Will Azerbaijani Tomatoes Penetrate European Market?
2017 July 10 ( Monday ) 10:36:31
Director of the International Trade Center (ITC, Center du commerce international, CCI) Arancha Gonzalez completed her visit to Azerbaijan, during which she studied the export potential of the country and the situation in industry and business, and assessed the measures taken to support entrepreneurship.
The conclusions from the trip of the head of an authoritative organization based on information she received about the Azerbaijani economy do not seem to be so positive. She did not encourage her local partners about their export prospects, reports abc.
According to Gonzalez, today 80% of companies in Azerbaijan belong to small and medium enterprises (SMEs), but they form only 3% of GDP, and only less than 10% of SMEs are engaged in export.
"Why not increase their share in exports to 20% of GDP? Efforts should be aimed at increasing the number of SMEs involved in the export of products. To this end, a joint project Ready for Trade is implemented with the European Union. I met with local producers of nuts, honey, fruits and vegetables," the Director of ITC said.
The hint is clear: guys, you need to do a lot to be allowed into the western market.
Within the framework of this project, an attempt will be made to bring Azerbaijani products to the European market, which was not possible even through the system of trade preferences GPS and GPS +, used by the EU.
It is no secret that the global economic crisis revealed the fragility of the administrative and financial systems of Azerbaijan and the accumulated problems in the social sphere, showing the complete inability of the President's economic team to realize what was happening and adequately react to the processes long before that. The miscalculations of credit institutions in risk management systems have become obvious, and the accumulated bubbles in the financial market have burst.
"Unfortunately, with the diversification of the national economy, the agrarian sector and other non-oil industries our government was very late. When the crisis broke out, it became clear how much the country is dependent on foreign goods, from medicines and textiles to toilet paper. Along with the construction of roads, fashionable hotels and sports complexes, it was necessary to develop light industry, pharmacology and logistics," said Azer Mehdiyev, expert of the Center for Assistance to Economic Initiatives.
Entering the world markets requires clarifying the structure of exports. What goods need to be offered to foreign consumers, what niche of this market is not yet occupied? Starting expansion to the European markets will not be possible yet for certain reasons. First, it is necessary to produce products in accordance with European standards, therefore, it is necessary to conclude agreements, pass certification, etc. Secondly, it is necessary to establish a technological line for the production of competitive products, to really support small and medium-sized enterprises, to improve access of this sector to finance, and to create conditions for their entry into international markets.
The economist Natig Jafarli in an interview with Turan did not hide his skepticism about the country's export prospects. According to him, the only market where our agricultural products are "allowed" is Russia and Kazakhstan. In recent years, there has been an increase in the supply of vegetables and fruits. But this dynamic falls short of the needs of these markets. The potential of the agricultural sector is low. If there were such opportunities, Azerbaijan would increase the export of fruits and vegetables. But that does not happen. Why? This is due to the structural problems of agriculture, which hinder the growth of production. We are talking about a monopoly over the distribution of fertile land, financing farmers and providing them with machinery and fertilizers, bribery at each stage of exporting products, as well as imperfect logistics and delaying customs procedures. While these problems are not resolved, western markets will remain closed for Azerbaijani products.
"Undoubtedly, it is necessary to increase non-raw export, to focus on the world niches, where we can work. This is more difficult than selling oil. Azerbaijan needs to significantly expand the zone of preferential trade relations. Outside the CIS countries, we practically do not have such trading zones. A team of specialists is required who will promote domestic products in world markets, improve the business climate in the country, develop small business and not strangle it, as it is now," Jafarli emphasized. --0-