EU in­vest­ments in coun­try ex­ceed 15B

Azer News - - Front Page - By Sara Is­rafil­bay­ova

Over the past five years, the Euro­pean Union (EU) coun­tries have in­vested more than $15 bil­lion in Azer­bai­jan’s econ­omy.

Azer­bai­jani Deputy Econ­omy Min­is­ter Ru­fat Mam­madov made the re­marks at the EU-Azer­bai­jan busi­ness fo­rum on June 5 in Baku.

He noted that more than 1,500 Euro­pean com­pa­nies are cur­rently op­er­at­ing in Azer­bai­jan.

“Eco­nomic co­op­er­a­tion be­tween the EU and Azer­bai­jan is con­stantly im­prov­ing. Last year, the trade turnover be­tween the EU and Azer­bai­jan amounted to 9.4 bil­lion eu­ros, which ac­count ted for 32 per­cent of the to­tal trade turnover of Azer­bai­jan. In the four months of this year, the trade turnover amounted to $3.7 bil­lion, which is 15 per­cent more than in the same pe­riod last year. Over the past five years, the EU has in­vested $15.3 bil­lion in the coun­try,” Mam­madov said.

The deputy min­is­ter noted that Azer­bai­jan is also an im­por­tant part­ner of the EU in the en­ergy sec­tor.

“Azer­bai­jan pro­vides five per­cent of the EU's oil needs. On May 29, we of­fi­cially launched the South­ern Gas Cor­ri­dor project, which will pro­vide Eu­rope with Azer­bai­jani gas as well in the fu­ture,” he said.

Mam­madov noted that the par­ties con­tinue to work on var­i­ous co­op­er­a­tion pro­grams, and since 1992 the EU has al­lo­cated about 600 mil­lion eu­ros to Azer­bai­jan as tech­ni­cal sup­port.

The deputy min­is­ter said Azer­bai­jan also pays great at­ten­tion to the de­vel­op­ment of bi­lat­eral re­la­tions with the EU coun­tries.

“Up to now, Azer­bai­jan has signed agree­ments on avoid­ance of dou­ble tax­a­tion with 24 EU coun­tries, and agree­ments on pro­mo­tion and pro­tec­tion of in­vest­ments with 17 coun­tries. There are in­ter­gov­ern­men­tal com­mis­sions with 16 coun­tries. In ad­di­tion, we have al­ready signed agree­ments on strate­gic part­ner­ship with nine EU coun­tries,” Mam­madov said.

Fur­ther, he stressed that an­other $1.1 bil­lion will be in­vested in in­dus­trial parks op­er­at­ing in Azer­bai­jan.

“Cur­rently, $2.5 bil­lion have been in­vested in in­dus­trial parks in Azer­bai­jan. An­other $1.1 bil­lion will be in­vested in in­dus­trial parks in the fu­ture,” the deputy min­is­ter added.

The deputy min­is­ter also spoke about the suc­cess­ful im­ple­men­ta­tion of the mech­a­nism of in­vest­ment pro­mo­tion doc­u­ments, hold­ers of which are ex­empt from many taxes and re­ceive var­i­ous pref­er­ences.

“To date, in­vest­ment pro­mo­tion doc­u­ments have been is­sued as part of the im­ple­men­ta­tion of 276 in­vest­ment projects, to­tal­ing 2.5 bil­lion manat ($1.47 bil­lion),” Mam­madov said.

Ad­dress­ing the event Chair­man of the State Cus­toms Com­mit­tee of Azer­bai­jan Safar Me­hdiyev said that the trade turnover be­tween Azer­bai­jan and the Euro­pean Union con­tin­ues to grow ev­ery year.

The head of the State Cus­toms Com­mit­tee noted that an in­crease is ob­served in both ex­port and im­port op­er­a­tions be­tween Azer­bai­jan and the EU this year.

“Over the past five months of 2018, the trade turnover be­tween the EU and Azer­bai­jan ex­ceeded $5 bil­lion. At the same time, ex­ports to the EU in­creased by five per­cent com­pared to the same pe­riod last year, amount­ing to $3.7 bil­lion, and im­ports rose by 41 per­cent, amount­ing to $936 mil­lion,” Me­hdiyev said.

Last year, the turnover of Azer­bai­jan with the EU coun­tries amounted to $9.4 bil­lion, an in­crease of 51.6 per­cent, com­pared with the end of 2016. Azer­bai­jan’s ex­ports to the EU coun­tries for the re­port­ing pe­riod amounted to $7.45 bil­lion, and im­ports - 1.94 bil­lion.

The main trad­ing part­ner of Azer­bai­jan among the EU coun­tries in 2017 was Italy, which ac­counted for more than half of the trade with the EU coun­tries - $4.7 bil­lion.

In turn, the coun­try’s Min­is­ter of Taxes Mikayil Jab­barov noted that there are still prob­lems with the pro­vi­sion of com­plete and trans­par­ent re­port­ing in Azer­bai­jan.

“If we con­duct a sur­vey here, then it will be­come clear that 60-70 per­cent of busi­ness rep­re­sen­ta­tives are reg­is­tered as pay­ers of value added tax (VAT). But ac­cord­ing to the statis­tics of the Min­istry of Taxes, VAT pay­ers ac­count for just about three per­cent of all ac­tive tax­pay­ers. As you know, ac­cord­ing to the leg­is­la­tion of Azer­bai­jan, VAT pay­ers are those whose an­nual turnover ex­ceeds 200,000 man­ats ($117,600). Here we face three prob­lems - the con­ceal­ment of wages, turnover and re­port­ing. Re­forms in the leg­is­la­tion will be aimed at solv­ing these prob­lems,” Jab­barov said.

The min­is­ter noted that the re­forms will be aimed not only at in­creas­ing re­port­ing re­quire­ments, but also in eas­ing the tax bur­den, adding that the min­istry will con­tinue to re­duce the num­ber of field au­dits.

Tak­ing his turn, Ex­ec­u­tive Di­rec­tor of Azer­bai­jan’s Cen­ter for Anal­y­sis of Eco­nomic Re­forms and Com­mu­ni­ca­tion Vusal Gasimli men­tioned that the con­tin­ued eco­nomic de­vel­op­ment in Azer­bai­jan has led to a re­vival in the fi­nan­cial and bank­ing sys­tem.

“As of the end of April 2018, the vol­ume of as­sets of Azer­bai­jan’s bank­ing sec­tor re­mained sta­ble. The trend of fall­ing loan port­fo­lio of the banks stopped, and the loan port­fo­lios even in­creased, al­beit in­signif­i­cantly by 0.8 per­cent or 85 mil­lion man­ats ($50 mil­lion). The dol­lar­iza­tion of the loan port­fo­lio de­creased from 41.3 per­cent to 39.6 per­cent, the share of liq­uid as­sets made up 22 per­cent of the to­tal vol­ume, and the ex­ter­nal debt of the sec­tor de­creased by 40 per­cent. Dur­ing the first four months of 2018, the cap­i­tal in­jec­tion into banks amounted to 313 mil­lion man­ats ($184 mil­lion),” Gasimli added.

Fur­ther, speak­ing of oil prices, he stressed that de­spite the fact that oil prices cur­rently hold at $80 per bar­rel, Azer­bai­jan should con­tinue car­ry­ing out eco­nomic re­forms, adding that this year, in the rat­ing of Do­ing Busi­ness, we in­tend to be­come one of the re­form­ing coun­tries.

Ac­cord­ing to the Ex­ec­u­tive Di­rec­tor of the Cen­ter, in re­cent years, Azer­bai­jan has car­ried out suc­cess­ful re­forms re­lated to the or­ga­ni­za­tion of busi­ness, is­su­ing per­mits for con­struc­tion, ac­cess to loans, pro­tect­ing the rights of in­vestors and so on.

Head of the State Mi­gra­tion Ser­vice Vusal Huseynov said that the coun­cil will in­clude rep­re­sen­ta­tives of such or­ga­ni­za­tions as Amer­i­can Cham­ber of Com­merce in Azer­bai­jan (AmCham), the Azer­bai­jan-Turkey Busi­ness As­so­ci­a­tion (ATIB), the Ger­man-Azer­bai­jani Cham­ber of Com­merce, as well as such com­pa­nies as BP and SOCAR.

He said that the coun­cil will en­sure more sim­pli­fied and trans­par­ent process for is­su­ing per­mits for the em­ploy­ment of for­eign cit­i­zens in Azer­bai­jan.

“All pro­cesses - from sub­mit­ting doc­u­ments to ob­tain­ing a fi­nal de­ci­sion - will take place on­line, and it will be pos­si­ble to mon­i­tor these pro­cesses from their start to fin­ish,” Huseynov said.

He also touched upon the is­sue of ex­pand­ing the quota for ob­tain­ing per­mits, adding that en­trepreneurs will be able to take an ac­tive part in the defin­ing of quo­tas.

Agri­cul­ture Min­is­ter Inam Ka­ri­mov, for his part noted that de­spite the large trade turnover vol­ume be­tween Azer­bai­jan and the EU coun­tries, only a small pro­por­tion of agri­cul­tural prod­ucts ac­counts for it.

“Last year, Azer­bai­jan ex­ported prod­ucts for $7.4 bil­lion to the EU and im­ported prod­ucts worth $1.9 bil­lion. How­ever, the trade turnover of agri­cul­tural prod­ucts is at a very low level. In­creas­ing this indi­ca­tor is our strate­gic goal,” Ka­ri­mov said.

The min­is­ter noted that the agri­cul­tural sec­tor of Azer­bai­jan in­creased by 4.2 per­cent in 2017, and its share in the coun­try’s GDP hit 5.6 per­cent, adding that agri­cul­tural ex­ports in­creased by 39.8 per­cent in 2017.

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