Which sectors should be given priority?
Economy01 February 2016, 15:50 861
It is obvious that as an oil producing country, Azerbaijan cannot avoid being affected by the current economic crisis caused by falling oil prices all over the world. The head of the state has introduced a new economic policy to get out of the current situation with minimal loss. Several countries seem to make certain changes to their taxation and customs systems to lower their dependence on oil revenues. Naturally, every country affected by low oil prices does its best to minimize the negative impact. Our country switched to the "floating currency" to avoid big losses and this was an inevitable and natural thing to do. Generally speaking, existing economic potential and proper management are emphasized as the way out of this current economic environment.
Presidential aide for social and political issues Ali Hasanov discussed the issue at length and said that the president had announced the main directions of new concept of economic policy that includes measures against the crisis at the meeting of Cabinets of Ministers on 10 January. He stated that certain legislative and practical steps would soon be taken to tackle the negative impacts of devaluation. He said the potential of certain sectors were being assessed for this purpose : "President Ilham Aliyev identified the development of the non oil sector as the priority in the economic sphere in 2016. In recent years, the non oil sector of Azerbaijani economy has developed rapidly, the annual average growth is around 10%".
We should note that, President Ilham Aliyev identified the priority non-oil areas and emphasized the importance of industry, agriculture, service sector, transport-transit, information-communication technologies. As we know, our country is situated in a very favorable regional location. And this creates more opportunities for entering a bigger market. For example, about 300 million people live in neighboring countries such as Russia, Iran, Kazakhstan, Uzbekistan and Georgia and if Azerbaijan's position becomes stronger in these markets, this will be very promising for our country. And for this, we have to create high quality Azerbaijani brands to get into the international market, organize strong management, use the potential of both the government and the entrepreneurs to the fullest.
Presidential aide also noted that, as the production capacity increases, we could think about entering even bigger markets: "As we know, agriculture has a huge potential in Azerbaijan. Based on the work carried out so far, I can say that in the coming years, local agriculture products will fully meet the domestic demand and also strengthen the export potential of Azerbaijan. Today, Azerbaijani goods have an important place in Russian market. We have to expand this potential. Middle Eastern countries are interested in Azerbaijani goods. Evidently, there are serious opportunities for expanding and we should make use of our potential to the fullest".
According to experts, Azerbaijani products are quite cheap, but because the products with ingredients exported from abroad cost more, it is not easy to organize their export. Therefore, in new investment projects, the ingredients of products produces in Azerbaijan should be analyzed and special attention should be paid to production of this raw material. Some suggests that until such a production is organized, certain customs and tax concessions can be applied to those ingredients. One of the promising areas of Azerbaijani economy is service industry. In recent years, many important steps have been taken to develop the tourism potential of the country, new tourism complexes and recreational centers were opened in all regions. Both government and businessmen contributed significantly to this process. But there are shortcomings and problems that are undeniable and they limit the tourism potential of Azerbaijan. The first problem that comes to mind is, of course, the expensive prices for which tourism complexes offer their services. This fact forces the local population to head to neighboring countries for holidays. In current climate, tourism centers should properly organize management, pay more attention to marketing and offer modern and high quality service. Tourist flow should not be seasonal but permanent and the service should meet the demand.
According to A.Hasanov, the international practice should be studied and applied in this field: "In current situation, the tourist flow from West to Azerbaijan may slow down. Now we have to think about who can replace them. We should again focus on the countries in the region. Why shouldn't the tourist flow from Russia, Iran, Kazakhstan, Middle East to Azerbaijan be encouraged? We can learn from international practice. If necessary, we can use the potential of our diplomatic representatives abroad".
At the moment, the transport-transit capacities of the country are at the center of attention. Its development and plan for turning the country into a transit hub is a successful transnational project. Because Azerbaijan has the potential to unite different regions through energy export. The implementation of Baku-Tbilisi-Kars railway and TANAP projects and transportation of goods and energy resources from different regions to Europe through Azerbaijan will further increase this potential. Presidential aide thinks that, Azerbaijan is implementing a purposeful policy to play a central role in creating a transport corridor and ensuring that it operates effectively. After launching Baku-Tbilisi-Kars and Azerbaijan - Iranian Astara railways, East-West and North-South transport corridors will be fully ready to use: "Additionally, highways, communication between villages have been upgraded to modern standards and the biggest commercial port was built in Caspian region and air transportation was upgraded to modern standards. Currently, application of a united tariff system on East-West transport corridor, proposed by Azerbaijan, is being considered. China has already sent a container train to Azerbaijan through this corridor. In my opinion, the scale of the work done has created favorable conditions for fully realizing Azerbaijan's potential as a transit center and making big profit".