Today.Az » Business » Can Azerbaijan compete on world commodity market?
14 October 2011 [12:40] - Today.Az
The contribution of the light industry to Azerbaijan's GDP is too small - 0.15 percent. And the national market for products of this industry 90 percent depends on import.
There is a demand for high quality domestic products of light industry, but the supply is inadequate. According to most of experts, the light industry may be one of the first victims during Azerbaijan's accession to the World Trade Organization.
According to data provided by the State Statistics Committee, in January to August 2011, the enterprises of Azerbaijani light industry manufactured goods worth 45.5 million manat. In particular, in this period the industry produced 1,100 tons of cotton fibre, 6,500 tons of cotton thread, 918 square meters of carpet and carpet wares, 2.5 million pairs of socks, 53,600 women's and men's suits, 60,700 men's coats, jackets and rain-coats, 33,900 men's trousers.
As compared to the light industry of Azerbaijan during the Soviet period when Azerbaijan possessed developed light industry, of which share in GDP totaled eight percent, the modern light industry of the Republic differs scarcity of production. In market terms, it became clear that the export of raw materials for light industry (cotton, wool and silk) is more profitable than their use for domestic industry.
Major problems of the field:
- Use of morally and physically outdated technological equipment
Thus, one of key problems of outputting import replacing goods is technical rearmament of the field. This is not only support to this process, but creating facilities for transition to highly technological industry.
The field's fleet is comprised of outdated equipment by 80 percent. The last technical reequipment dated to 1985-1990. Annual renewal of the fleet of vehicles and devices at enterprises of the light industry does not exceed 1-2 percent, whereas the figure is 14-16 percent in economically developed countries. Over the past 10 years China and Turkey have fully reequipped by both export supplies and state aid. In China, for instance, light industry producers enjoy privileged taxation terms. As result of such protectionism on the state level these countries became leaders in the world export of light industry.
- Big share of shadow and illegally imported product on consumer market
Illegal import of infringing, falsified and poor quality merchandise remains one of painful points in local light industry. Unfortunately, official statistics does not provide figures on volume of sales and import of shadow industry products. Sometimes, goods are not so safe for human health. According to official statistics, import of light industry goods to Azerbaijan constituted 70.8 million manat in 2010.
- The enterprises' lacking of own funds to develop production
According to ASPI Consulting Engineers estimations, sector needs 200 million manat to upgrade, to apply production planning system, to design development strategy, to enter the regional markets, to attract investments, to use international accountancy and quality management.
- lack of staff and low level of salary.
Light industry is not so attractive for youth and specialists. According to official statistics, in the first half of 2011, average wages in light industry of Azerbaijan amounted to 271 manat.
The development of local light industry is included in the state program on development of Azerbaijani regions in 2009-2013. First steps have been taken in this direction, and positive changes are even well seen. Old enterprises are reconstructed and the new one enterprises of light industry are built, mainly in regions. There are 36 privatized clothing and spinning enterprises in Azerbaijan.
Ellada Khankishiyeva,
/Trend/
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