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Economical news
Bulletine Economics 

2017 October 09 ( Monday )  17:00:52
Print version
Русский Azərbaycan


Creation of GUAM free economic zone is unlikely - expert

Baku / 09.10.17 / Turan: At a meeting of GUAM foreign ministers last week, many issues were discussed in Tbilisi, including frozen conflicts in the member countries. However, the greatest interest was caused by the statement of Georgian Foreign Minister Mikheil Janelidze that documents are being prepared for the creation of a free economic zone within the framework of GUAM. Janelidze added that by the end of the year the first results are expected.

GUAM - Organization for Democracy and Economic Development was established by the four countries Georgia, Ukraine, Azerbaijan and Moldova in 1997. Since the establishment of the organization, the Russian media have more than once called GUAM an anti-Russian bloc, or "an organization of orange nations", behind which the United States stands. Opinions were expressed that the direct goal of the union was the weakening of the economic, primarily energy, dependence of the states that entered it from Russia and the development of transit of energy carriers along the route Asia (Caspian) - Caucasus-Europe, bypassing the territory of Russia. Therefore, it is quite possible that Russia will unambiguously accept the creation of a free economic zone by GUAM members.

Azerbaijan's entry into this zone can also "prick" the northern neighbor, because Azerbaijan refused to join the EEU - the Eurasian Economic Union, created in 2014 on the initiative of Russia. This union includes Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan. Minister of Economy and Industry of Azerbaijan Shahin Mustafayev argued that the country does not want to join the Unified Energy System by the fact that the Eurasian Economic Union and the European Union are projects that have not only economic components, but also political underpinnings.

What benefits can the free economy of the GUAM bring to the Azerbaijani economy? How will the creation of such a zone affect the Russian-Azerbaijani relations?

According to the head of the Center for Strategic Studies "Atlas" Elkhan Shakhinoglu, the creation of a free economic zone by the GUAM member countries is only an intention, which will not necessarily be realized: "If the foreign ministers make proposals, it is not necessary that all of them will be realized. At the same meeting, the Ministry of Foreign Affairs of Azerbaijan introduced a proposal to hold sports competitions in the framework of GUAM. This is just a proposal to be discussed. The same applies to the proposal for a free economic zone. "

"Personally, I consider Moldova to be a weak link among the member countries of the organization. President of this country Igor Dodon is pursuing a pro-Russian foreign policy. True, the Prime Minister and the Parliament are pro-Western and, possibly, prefer cooperation with GUAM. However, so far the exact position of Moldova is unknown. Thus, there is uncertainty in the relations between the four member countries of the organization.

Azerbaijan and Georgia are strategic partners. It is possible that the free economic zone will begin to operate within the framework of these two countries.

At the same time, no serious project within GUAM was realized in 20 years. However, recently the trade turnover between Azerbaijan and Ukraine has grown 5-6 times, Ukraine through Azerbaijan sends its goods to Central Asia. However, this does not mean that all of the above will accelerate the process of creating a free economic zone.

As one of the reasons for this, the political scientist sees in the Russian factor: "Russia's relations with Georgia and Ukraine are tense. However, the relations between Azerbaijan and Russia are quite normal and the Azerbaijani authorities do not want to irritate Russia. If the discussions on the creation of a free economic zone go to a serious phase, Azerbaijan will try to take into account Russia's position.

On the other hand, despite Russia's almost hostile relations with Georgia and Ukraine, Azerbaijan makes billions of investments in Georgia, SOCAR expands its activities in Ukraine. Knowing that this may not please Russia, Azerbaijan nevertheless enforces its interests. If the free economic zone brings profit to Azerbaijan, I think Baku will go to its creation," Shakhinoglu added.

In an interview with Ukrainian media, economist Alexander Okhrimenko said that the introduction of a free trade zone in GUAM will not bring economic benefits. In his opinion, Ukraine has nothing to offer GUAM member countries and in general, there is no rich representative in the organization who could finance the whole process: "In the European Union there is Germany, in the Eurasian Union - Russia, and in GUAM there is no one", - concluded Okhrimenko. -0-

Meat to Rise in Price Due to Rising Prices for Feed

Baku / 09.10.17 / Turan: Experts predict a strong rise in price of meat in the near future. The shortage of fodder base contributes to the spiral of prices for this important product of the consumer basket of Azerbaijanis, since the natural pastures used by the peasants for pasturing cattle are taken for cotton crops.

According to available data, in a number of regions the rural population is experiencing great difficulties with the breeding of livestock because of the lack of pastures. At the same time, cotton planting areas have been expanded to 136,000 hectares this year. The cost of feeds has also grown significantly. "The price of a bale of hay rose sharply from 1.20 to 4 manat, that is more than three times, and this factor will undoubtedly raise the prices of meat and dairy products by at least 20%," the Echo paper referred to the economist Natig Jafarli, as saying.

In particular, it is noted that local farmers are preparing an appeal to the government with a request to release imported poultry feeds from VAT, since otherwise it will be necessary to increase the cost of poultry meat, the newspaper reported.

According to experts, the cultivation of cotton in many farms is not voluntary, and in most cases the peasants resist the state-imposed initiative. So, according to the chairman of the Union of Free Consumers Eyub Huseynov, peasants of the Sabirabad region applied to him because officials forced them to plant this technical culture despite the absence of an irrigation system in the given territory. As a result, land plots are unsuitable for pastures, and the cotton crop is under big question.

Azerbaijan has never satisfied the domestic demand for meat and dairy products. "The country does not produce agricultural products and food in volumes that meet the needs of the population. For our domestic needs, we produce only 38% of meat and milk, 60% of eggs and 35% of chicken meat," the agricultural expert Vahid Maharramov said, predicting a further rise in price.

Due to the reduction in the fodder base, domestic production of meat and milk is rapidly falling, giving way to overseas products, and consumer prices are growing, Maharramov said. So, according to the State Customs Committee, for eight months of this year, shipments of meat from abroad increased to 28,249.8 tons, which in monetary terms is 42 million 979 thousand USD. For comparison, in the same period last year, meat imports were at the level of 16,920.19 tons (20 million 375.73 thousand USD). A similar situation is observed with imported milk - in the first eight months of this year, 5,364.93 tons of milk was imported for 8 million 589.91 thousand USD, while last year for the same period 3,479.27 tons of this product was imported for 5 million 193.17 thousand USD, so the increase is one and a half times. -0-

2017 to Remain in History as Year of Major Reforms - Ilham Aliyev

Baku / 09.10.17 / Turan: For nine months of this year, dynamic development was provided in all spheres and the main economic indicators are positive, Ilham Aliyev said at a Cabinet meeting on Monday.

He noted that the development of the non-oil sector amounted to 2.5%, the agriculture - 2.8%, and the foreign trade - 7%. "Over the reported period, foreign exchange reserves reached 42 billion US dollars, and this is one of the most successful points. We are working on issues of long-term sustainable development. Economic opportunities are the main condition for our independence," he said.

According to the President, for the specified period 226,000 new workplaces were created.

Concerning the restoration of the Çocuk Mercanlı village of the Cebrayıl district, Aliyev called it a historic event, and said the project of providing IDPs with new apartments will be continued next year. According to him, so far more than 250,000 IDPs have been provided with housing.

Touching upon regional projects, Aliyev said the new contract on the deep-water part of the Azeri - Chirag - Gunashli oilfield is of great importance for the economy as a whole.

The official opening of the Baku-Tbilisi-Kars railway will take place soon, having far-reaching significance.

"Projects in which Azerbaijan participates are global in nature and serve to strengthen the country"s position in the international arena," he said.

The President said that 2017 will remain in the history of the country as a year of major reforms.

"This year, the mechanism for encouraging investments was launched. As a result, the private sector attracted 1.7 billion manat," he said. -71D-

Caspian Air Cargo 2017 Summit Starts in Baku

/09.10.17/Turan: The Seventh International Caspian Air Cargo Summit 2017 will be opened in Baku from 9 till 11 October at the Boulevard Hotel. Panel discussions will begin tomorrow, October 10th.

This international forum will bring again together key managers and executives of well-known worldwide companies to discuss options for the development of the cargo industry and identify the most promising areas in the market. More than 200 delegates will attend the two day discussions about current trends and forecasts in rapidly changing business environment, the organizer, Silk Way Airlines, reports.

Recently the footprint of Silk Way in main markets has been increased with more than 10 Boeing 747 aircraft that operate a true global network to more than 40 destinations every week.

During years 2016 and 2017 the strong partnership with Cargolux, SW Italy and Sky Gates Russia Airlines has enabled Silk Way to make a quantum leap in their own development. ---08D

State Property Committee Turns to 500 Foreign Companies

Baku / 09.10.17 / Turan: In order to fulfill the tasks assigned to accelerate the privatization process and attract foreign investments, the State Property Committee sent appeals to more than 500 foreign companies, 40 investment funds, as well as 10 international consulting companies. So far only local investors take part in privatization.

To enhance the role of foreign investors, the State Property Committee representatives met with investors from Germany, the United States, France, Russia, China, Turkey, India, Great Britain, Iran and the U.A.E. this year. To increase interest in the enterprises put up for privatization, multilateral meetings were organized by the business unions of the U.S.A., Turkey and Germany operating in Baku, as well as the Black Sea Association of Exporters. Presentations about the enterprises put up for privatization are organized in the framework of business forums in Baku and abroad. The results of these meetings and events are not reported.

This year, the State Property Committee has held 40 auctions for which 1,400 enterprises and objects were exhibited, although most of them are offered repeatedly, since they do not find the client. Since September 2016 the Committee has been trying to sell the Dashkesan Mining Plant through investment competition. This enterprise has already been sold to foreign investors twice through investment competition, but the results have been canceled, and the investors have not been compensated. -----08D

Fiscal Bodies Cope with Nine-Month Plan

Baku / 09.10.17 / Turan: Over the first nine months of this year, the Ministry of Taxes transferred 5 billion 224.4 million manat to the state budget in the form of taxes and state duties, which is by 298.3 million manat or 6% higher than the indicator for the comparable period last year, the department said.

Customs officers also easily managed with the nine-month target. They increased the amount of collection of customs taxes and duties approximately, as much as tax authorities - AZN 297.9 million. In January-September, 1 billion 951.6 million manat was received from import-export operations to the state budget, 18% more than for the same period in 2016.

This year, 7 billion 645 million manat will be collected by the Ministry of Taxes and the State Customs Committee will collect 2 billion 250 million manat.

According to experts, there is a huge potential for increasing the growth of state budget revenues. For example, according to the estimates of the economist Gubad Ibadoglu, only in 2015 the amount of evasion from customs fees for the 10 main trading partners amounted to over 740 million US dollars or 1.3 billion manat. -----08B----

Uni Bank Plans to Increase Its Authorized Capital by 17.5%

Baku / 09.10.17 / Turan: At an extraordinary meeting of shareholders of Uni Bank, which will be held on October 13, it is planned to discuss the issue of increasing the authorized capital, the bank said.

The authorized capital will be increased to 140.7 million manat, by 21 million manat or 17.5%.

"The increase in capital will help Uni Bank maintain and strengthen its positions in the country"s financial market. The emerging stabilization of the country"s economy and an increase in Uni Bank"s activity within the framework of corporate and retail lending created a serious basis for further expansion of the bank"s activity," the report said.

In June 2017, the bank increased its authorized capital by 70% - up to 119.7 million manat.

OJSC Uni Bank was established in October 2002. Among the shareholders are the EBRD (European Bank for Reconstruction and Development) and DEG (German Investment Corporation), whose shares in the capital are 19.41% and 24.37% respectively. -71D-

Demand at Deposit Auction Exceeded Supply by 4.5 Times

Baku / 09.10.17 / Turan: At the deposit auction of the Central Bank of Azerbaijan on Monday demand exceeded supply by 4.5 times.

Demand at the auction amounted to 456.3 million manat, with the Central Bank offering 100 million manat. The funds were raised for a period of 14 days, at an average weighted rate of 10.01%.

Deposit auctions are held as part of anti-inflation measures. The Central Bank has started holding deposit auctions since June 2016. ----71D

Non-cash Settlements Available in ASAN Service Centers

Baku / 09.10.17 / Turan: In the ASAN service centers, there are opportunities for cashless settlement through plastic cards, the Financial Markets Supervision Authority says.

At the first stage POS terminals have been provided to ASAN service Centers 1 and 4, as well as to ASAN Communal.

The report says that as a result of measures in this direction, other centers of ASAN will also create non-cash settlement opportunities.--71D--

Foreign currencies rates fixed by Central Bank

1 ABŞ dollarıUSD1.7002
1 AvroEUR1.9953
1 Avstraliya dollarıAUD1.3198
1 Argentina pesosuARS0.0975
1 Belarus rubluBYN0.8637
1 Braziliya rialıBRL0.5388
1 BƏƏ dirhəmiAED0.4629
1 Cənubi Afrika randıZAR0.1239
100 Cənubi Korea vonuKRW0.1484
1 Çexiya kronuCZK0.0771
100 Çili pesosuCLP0.2688
1 Çin yuanıCNY0.2562
1 Danimarka kronuDKK0.2681
1 Gürcü larisiGEL0.6871
1 Honq Konq dollarıHKD0.2179
1 Hindistan rupisiINR0.026
1 İngilis funt sterlinqiGBP2.2267
100 İndoneziya rupiasıIDR0.0126
100 İran rialıIRR0.0045
1 İsveç kronuSEK0.2094
1 İsveçrə frankıCHF1.7381
1 İsrail şekeliILS0.4829
1 Kanada dollarıCAD1.3558
1 Küveyt dinarıKWD5.6237
1 Qazaxıstan tengəsiKZT0.0049
1 Qırğız somuKGS0.0249
100 Livan funtuLBP0.1129
1 Malayziya rinqqitiMYR0.4017
1 Meksika pesosuMXN0.0915
1 Moldova leyiMDL0.0968
1 Misir funtuEGP0.0962
1 Norveç kronuNOK0.2127
100 Özbək somuUZS0.0211
1 Polşa zlotasıPLN0.4628
1 Rusiya rubluRUB0.0292
1 Sinqapur dollarıSGD1.2465
1 Səudiyyə Ərəbistanı rialıSAR0.4534
1 SDR (BVF-nun xüsusi borcalma hüquqları)SDR2.3903
1 Türk lirəsiTRY0.4581
1 Tayvan dollarıTWD0.056
1 Tacik somonisiTJS0.1935
1 Yeni türkmən manatıTMT0.4858
1 Ukrayna qrivnasıUAH0.0635
100 Yapon yeniJPY1.5101
1 Yeni Zelandiya dollarıNZD1.2026