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Markets Review 

2017 July 10 ( Monday )  11:00:28
Print version
Русский Azərbaycan

Baku / 10.07.17 / Turan: The Ministry of Economy of Azerbaijan held a meeting of companies from the exporters' club with the country's sales representatives abroad. The Deputy Minister of Economy Sahil Babayev said that work is under way to organize export missions abroad. By the end of this year, it is planned to organize missions to Russia, Kazakhstan, Saudi Arabia and Europe. Missions to other countries are also possible.

This meeting was preceded by the visit to Baku of the Director of the International Trade Center (ITC, Center du Commerce International, CCI) Arancha Gonzalez last week. During the visit, she examined the country's export potential, 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.

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 with the European Union, Ready for Trade, is implemented. I met with local producers of nuts, honey, fruits and vegetables," said the Director of ITC.

The meaning of the message is clear: you guys need to develop and support small business, create equal conditions for the participants of this market, and do a lot to let your products go to Europe and beyond.

According to the head of the Center for Assistance to Economic Initiatives Azer Mehdiyev, entering the world markets requires clarifying the structure of exports. What goods need to be offered to foreign consumers and what niche of this market is not yet occupied? It will not be possible to begin expansion to the European markets yet, and there are reasons for that. First, we need to produce goods in accordance with European standards, so we need to conclude agreements, pass certification, etc. Secondly, we need to establish a technological line for the production of competitive products, really support small and medium-sized enterprises, improve access to finance for this sector and 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, Kazakhstan and Africa. It is reported that juices, tea, canned vegetables and dried fruits of Gilan Holding, Azersun Holding, Aznar, Az-Granat and Delta Group, cosmetic products of Gazelli Group, as well as Azerbaijani agricultural products have begun to be sold in the Republic of Djibouti,.

"The names of these companies speak volumes. Holdings, behind which there are high-ranking officials, are involved in the export program. Consequently, in this segment there will be no healthy competition, the monopolists will set their own rules here, while other companies will not be allowed to enter here," Jafarly pointed out.

There is another point. The potential of the agricultural sector in the country is low. If there were such opportunities, Azerbaijan would increase exports of fruits and vegetables. But this is not observed. 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 export production, 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 and 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 to 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 ---