By Gulgiz Muradova
Energy-oriented economies, having suffered from the realities of the post-oil era, are rushing to increase engagement in the non-oil sector and push back against the oil influence on the economy. And the time has show that the only way forward for the sustainable economic growth is to accelerate the doing business in the non-oil sector and expansion into the wider export markets.
Last year, the authorities of Azerbaijan have launched large-scale reforms and adopted a roadmap program that prioritizes 12 sectors with strategic goals set before the economy to create a new development model basing on short-term (until 2020), medium-term (until 2025) and long-term measures (post 2025). The key insight of the economic reforms that allows to achieve the sustainable development and pervade the budgets, are exports.
Azerbaijan has started promoting the ‘Made in Azerbaijan’ brand in foreign markets since 2016, and already recorded about 10-percent growth in the exports in January-March 2017. But the potential is more than the current figures show. Today’s most important goals of the export-led growth strategy is to properly promote ‘Made in Azerbaijan’ brand, ensure access to new export markets and enter traditional export markets with a wider range of products.
From a development perspective, the goal of the export-led growth strategy is to promote the growth of the manufacturing sector and therefore transform the economy from an energy one to an industrial-agricultural base. In the extreme, along with the import substitution strategy it could lead to complete self sufficiency and turning into a net exporter.
As of today, 92 trademarks of Azerbaijan are protected under the ‘Made in Azerbaijan’ brand, while the country’s total outputs nears 250 kinds of products in food, light, heavy and construction industries. The brand is highly successful in regional and world markets, and Azerbaijan’s local output meets all the necessary standards.
Azerbaijan has trade operations with 137 countries in the first two months of 2017, while it exported goods to 77 countries and imported goods from 132.
The foreign trade turnover during the reported period hit $3,288 billion, with exports worth $2,316 billion. Some 42.9 percent of trade turnover fell to share of the EU countries, 11.2 percent - the CIS member states and other countries of the world accounted for 45.9 percent.
In January-February 2017, the volume of the non-oil exports hit $ 176.2 million, which is 0.3 percent more compared to 2016 compared in real terms, according to the State Statistics Committee.
The CIS countries especially Russia, Kazakhstan, Georgia and Belarus are the traditional export markets for Azerbaijani goods, including alcoholic and non-alcoholic beverages, fruit, vegetables, nuts, tea, conserve, cotton, oil, sugar, salt and etc. In a bid to expand the export map, the country seeks to broaden the range of products sold under the ‘Made in Azerbaijan’ brand through the high-quality products that have so far been used only in domestic market.
The countries of Western Europe, Far East, including Japan and China, African states and Gulf countries are the target markets, according to the Azerbaijani Economy Ministry. The country has been sending trade missions to various countries since November 2016 to increase its exports. Missions have already been organized to China, UAE, and Germany, Qatar, Pakistan and Afghanistan.
The export missions have already born its fruit as the local entrepreneurs achieved a number of deals, including on supply of 500,000 litre bottles of wine to China, on honey supply to Dubai, on supply of pomegranate juice to Europe, on supply of fruit juices to Pakistan and Afghanistan, on supply of pipes, fitting and polyethylene products to Pakistan.
Besides, Azerbaijan has agreed to supply the street and garden furniture to Qatar, received first order on supply of nuts to Spain and holds talks on supply of fruits, vegetables, fruit juices, honey, dry milk, nuts, meat and tea to Gulf countries and access to the supermarket chains operating in this region.
The country will soon send export missions to Kazakhstan, Russia, U.S and other countries, and join the World Food Moscow, Anuga, the Hong Kong International Wine & Spirits Fair and other fairs to reach new markets.
Another step forward in this direction is appointment of trade representatives in embassies and consulates abroad, and opening of trade houses to facilitate business ties and increase the effectiveness of export promotion measures.
The export promotion efforts also include the encouragement of export oriented companies.
Thus changing the economic policy from inward looking to outward looking promises Azerbaijan not only huge foreign exchange earnings but also increase in productivity and growth inside the country.
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