Conditions should be adapted in Azerbaijan to attract more investment

Conditions should be adapted in Azerbaijan to attract more investment

12 June 2019, 14:26 304

This year, 8 more facilities will start their work, in addition to 23 facilities already operating in industrial regionsin Azerbaijan, said Azerbaijani Economy Minister Shahin Mustafayev. In total, investments worth $3.3 billion were made into 5 industrial parks operating in Azerbaijan, he noted. In 2018 alone, $452 million was invested by residents, he said. About 9,000 permanent jobs have been created in industrial parks, he noted. At the next stage, the expected capital expenditure will be about $400 million, and more than 1,600 jobs will be opened additionally, he said. He noted that so far, the total value of the products manufactured in industrial parks exceeded 1.36 billion manats, from which goods worth 250 million manats were exported.

There are five industrial parks in Azerbaijan - Sumgait Chemical, Balakhani, Mingachevir, Garadagh and Pirallahi industrial parks. In addition to industrial parks, industrial regions also operate in Azerbaijan, which have already manufactured products worth 33 million manats. The expected level of investments is 140 million manats with the creation of up to 2,000 jobs.

What other measures should be taken to attract more investment into this area?

According to economic expert Rashad Hasanov, for a country like Azerbaijan, 3.3 billion is sufficient enough. "It is necessary to take into account that large investments have been attracted in the result of joint cooperation with industrial parks. Examples of this are the production of medicinal products in Neftchala automotive industry, cooperation with Russia and Iran, as well as car production in Hajigabul. In general, certain work has been done so far in the field. In general, there is a need for more investment in industrial neighborhoods as the country’s economy is a raw economy. Local investors have limited capacities. Foreign investment does not just mean cash flow. It also means the experience of advanced countries, access to new markets and expanding ties. In this regard, steps should be taken to liberalize the business environment and protect the property rights. At the same time, a system that meets new challenges through the improvement of management should be formulated. In this case, the volume of investments into industrial parks and the economy of the country can be further increased. Because our economy attracts the attention of foreign investors. Azerbaijan is considered a new market for foreign investors. Azerbaijan's geographical and geopolitical position is very favorable. But we have to adapt our terms according to investors. In the "Doing Business" index Azerbaijan has improved its position by 38 points over two years. This is a fairly fast change. But the investment is not at this pace. That is, investment in the country is not at a satisfactory level yet. The most important point for the investor is that the market is liberal. Azerbaijan should direct its further efforts in this direction. At the beginning of the year, some recommendations were made to improve the judicial system. I hope we will see positive changes in this direction soon. Only in this case we can encourage investment. Large discounts are made by the state for industrial parks. These discounts are encouraging factors. As a result of our work we have managed to attract some investment," he said.

Economic expert Parviz Heydarov noted that involvement of more investment in industrial parks requires a comprehensive approach. "Establishment and organization of industrial parks is the main part of the non-oil sector. Creation of these parks creates a favorable environment for entrepreneurship development in Azerbaijan. But at the same time, foreign investment is a key component of this work. I think that appropriate stimulating measures should be taken in this area. The head of state has signed several orders and decrees. Especially after the fall of oil prices, the attention to this area was even further increased. These assignments are now successfully implemented. I think marketing should be strengthened in order to attract more investment, risks should be predicted. Investors wanting to invest in industrial parks should be convinced that their products will be sold at appropriate markets. The investor should make sure that the results will be achieved before investing. Relevant bodies should deal with this issue, which has two parts. Fertile conditions must be created and encouraged to attract foreign investment. Customs duties, tax issues should be resolved. At the same time, a strategic policy should be established so that appropriate markets can be maintained," said the expert.

Fikret Yusifov, head of Association for International Economic Studies (AIES) " Ekonomiks", said the rapid development of the non-oil sector has been identified as the key direction of the country's economic strategy. "Today, price fluctuations of the oil in the world are pushing us to make more serious efforts to reduce oil dependence of the country's economy. The creation of industrial parks and the organization of different products in these parks is now a very important issue, involving both domestic and foreign investment, increasing the volume of investments from all levels for the development of the real sector in general, creating of new jobs and a decline in the economy's dependence on oil. The Oil Fund's active use of currency reserves, as well as the creation of conditions for the flow of capital through the involvement of the world's leading banks in the country might be the beginning of a serious change in this area. Therefore, today we have to take full advantage of the opportunities that oil prices have on world markets. One of the most effective ways to invest large sums of dividends into the real sector and bring foreign capital to Azerbaijan is that it is necessary to use the options to invite large banks to our country," Yusifov noted.

Shabnam Mehdizade