Small and medium businesses welcomed in Azerbaijan

By AzerNews

Azerbaijan's industry sector is open for small and medium entrepreneurs and the Ministries of Industry and Energy and Economic Development as well as other government agencies are ready to render assistance in this regard, Industry and Energy Minister Natig Aliyev told media.

Aliyev said that for over 20 years, Azerbaijan has been pursuing a policy of attracting foreign investors, especially influential and well-known ones with good financial and technical capabilities.

"The country's goal is currently the development of the non-oil sector," the minister said. "This is not an easy task because, as you know, it is necessary to attract hefty investments. Today, the state is investing a large amount of assets in this field."

Azerbaijan's government expects real growth of investments in the country in the next three years.

Economic Development Minister Shahin Mustafayev earlier said investments in the Azerbaijani economy from all sources will amount to 71.8 billion manats ($91.4 bln) in 2013-2016.

Foreign capital attracted to the Azerbaijani economy in 2012 amounted to $10.59 billion, the Central Bank of Azerbaijan (CBA) said earlier. The country saw a 30.6 percent increase in the volume of foreign capital.

The total amount of foreign capital in the country in the form of direct investments rose by 19 percent to $5.3 billion. The share of the oil and gas sector stood at 81.1 percent.

In the backdrop of the post-crisis period, Azerbaijan's non-oil sector managed to maintain dynamic development in 2012. The country recorded a 9.7 percent growth rate in the non-oil sector and its share in GDP reached 52.7 percent.

This is the most important indicator posted in recent years, as the government's long-term goal is to diversify the domestic economy and to minimize its dependence on oil and gas in the future. Currently, revenues from oil and gas resources of the country are directed to the development of the non-oil sector of the economy - the creation of industrial production, the increase in GDP per capita, etc.

Touching on industrialization, Aliyev said there is no need to hurry in dealing with this issue.

Citing the process of industrialization in the Soviet Union as an example, he said that at the time the process took decades resulting in the establishment of large industrial enterprises and the country's evolving from an agricultural to an industrial one.

"I believe that there is no need to hurry and if Azerbaijan needs the industrialization in the sense you are talking about, it will necessarily take place," Aliyev said.

In 2012, the volume of industrial production in Azerbaijan amounted to 33.929 billion manats, or 2.3 percent less than in 2011.

According to the State Statistics Committee, in the private sector, the volume of industrial production in comparison with the year earlier fell by 2.5 percent, making up 81 percent of total industrial production. 91.8 percent of the volume accounts for production of industrial goods, and 8.2 percent - for industrial services.

Production in the non-oil industrial sector grew 7.8 percent, while in the oil sector it fell by 4.2 percent.

Industrial parks

Azerbaijan will apply incentives for industrial parks, the presidential decree 'On model policy on industrial parks' says.

Under the decree, tax and customs incentives can be applied in the activity of industrial parks; the decree envisions measures on ensuring the parks' infrastructure, defining the land lease at minimum level, granting soft loans, simplifying administrative procedures, arranging services for effectively doing business and applying incentives in the sale of heat and electricity, gas, water, sewage disposal and collection of waste.

The document also covers the objectives and procedures for the establishment of industrial parks, the organization of their work, their management and development, as well as an authorized body, a management company, the operators and residents of industrial parks. Rules are defined on the use of the industrial park's land, especially technical regulation within the parks, planning and construction activity in the industrial parks, and the elimination of such parks.

According to the regulations, the establishment of industrial parks and their operation may be financed from the state budget, revenues of the managing organization, as well as other sources.

The use of the industrial park's land is based on a lease agreement concluded between the resident of the park and the managing company.

All types of permits for industrial parks are provided by their operators on the basis of the "one-stop shop" principle.

The decree also stipulates the creation of joint industrial parks. The cost of running such parks and their management are determined in accordance with the interests of the state, a municipality or a special owner.

The industrial park is liquidated if no contract is concluded on the implementation of entrepreneurial activity on its territory within five years after the decision on its establishment or if the previous contracts have expired.