The number one goal of Azerbaijan is to reduce dependence on oil and gas, as well as diversify the national economy.
This was stated by President Ilham Aliyev at a meeting with a delegation of the American Chamber of Commerce in Azerbaijan on April 12.
President Aliyev believes that sharp decline in oil prices has actualized the implementation of many works related to reforms. No any developed country is rich in oil and gas. But these countries could become a leading force in the world by developing through innovations, business environment, and technologies.
“Azerbaijan is determined to conduct serious economic reforms,” President Aliyev said, adding that in the past 10 years, Azerbaijan was able to create more than one million permanent jobs, to achieve the development of regional infrastructure, and to create industrial capacity.
“But this is not enough, and there is a need for a more dynamic growth of non-oil sector,” he said.
Despite its industrial potential, Azerbaijan is keen on diversifying the national economy and achieving development of the non-oil sector.
“We need a more rapid growth in non-oil sector of the economy. Therefore, diversification is the number one issue,” he said, adding that new jobs should also be created in the country.
“New jobs should be created, as in connection with a positive demographic situation in Azerbaijan, we should annually create thousands and even tens of thousands of jobs. The growth rate of population is higher than the rate of opening new jobs,” he noted.
President Aliyev believes that creation of new jobs should be coordinated with reforms in education, because more specialists will be needed for those sectors, where the government is planning to achieve economic activity.
Another priority of the Azerbaijani government is to reduce dependence on imports.
“We managed to reduce dependence on the main areas of consumption. However, we are still in a state of dependence. Therefore, the inevitable devaluation of our national currency due to oil prices and developments happening in the neighborhood, of course, had an impact on inflation,” President Aliyev stressed.
Currently, production of export-oriented goods is also among Azerbaijan’s priorities.
“At first, it was not a priority, because, frankly, cash gained from oil was enough to ensure a budget surplus and tangible foreign exchange reserves. Currently, when oil prices have fallen, we should compensate it with other products of export orientation,” President Aliyev noted.
Azerbaijan, which enjoys favorable investment environment in the energy sector, also intends to create the same conditions for doing business in other sectors.
President Aliyev believes that projected investment environment should be created in the country as only in this case, Azerbaijan can attract investment under the current circumstances.
“We should ensure the same condition in all other sectors of the economy, so that the investors to be fully confident in the protection of their investments, to avoid changes in the conditions, interventions,” he said.
There are several sectors in Azerbaijan’s economy that enjoy significant potential to attract foreign direct investment.
“One of them is agriculture, which could create additional capacity, including export products. It can also contribute to the employment issue, as half of our population lives in rural areas,” President Aliyev noted.
The high-tech sector is also among these priority sectors.
“There is a good cooperation between Azerbaijani and American companies in this sector. We can grow more products on the same land plots by using your technologies in the agriculture,” President Aliyev said.
The tourism sector is also very important for Azerbaijan in terms of involving huge investments.
President Aliyev believes that the existing situation in the tourism sector does not match with the country’s potential. Therefore, Azerbaijan should create a tourism industry.
“Currently, additional steps are taken to make it easier for foreign tourists to visit Azerbaijan. In particular, given the geographical location, the hospitality of our people, security, friendly atmosphere and the existing infrastructure both in Baku and in the regions, as well as a variety of climatic conditions, we can attract more tourists,” he said.
Azerbaijan will further provide a governmental support to the small and medium sized enterprises, at the same time continue control over the financial and banking sector.
In his closing speech, President Aliyev touched upon the activity of the ASAN Service, and said that the services rendered through this body will be extended.
“This means transparency, service, culture, zero corruption and zero bureaucracy,” he said, adding that ASAN is an Azerbaijani brand.
Speaking at the meeting, the U.S. Ambassador to Azerbaijan, Robert Secuta said that the U.S. companies are operating together with other foreign companies to be active not only in the production sector, but also in the service and other sectors.
“I think that we can help you in the agriculture, high technologies and tourism sectors, as well as in the development of new areas that you have mentioned,” he noted.
Secuta also said since 1992, the U.S. has made assistance worth more than $1.2 billion to Azerbaijan through different lines, and added that one of the areas in which the U.S. focus is the development of entrepreneurship and agriculture in the country.
In her remarks, Teyba Guliyeva, the First Vice President of the AmCham and the representative of the Societe Generale Company in Azerbaijan, said that first of all, the speed of reforms is very important.
She believes that maintaining the same level of operation by taking serious steps towards changing the current business environment in Azerbaijan is very important.
“We believe that this level should be maintained and the economy should be strengthened. This is important not only for large companies, but also for small and medium sized enterprises,” Guliyeva added.
She believes that the establishment of the Boards of Appeal will serve for faster and transparent resolution of disputes. She appraised the establishment of the Financial Market Supervisory Body.
Rossen Papazov, the General Director of Holcim Azerbaijan, in turn, said that further development of infrastructure, roads and railways, completion of construction of the Baku International Sea Trade Port could be priority for Azerbaijan.
“Secondly, optimization of logistics costs and change of transport tariffs is necessary to ease export,” he added.
Nurlan Karimov, who serves as a representative of the Deloitte and Touche LLC, praised the reforms carried out for ensuring transparency in doing business.
He believes that the more transparency is ensured the more tax revenues will be transferred to the budget.
“At the same time, the tax system should be further improved for involving more tax paying investors in the country,” he said. “Thanks to Azerbaijan’s geographic location, the country can act as a regional center. Thus, favorable tax regime can be very useful for investors.”
He expressed confidence that the more the cash payment is small, the more tax evasion and other law violations will occur.