Country's non-oil sector keeps developing

By Azernews

By Sara Israfilbayova

Although oil sector plays the leading role in the economic development of resource-rich Azerbaijan, the major objective objective of the country’s economic policy today is to withdraw the Azerbaijani economy from raw dependence and to develop the non-oil sector. This is the focus of the reforms carried out in the country over the past few years.

This is the evidence of success of the state’s strategy aimed at diversifying the economy in order to maximize the development of the non-oil industry and expand the production of export products.

This year the lion’s share of imported goods falls on equipment from the world’s leading producers, which is connected with the expectation of commissioning new enterprises equipped with modern production lines - cars, electrical appliances, equipment and spare parts - $151.1 million (21.94 percent) and further, vehicles and spare parts - $103.5 million (15.4 percent) and food products - $99.2 million (14.41 percent).

In January 2018, the export of Azerbaijani products equaled to $1.038 billion, and import to $688 million, according to the State Customs Committee of Azerbaijan.

The volume of non-oil exports of Azerbaijan increased by 14 percent in January to July 2018 compared to the same period of last year.

Besides, the geography of export of Azerbaijani products is considerably expanding, and the number of entrepreneurs engaged in foreign trade activity is growing.

The government does its best to encourage business doing in and to support entrepreneurs through creating necessary conditions for the development of a healthy business environment.

For example, the suspension of inspections is considered to be an important step for stimulating the business development in the country.

During the period of the law’s validity, only tax audits, quality control of medicines by relevant executive authorities, verification of compliance with safety regulations and safety control of food products, as well as checks on cases that threaten the health and life of people, national security and economic interests may be carried out.

Moreover, in order to support entrepreneurship the government creates many other conditions as, issuance of the investment incentives documents following the approval of amendments proposed to the Tax Code of the country.

Under the investment incentives document, half of the revenue of an individual entrepreneur, profits of legal entity are exempted from income tax for seven years. Import of equipment for the implementation of the projects is also exempt of VAT and customs duties.

Also, 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.

Azerbaijan is constantly expanding the geography of exports. Today it covers more than 80 countries of the world, and in particular, the CIS countries, the Persian Gulf region, the EU, China and others.

Promotion of the “Made in Azerbaijan” brand, which is an initiative aimed at entering new markets, became one of the priorities of the country’s foreign economic policy. 

President Ilham Aliyev signed the Decree on large-scale promotion of local non-oil products in foreign markets as “Made in Azerbaijan” on 5 October 2016.

This Decree includes nine different support mechanisms to stimulate exports and promote “Made in Azerbaijan” abroad.

Depending on the support mechanisms, the costs relating to their realization are fully or partially covered by the state budget.

The export missions play an important role in expanding non-oil exports and promoting the domestic made products. Over the past year Azerbaijan has organized a number of different missions to Saudi Arabia, the United Arab Emirates, Russia, China, Hungary, Kazakhstan, Germany, Qatar and other countries.

Today, the country is confidently leading in the sphere of industrial development, at least among the countries of the South Caucasus, and the dynamics of this trend allows to believe that in the near future it will get rid of the oil dependence and become a major international exporter of industrial and agricultural products of global importance.