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AZPROMO, Int’l Trade Center sign MoU [UPDATE/ PHOTO]

5 July 2017 11:50 (UTC+04:00)
AZPROMO, Int’l Trade Center sign MoU [UPDATE/ PHOTO]

By Sara Israfilbayova

Azerbaijan Export and Investment Promotion Foundation (AZPROMO) and the International Trade Centre (ITC) have signed a Memorandum of Understanding (MoU) to boost the private sector development in the country.

The memorandum was signed by head of AZPROMO Rufat Mammadov and Executive Director of the ITC Arancha González in Baku on July 5.

Under the memorandum, the ITC will contribute to increasing of competitiveness and expansion of access of products produced by small and medium-sized enterprises (SMEs) in Azerbaijan to foreign markets. In addition, the Center will support the direct access of Azerbaijani products to international electronic commercial platforms.

Deputy Economy Minister of Azerbaijan, Sahil Babayev, addressing the signing ceremony, noted that the main components of the project "Be ready for trade" is the integration of SMEs into global value chains, increasing the competitiveness of products produced by SMEs, strengthening the potential of exporters' associations and creating links between SMEs in Azerbaijan and EU importers.

He said that currently a positive achievement is that about 80 percent of Azerbaijan's GDP accounts for the private sector.

"Over the past few years, Azerbaijan has done a great job for development of the non-oil sector, big reforms have been taken to develop entrepreneurship and improve the business climate in the country. The government created mechanisms to support competitive production, such as issuance of document of investment incentives, creation of special economic zones, creation of industrial and agricultural park, issuance of preferential loans through the National Fund for Entrepreneurship Support (NFES)”, the Deputy Minister added.

Babayev said that these measures contributed to the fact that at present, the major part of Azerbaijan’s GDP is formed at the expense of the non-oil sector, adding that back in 2006-2008, the share of the non-oil sector in Azerbaijan’s GDP was only 40 percent.

He went on to say that some 1.3 million manats ($763,700) have been returned to Azerbaijani exporters since early 2017 as part of the program on the refund of a part of expenditures for the export of non-oil products.

The state refunds 3-6 percent of the customs value of goods to non-oil exporters within the framework of mechanisms on promoting exports of non-oil products.

He said that the measures on promoting export and the “Made in Azerbaijan” brand led to a 22 percent increase in the country’s non-oil export, and in general, the volume of export grew by 44 percent.

“But one shouldn’t forget about the challenges we are facing,” Babayev said. “Despite that we were able to diversify our economy, oil and oil products still constitute the major part of our exports volume. So, currently, the main steps are aimed at diversifying our exports.”

In turn, González said that ITC is ready to support the diversification of Azerbaijani exports

"We are happy to cooperate with Azerbaijan within this project. The EU has undertaken to finance this project and it will be implemented with our assistance. We want to support the diversification of Azerbaijani exports, the bulk of which today are oil and oil products. We want to expand access of Azerbaijan’s small and medium-sized (SMEs) enterprises to world markets," she said.

SMEs make up about 80-90 percent of the economy of any country and increasing exports of SMEs, the country is achieving significant growth in its economy, according to González.

"In spite of the fact that more than 80 percent of the country's economy falls on SMEs, their share in exports does not exceed 10 percent. Yesterday I held a meeting with entrepreneurs and associations of hazelnut, vegetable, fruit and honey producers and I can say that there is a large unused potential. Therefore, I have no doubt that this project will work and will bring positive results,” the Director added.

She also highlighted a number of challenges facing the program, in overcoming which the Center is ready to assist Azerbaijan.

"First of all, this is the identification and study of target markets for the export of Azerbaijani products. The main point is also to obtain certificates of compliance with EU standards. We know that Azerbaijani products fully comply with the standards of the CIS, but the EU standards are different and they are not easily obtained. Another aim is to improve the quality of public services provided to SMEs and we are ready to support and work with the state to achieve these goals,” González concluded.

A day before, Economy Minister Shahin Mustafayev received González, who expressed satisfaction with the cooperation with AZPROMO.

Established in 1964, the ITC is the joint agency of the World Trade Organization and the United Nations.

ITC is the only development agency that is fully dedicated to supporting the internationalization of small and medium-sized enterprises (SMEs).

The Agency enables SMEs in developing and transition economies to become more competitive and connect to international markets for trade and investment, thus raising incomes and creating job opportunities, especially for women, young people, and poor communities.

AZPROMO was established by the Ministry of Economy of Azerbaijan in 2003 with the aim to contribute to the economic development through attracting foreign investments in the non-oil sectors of economy and stimulating expansion of country's exports of non-oil goods to the overseas markets.

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