The adviser to the president of Azerbaijan Entrepreneurs Confederation gave an interview to AZERTAC

Adviser to the President of the National Confederation of Entrepreneurs (Employers) Organizations of the Republic of Azerbaijan (ECO), Doctor of Philosophy in History, Ziya Hajili gave an interview to AZERTAC about the development of entrepreneurship in our country, support for entrepreneurs operating in the restoration of territories freed from occupation, and other relevant issues.

– Mr. Ziya, what important steps have been taken so far for the development of small and medium enterprises in our country?

– It should be noted that there is a clear state policy on the development of small and medium entrepreneurship in our country, and important work has been done in the direction of its implementation. Tasks defined in relevant state programs have been fulfilled. The legal base of small and medium entrepreneurship has been developed, and significant progress has been made in the field of entrepreneurship regulation. Necessary steps have been taken in the direction of reducing the tax burden for entrepreneurs and strengthening the stimulating role of the tax system. Targeted measures were implemented in the field of formation of mechanisms for protecting the rights and legal interests of entrepreneurs. As a result, accelerating the development of small and medium enterprises, forming an efficient market economy system of this sector, adapting to international economic trends, as well as strengthening its role in solving the country’s economic and social problems constitute one of the leading directions of the state’s economic policy. For this purpose the framework of relevant reforms is gradually expanded.

– As you emphasized, the development of entrepreneurship in our country is always in the center of attention of the state, and purposeful reforms and projects are implemented in this area, and the relevant legislative framework has been formed. Despite all this, there are some problems. In this regard, what do you see as the solution to the reduction of bureaucratic obstacles and other problems?

– Today, Azerbaijan is realizing its new economic development model. The development of the Caucasian transport corridor plays an important role in the implementation of huge projects. As a result of the implementation of international projects, Azerbaijan has become a transport hub and corridor in the last few years. Currently, our economy is experiencing a period of sustainable economic growth and economic development. According to the latest statistical data of the current year, high growth was achieved in the economy of Azerbaijan, especially in the non-oil and gas sector, according to the results of the first quarter. A 4 percent increase in GDP and a 6.7 percent increase in the non-oil and gas sector were recorded. For the development of the country’s economic and social spheres, 3.8 billion manats or 4 percent more than the corresponding period of the previous year were directed to the fixed capital from all financial sources. The volume of funds directed to the non-oil and gas sector increased by 4.8 percent. In January-March of the current year, the volume of foreign trade was 9.7 billion dollars, including the volume of exports was 6 billion dollars, resulting in a positive trade balance of 2.3 billion dollars. Non-oil and gas exports amounted to 673 million dollars. In addition to these, we cannot yet say that the opportunities created by the political and at the same time macroeconomic stability formed in our country in terms of the development of entrepreneurship, especially small and medium entrepreneurship, are fully utilized. According to statistical analysis, the number of people engaged in entrepreneurial activity is less than the available opportunities. Although the specific weight of the private sector in the country’s economy is constantly increasing, there is a greater need for the development of strategically important structural-forming potential enterprises in this section. At the same time, there are opportunities to increase the influence of small and medium enterprises on strengthening the export potential of the country, as well as improving its structure. The level of regional development of entrepreneurship should be adapted to the existing potential of the country in terms of strategic economic goals. Most of the small and medium enterprises are concentrated in the capital and its surroundings. We should pay more attention to the strengthening of relations between domestic producers. The cooperation and integration of small and medium business subjects and large enterprises should reach the necessary level. From the point of view of not only small and medium entrepreneurship, but also the entrepreneurship sector in general, the strategic goal is further improvement of the entrepreneurship activity regulation system, development of entrepreneurship human resources, deepening of technical and financial assistance mechanisms, strengthening of legal protection of entrepreneurship, creation of favorable conditions for the development of entrepreneurship at regional levels on the basis of both large and and ensuring the development of medium and small entrepreneurship. I believe that the preparation of technical, material and financial support mechanisms for the production of competitive export products, the expansion of investment support mechanisms for production-oriented entrepreneurship, the improvement of information provision of entrepreneurship based on the wide application of modern information technology, the formation of a system for preparing young people for entrepreneurial activity, the development of a system for the protection of the rights of entrepreneurs , as well as the creation and expansion of international business relations are important tasks in this direction.

– What are the possibilities and prospects of providing entrepreneurs with financial resources?

– Rapidly developing the non-oil sector in our country, achieving the formation of a diversified, competitive and sustainable national economy based on the development of entrepreneurship is the main goal of the economic policy. As a result of the conducted economic reforms, a number of significant achievements were achieved in this field, the business and investment environment were further improved, and macroeconomic and financial stability was established. This necessitates a wider coverage of small and medium-sized entrepreneurs who need credit resources in order to modernize, expand and increase the efficiency of the existing production and service areas in order to increase the role of entrepreneurs in ensuring employment and the comprehensive development of the non-oil sector in the country in the next periods. In particular, the distribution of risks between the parties in investment projects, the replacement of collateral requirements with alternative means, and thus the improvement of entrepreneurs’ access to financial resources are of great importance.

As we know, “Azerbaijan 2030: National Priorities for socio-economic development” is a sustainable growing competitive economy, a dynamic, inclusive and social justice-based society, a place of competitive human capital and modern innovations, a great return to the territories freed from occupation, a clean environment and green aims at national development directions as a country of growth. In the perspective of the national economy and the strategic road maps for the main sectors of the economy, increasing financial inclusion, diversifying the delivery channels of financial services, expanding access to financial sources for entrepreneurs, especially small and medium entrepreneurs, and improving the provision of financial services have been defined as one of the main strategic goals and priorities. This direction is undoubtedly an actual priority in the policy and activity of the National Confederation of Entrepreneurs (Employers) Organizations of the Republic of Azerbaijan. Within the framework of close cooperation with the relevant regulatory institutions, active steps are being taken in the direction of achieving further increase of entrepreneurs’ access to financial resources, thereby stimulating entrepreneurial activity, forming a crediting system based on the distribution of risks in the financial field.

– What is the main role of ASK in the field of protection and education of entrepreneurs’ rights?

– The mission of the National Confederation of Entrepreneurs (Employers) Organizations of the Republic of Azerbaijan, which is guided by values ​​such as independence, inclusiveness, transparency, cooperation, teamwork and diversity, is to become the voice of all entrepreneurs and their closest partner in the country, dialogue for the regulation of entrepreneur-state, entrepreneur-employee relations. to build and support the sustainable development of entrepreneurship in the country. In the field of protection and education of the rights of entrepreneurs, our organization ensures the creation of permanent business relations between entrepreneurs, helps them to develop joint investment, innovation projects and other entrepreneurial projects, as well as the formation of a healthy, rights-based entrepreneurial environment. Organizes educational events for entrepreneurial subjects, participates in the preparation and implementation of various socio-economically oriented field, regional and country-level programs related to the development of entrepreneurship. In addition to these, it helps the country’s entrepreneurs to find foreign and domestic counterparties, participates in their information provision, develops drafts of laws and other normative-legal acts related to the development of entrepreneurship and socio-economically oriented. It creates conditions for the study of world experience in the field of entrepreneurship development and their application in favorable directions in the country.

– What issues can be highlighted regarding the support to entrepreneurs operating in the restoration of territories freed from occupation, especially regarding financial opportunities?

– With the great victory, our lands, which were under occupation for nearly thirty years, were freed, and historical justice was restored. New, proud pages of our national history has been written. A major return to the liberated territories, sustainable settlement there, as well as reintegration into economic activity is currently one of our most important national development priorities for the next decade. The return to our lands, whose material and cultural resources were looted by Armenian vandals for nearly thirty years, is the most important challenge facing our state, and it is also a national task in terms of meaning and content. Restoration and construction works have already started in our Free Karabakh. At present, large projects are being implemented in the direction of the revival of our territories freed from occupation. Entrepreneurs have and will have an important role in this work. Great steps are being taken in order to more effectively achieve the set goals, to provide a modern and decent life for sustainable settlement in the liberated territories, to carry out construction-restoration and improvement works in all areas, as well as to support safe living, efficient activity and the continuous increase of well-being. On the basis of the great financial and economic potential of our country, the entrepreneurs will participate more actively in the extensive reconstruction and construction works that will be started in all territories freed from occupation by mobilizing our state and people.

One of the main tasks ahead is the creation of financial infrastructure in our territories freed from occupation, and the provision of necessary financial services to both enterprises and organizations, as well as to the population. In accordance with the recovery and return plans, work has already been started to create the appropriate financial network. At the same time, comprehensive measures are being taken to build the infrastructure of modern payment systems and meet the cash needs of business subjects and the population in the liberated territories. In addition to large-scale restoration and reconstruction, rapid economic reintegration measures are being taken in the liberated Karabakh and East Zangazur economic regions, where a sound foundation is being created for the revival of entrepreneurship. Currently, the number of people who want to start a business here is more than 2 thousand. Favorable conditions are created for entrepreneurs to obtain various benefits and business activity is stimulated; low rent is applied, communication and logistics infrastructure is built. The location of industrial zones on road and railway junctions allows easy transportation of goods. Unlike the industrial parks operating in other parts of the country, the industrial parks in the liberated areas offer a package of additional concessions covering utility, raw materials, and social areas. The concessions mainly consist of: residents are exempted from profit, property, land and simplified tax for 10 years from the time of registration, import of machinery, technological equipment and facilities, raw materials and materials is exempted from VAT and customs duty, compulsory state social insurance fee is subsidized, tax Financial assistance in the amount of 20 percent of the funds they pay for the use of communal services is paid to non-risk taxpayer entrepreneurs who are registered and engaged in production activities, and preferential loans are given.

In addition, entrepreneurs can take advantage of state guarantees and subsidies for loans obtained from banks and non-bank credit organizations. Up to 90 percent of business loans of up to 5 million manats, duration of up to 7 years, annual interest rate of up to 15 percent of entrepreneurs implementing investment projects are provided with a state guarantee. 10 percentage points of the annual interest rate of these loans are subsidized by the state for up to 36 months. Undoubtedly, the new industrial parks created in our liberated territories and concessions and incentives for entrepreneurs will play an important role in attracting large investments for development and business revival in the region.

– How do you evaluate the mutual influence of the COP29 movement, our country’s active participation in these challenges and policies, on the development issues of entrepreneurship in our country?

– Yes, as it is known, this year in our country was declared as “Year of Solidarity for the Green World”. The 29th session of the Conference of the Parties to the UN Framework Convention on Climate Change (COP29) will be held in Azerbaijan. Like all our public institutions, the National Confederation of Entrepreneurs (Employers) Organizations of the Republic of Azerbaijan has increased attention to environmental issues and promotion of green economy in the process of working with entrepreneurs. Also, ASK participates in the pavilions provided for the said events within the framework of joint cooperation with the International Organization of Employers, and works towards the organization of discussions with globally renowned experts about the current potential of our country. At the same time, the participation of the world’s most famous companies is planned in this pavilion. COP29 will have important contributions to the economy of Azerbaijan, including the entrepreneurial sector. This event primarily serves to raise the image of our country, which is very important in terms of attracting foreign investment to our export-capable enterprises. Another important issue is that COP29 has an important role in supporting Azerbaijan’s energy strategy at the international level. Alternative energy strategy, alternative energy production, development of local business entities in this field requires more investment and international cooperation. In this matter, there is a great need to implement projects within the framework of international cooperation. COP29 will give an important boost to the development of tourism and infrastructure in the country. It should be noted that local business entities will develop in this area. Various mechanisms are created by the state in connection with the event, one of which is the application of a mechanism related to obtaining preferential loans. Undoubtedly, this will act as a mechanism supporting the activity of business entities.