Azerbaijan Export and Investment Promotion Foundation. Azerbaijan Country Presentation

Transcription

1 Azerbaijan Country Presentation

2 Basics Establishment: 28 May 1918 Independence: 18 October 1991 Area: Population: Official Language: Government system: Membership in: 86.6 thsd km million Azerbaijani Presidential Republic UN, Council of Europe, OSCE, Non-Aligned Movement, OIC Highlights: 1st democratic republic in the Islamic world 1st Opera in the Islamic world Women voting right in 1918 (while in Italy ; Switzerland ; France 1944) Currency: Manat: 1 AZN = 1.27 USD

3 Characteristics of economy ECONOMIC STABILITY FAVOURABLE BUSINESS AND INVESTMENT CLIMATE PRIVATE SECTOR CLEAR VISION FOR FUTURE

4 Economic stability: Macroeconomy Nominal GDP, bln USD th among 148 countries in terms of stability of macroeconomic environment Source: World Economic Forum Strategic currency reserves, bln USD nd fastest growing economy among countries for GDP per capita growth in Source: The Economist

5 Economic stability: Diversification Structure of GDP Diversification of economy and development of non-oil sectors are key strategic priority of economic policy Non-oil GDP growth, % Non-oil 0.3 Oil Foreign investments in non-oil sectors, bln. USD

6 Economic stability: Competitiveness GLOBAL COMPETITIVENESS REPORT Estonia Spain Azerbaijan The report assesses the ability of countries to provide high levels of prosperity to their citizens. This in turn depends on how productively a country uses available resources. Therefore, the Global Competitiveness Index measures the set of institutions, policies, and factors that set the sustainable current and medium-term levels of economic prosperity. Lithuania 41 Latvia 42 Poland Turkey Malta st among CIS countries (6 times running), 38 th among 144 countries Other indicators (place among 144): Kazakhstan Russia Georgia Ukraine Moldova Inflation 1 st Macroeconomic environment 9 th Government budget balance 15 th General government debt 12 th Labour market efficiency 33 rd Capacity for innovation 43 rd Technological readiness 56 th Armenia 85 Kyrgyzstan 108

7 Economic stability: Sovereign debt ratings Rating agency Term Rating Outlook Long Term Foreign Currency BBB- Stable Short Term Foreign Currency Long Term Local currency Short Term Local Currency A3 A3 Long Term Foreign Currency BBB- Stable Short Term Foreign Currency Long Term Local currency F3 BBB- BBB- Long Term Foreign Currency Baa3 Stable Long Term Local Currency Baa3

8 Business enabling environment Reformist business environment Firm legal basis and continuous improvement of business legislation Top-reformer of business regulations according to Doing Business Report 2009 Decrease of red tape, simplifying business permitting and licensing systems One-stop-shop for business registration One of the easiest start-up procedures in the world 2 days for business registration Internet registration of individual entrepreneurs and local commercial legal entities Competitive tax system E-filing and e-payment Corporate tax 20%; VAT 18%; Simplified tax 4% and 2% No agriculture tax Tax holidays for residents of industrial and high-tech parks User-friendly government services 428 e-services by state authorities Web portal on business permissions and licenses ( and B2B facilitation ( One-stop-shop services by ASAN Service Centers (State Agency for Public Service and Social Innovations)

9 Business enabling environment WB Doing Business Report 2014 Economy Rank 70 th among 189 countries Georgia 8 Kazakhstan 50 Bulgaria 58 Italy 65 Turkey 69 Azerbaijan 70 Romania 73 Czech Republic 75 Croatia 89 Russia 92 Ukraine th among the 50 economies narrowing the distance to frontier the most since The distance to frontier measure shows how far on average an economy is from the best performance achieved by any economy on each Doing Business indicator since Some sub-indicators: Starting a business 10 th Registering property 13 th Investor protection 22 nd Enforcing contracts 28 th Getting credit 55 th In Global Competitiveness Index (rank/148): Hiring and firing practices 8 th Burden of government regulation 21 st Strength of investor protection 25 th

10 Liberal investment climate Welcoming policy National regime for foreign investors No restrictions for any type of foreign investment Incentives for foreign investors Guarantees Guarantee against adverse changes in the legislation, nationalisation and requisition No discrimination policy Guarantee of compensation of damages and repatriation of profits Sophisticated legal base Law on Investment Activity and Law on Protection of Foreign Investments Party to New York (1958) and Washington (1965) Conventions 46 bilateral investment treaties 45 double taxation treaty Institutional support Azerbaijan Export and (AZPROMO) Azerbaijan Investment Company National Fund for support of Entrepreneurship

11 Liberal investment climate Liberal investment climate Non-oil sector 62 % Domestic 99,4 bln USD Total Investments bln USD Oil sector 38 % Foreign 88,2 bln USD

12 Private sector: Entrepreneurship Private sector development through privatisation, liberalisation, land reforms and modernisation of business regulations Role of private sector in the economy: GDP: 81.5% Employment: 74% Tax proceeds: 71.9% Trade and services: 99.7% In the period of : Number of commercial entities increased by 2.33 times Number of legal entities increased by 1.3 times Number of individual entrepreneurs increased by 2.8 times Agriculture: 99.4% Industry: 87.3% Transport: 77.7% ICT: 76.6% Construction: 76%

13 Azerbaijan 2020: the vision of the future Objectives for economy: GDP will increase twice GDP per capita will reach 13,000 USD Azerbaijan will become a full member of the group of countries with high average income Azerbaijan will reach the highest positions in the group of countries with high human development (according to the human development classification of the UN Development Programme) Export-oriented economic model Volume of per capita non-oil export will reach 1,000 USD Innovation based efficient economy with increased productivity Increased competitiveness through diversification, improved structure and strengthened macroeconomic stability Average annual growth of non-oil GDP will be more than 7%

14 Food industry/agriculture Climatic zones/types 9 out of 11 existing in the world and fertile land Largest employer with up to 40% of employed workforce Tax breaks and subsidies Strong comparative advantage in exporting fresh fruits and vegetables Import substitution and export orientation Access to the regional markets: GSP, and FTAs with the CIS countries Focus on productivity, competitiveness and marketing

15 Tourism Unique geografic and climatic conditions In 2013 number of tourists increased by 3.9 times in comparison with 2003 World Tourism Organisation: Azerbaijan is top 2 nd in terms of the growth of tourist inflow in percentage ratio (+27% in 2012) Tourism related expenditures of foreingers: in $0.577 bln and in 2013 increased by 2.8 times up to $1.6 bln. Focus on establishment of modern tourism infrastructure, restoration of historical, cultural and natural sites and marketing Potential for the development of almost all types of tourism The largest project: winter-summer tourism complex in Shahdag to be completed in 2016 and able to welcome tourists

16 ICT Average annual growth rate at 20-25% in the last 10 years 80% of income in ICT belongs to private sector, while mobile telephony and IT are completely private Around 2.5 bln USD invested in ICT in the last 10 years, 72% of which accounts for private sector and foreign investments First among CIS States on share on internet users according to the WEF Global Information Technology Report % of population uses internet, 50% uses broadband internet Space industry started with the launch of the first national satellite in February, 2013 Recent projects: High technologies park, ICT Development Fund, IT University

17 Industry Share in GDP: 46.3% Intensive industrialisation policy: increase of 262% since 2005 Investment (2013): total $9.5 bln 53.4% foreign, 46.6% domestic Focus on establishing supply chains and clusters as a driving force for industrial development Priorities on heavy industry, mechanical engineering, agroindustry, construction materials, chemicals, alternative energy, light industry Establishment of industrial parks: chemicals, waste recycling New industrial parks to be established

18 Special zones Sumgait Chemical Industrial Park (SCIP) Total area: about 300 ha Administration: Sumgait Chemical Industrial Park LLC under management of Ministry of Economy and Industry Priority products: chemicals used in agriculture, construction, packaging and automotive industries Infrastructure: All utilities are provided by plug-and-play concept Tax holidays (corporate, property and land taxes and VAT on imported equipment) for 7 years Key advantage: Availability of in-door raw materials, increasing domestic demand and close proximity to regional markets

19 Special zones Balakhani Eco-Industrial Park Total area: 7 ha Administration: Tamiz Sheher OJSC under management of Ministry of Economy and Industry Priority areas: Recycling of plastics, tire/rubber, electronics, accumulators, non-ferrous metals, cabels and specific types of domestic waste Infrastructure: Offices, training centers, laboratory, All utilities are provided provided by plug-and-play concept Tax holidays (corporate, property and land taxes and VAT on imported equipment) for 7 years Key advantage: Proximity to city waste landfill site, Material Recovery (waste sorting) Facility and modern Waste-to-Energy Plant

20 Thank you for the attention! Azerbaijan Export and (AZPROMO) Baku Business Center 32, Neftchiler ave., Baku, Azerbaijan Tel.: (+99412) /48; Fax: (+99412)