boulevard`s extended part.
Azerbaijan, Uzbekistan sign bilateral documents
After the conclusion of talks between presidents Ilham Aliyev of Azerbaijan and Islam Karimov of Uzbekistan on Friday, the ceremony of signing Azerbaijan-Uzbekistan documents ceremony took place. The joint declaration of presidents was signed by Azerbaijani president Ilham Aliyev and Uzbek president Islam Karimov. Foreign ministers Elmar Mammadyarov of Azerbaijan and Abdulaziz Kamilov of Uzbekistan signed the "Cooperation Program between the Ministry of Foreign Affairs of the Republic of Azerbaijan and Ministry of Foreign Affairs of the Republic of Uzbekistan for 2013-2015 years".
Also, the "Plan of events on implementation of the Cooperation Program between the Government of the Republic of Azerbaijan and Government of the Republic of Uzbekistan for 2012-2015 years" has been signed by Azerbaijan's Deputy Prime Minister Yagub Eyyubov and Deputy Prime Minister, Minister of Finance of Uzbekistan Rustam Azimov.