Azerbaijan Country Presentation
Basic information I UN Security Council non-permanent member for 2012-2013 I Establishment: 28 May 1918 I Independence: 18 October 1991 I Official Language: I Political system: I Area: I Population: I Capital: I Autonomy: Azerbaijanian Presidential Republic 86.6 ths. sq. km. 9.2 million Baku Nakhchivan Republic I Significant highlights: I First democratic republic in the Islamic world I 1st Opera in the Islamic world I Women voting right in 1918; Italy -1946; Switzerland - 1971; France - 1944 I Currency: Manat: 1 AZN = 1.27 USD
Interesting facts I 50% of world oil production in XIX century I 80% of total Soviet oil production during World War II I First Baku oil boom I Nobel s first Kerosene factory I 1846 first hand-dug oil wells I First Baku-Batumi Pipeline I Nobel s distribution system I First rail tank cars
Macroeconomic figures 2011 2011 GDP, bln USD 63.4 GDP per capita ($) 7,003 Investments ($) 21.6 bln FDI ($) 4.4 bln Inflation 7.9% Unemployment rate 5.4% Poverty level 7.6% Average monthly salary ($) 460 Non-oil GDP growth 9.4 % Income growth rate of population Non-oil investments 15.6 bln $ 19.6% Total investments 21.6 bln $ Strategic currency reserves 40 bln $
productivity Azerbaijan Export and GDP share in the region I GDP share in the South Caucasus (%)
Macroeconomic figures I Average GDP growth in 2006-2011 - 14.1% 2 nd fastest growing economy among 179 countries for GDP per capita growth in 2001-2010
Macroeconomic figures Nominal GDP, bln USD
Macroeconomic figures Share in Economy 17.5% 82.5% Private sector Public sector
State Budget State Budget revenues, bln USD
Strategic currency reserves External debt in 2011 4.6 bln USD 40 29.1 18.5 20.3 1.62 2.04 2.4 4.4 7.4 2003 2004 2005 2006 2007 2008 2009 2010 2011 bln, USD
State Programs I State Program on socio-economic development of regions of the Republic of Azerbaijan in 2009-2013 I State Program on Food Security in 2008-2015 I State Program on the development of tourism in the Republic of Azerbaijan in the years of 2010-2014 I State Program on use of alternative and renewable energy sources in the Republic of Azerbaijan
Poverty reduction I State Program on Poverty Reduction and Sustainable Development of the Republic of Azerbaijan in 2008-2015 49% 48% 45% 40% 29% 21% 16% 13% 11% 9% 7.6% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Poverty reduction dynamics
Country Ratings I UNDP Human Development Report 67 I WEF Global Competitiveness Report 2011-2012 55 th among world and 1 st among CIS countries I World Economic Forum Report 2010-2011 - 1 st among CIS countries for ICT
Economic reforms Methodology 2012 rankings Registering Property 9 Starting a business 18 Protecting investors 24 Enforcing contracts 25 report available at www.doingbusiness.org The Doing Business project provides objective measures of business regulations and their enforcement across 183 economies and selected cities at the subnational and regional level.
One-stop-shop Type of legal entity: I Banks, stock exchanges, insurance companies, branches of foreign legal entities I Agricultural business I Other legal entities Duty: 220 AZN 3 AZN 11 AZN Statistical Committee E-registration is now available Effective 01.01.2008
Taxation I Corporate Tax 20% I Value Added Tax 18% I Simplified Tax 4% and 2% I Agriculture Tax I No limits on the Repatriation of profits I Inheritance and Gift Tax I No customs duties on non-oil production imports (specified agricultural products)* I No VAT on non-oil production imports (specified agricultural products)* *Effective 01.03.2011
Foreign Trade (import) 2011 Other 40% I Trade turnover I Import 36.3 bln US dollars 9.7 bln US dollars Ukraine 5% Germany 8% China 6% France 6% USA 6% Machinery, equipment Vehicles and spare parts Foodstuffs Non-ferrous metals and products Pharmaceuticals Wood and products Other Turkey 13% Russia 16% I More than 10 Free Trade Agreements I 149 trade partners I GSP, GSP + (Generalized system of preferences) I WTO negotiations process
Foreign Trade (export) 2011 I Trade turnover I Export 36.3 bln US dollars 26.6 bln US dollars Russia 4% Israel 3% USA 7% France 15% Italy 35% Other 33% Ukraine 3% Raw oil and petrochemicals Fruit and vegetables Plant and animal oil Ferrous metals and products Chemical industry products Cotton Aluminum and products Alcoholic and non-alcoholic beverages Tobacco and products Other
Investments FDI 41.4 bln USD Foreign 63.1bln USD Domestic 55.5 bln USD Oil sector 48.5 bln USD Total Investments 118.6 bln USD Non-oil sector 70.1 bln USD *1995-2011
Investments FDI 4.4 bln USD Foreign 8.6 bln USD Domestic 13 bln USD Oil sector 6 bln USD Total Investments 21.6 bln USD Non-oil sector 15.6 bln USD *2011
Why invest in Azerbaijan? POLITICAL & FINANCIAL STABILITY Good climate and welcoming culture Well-developed infrastructure Abundant resources
Favorable location Azerbaijan is the country on the crossroads of Eurasia
Abundant resources I 9 out of 11 climatic zones I Mild winters and hot summers I Rich mineral and climatic resources I Ferrous and non-ferrous metals I Raw construction materials
Well-developed infrastructure I Logistical hub for Asia Europe, Middle East CIS I Largest port in the Caspian Sea is being constructed I Developed rail infrastructure I Easy access to the Black Sea region I Baku Tbilisi Kars railroad (The Iron Silkway)
Europe Caucasus Asia Transport Corridor I Baku Tbilisi Kars railroad (The Iron Silkway) ISTANBUL AHALKALAKI KARS ALYAT SEA PORT
Well-developed infrastructure I HAPPINESS IS MULTIPLE PIPELINES
Well-developed infrastructure I Best passenger and freight airport in the Caucasus and Caspian region I Destination to major cities: Tbilisi 1 hour Moscow 2.5 hours Dubai 2.5 hours Istanbul 2.5 hours Riga 3 hours Vienna 4 hours Frankfurt 5 hours Paris 5 hours London 6 hours Nakhchivan Ganja Zagatala Gabala Lankaran Baku
Competitive and skilled labor force I Entrepreneurial culture I High literacy level (99.6%) I Excellent IT and foreign languages skills I Human resources development strategy/ State Program on education abroad (2007-2015) - Converting black gold into human gold - funded by the Government of Azerbaijan - 5000 students studied by completion - Sectors: economics & management, ICT, engineering- industry, construction, services, agriculture, medicine, law, education, science * Source: The State Statistical Committee
Where to invest in Azerbaijan? Agriculture/ food industry Alternative energy Tourism Construction
Where to invest in Azerbaijan? Chemical industry ICT Transportation and logistics Light industry
Agri-food industry I Climatic zones/types 9 out of 11 and fertile land I 47% of population reside in rural areas I Largest employer with up to 40% of the total workforce I Tax breaks and subsidies I Traditional CIS markets of around 300 million population I Strong comparative advantage in exporting fresh fruits and vegetables I Easy access to the regional markets hub to supply I GSP, GSP+, FTA with the CIS countries
Alternative and Renewable Energy I The power sector has a leading role in the economy of Azerbaijan I Increased demand for electricity by 4.7% each year until 2015 I Renewable Energy Sources - solar, wind, water, sea-energy, waste, bio-energy I Number of windy days in a year - 245-280 I Average annual wind speed: 5.8 8.0 m/sec I Average number of sunny days in a year 250 I First in the world 5 MW hybrid (solar, biogas, wind, thermal) Experimental Polygon in Gobustan
ICT I Fastest -growing non-oil sector increasing revenues I First satellite to be launched in late 2012 I 65 out of 100 persons are Internet users I New Regional Innovation Zone production of IT equipment and software, establishment of regional Data Centre I Trans-Eurasian Information Super Highway - to bridge the digital divide in Eurasia through constructing a regional internet backbone
Tourism I Unique geografic and climatic conditions I Tourism is on the high agenda of the Government, 2011 - a year of tourism I Number of visitors increased by 14.1% in comparison with 2010 and reached 2.2 mln in 2011 I Well-known international hotels: Hilton, Four Seasons, JW Marriot, Jumeirah, Fairmont and Kempinski I Winter-summer tourism complex in Shahdag to be completed in 2016 and able to welcome 10 000 tourists I Construction of tourism complexes and infrastructure
Baku International Sea Trade Port (in Alat) I 65 km south from Baku, with 400-hectare area to be built in three stages (by Holland s Royal Haskoning) I The multimodal port complex will be completed in 3 years and host a free economic zone and a logistic hub I Will become a transportation hub and tremendously increase transportation from China to Central Asia and Europe I In 2015 the port will be able to serve up to 20 million tons of cargo and 1 mln. containers a year
Sumgait Chemical Industrial Park I Total area: 168 ha I Administration: Sumgait Chemical Industrial Park LLC established within the Ministry of Economic Development I Infrastructure: Offices, training centers, laboratory, etc. with electricity, heating, water supply and other communications will be established I Key benefits: A number of tax and customs incentives as well as concessional loans are considered to be granted in the Park I Production: Petro-chemical derivatives and other priority industrial products will dominate overall production
Balakhani Eco-Industrial Park I Goal: To support and promote recycling businesses, attract foreign investments I Area size: 7 ha I Key benefits I Provide an integrated infrastructure in one location I Reusable and cheap raw material market I Reduction of the environmental impact of the industrial uses by establishing of recycling/reuse and production facilities I Market access for the sale of the obtained raw material or produced goods
Living and visiting Azerbaijan Enjoy local hospitality in 508 hotels over Azerbaijan
Living and visiting Azerbaijan Find out more about history and culture in: I 233 Museums I 29 Theatres Taste traditional food in: I Variety of local restaurants Must-see: UNESCO Heritage Maiden Tower 7-6 cent. BC Qobustan rock carvings
International events in Azerbaijan Take part in the international cultural and sporting events in 2012: Eurovision Song Contest Baku FIFA Women's U17 World Championship Baku International Jazz Festival
Nagorno-Karabakh conflict I In 1989 1993 20% of territories of the Republic of Azerbaijan were occupied by Armenia I The cease-fire has been in force since 1994 I Total refugees and IDPs 1,010,000 I Economic losses of more than 60 bln US dollars
Investment Project
Investment Project www.bakuwhitecity.com
Investment Project
Investment Project
About AZPROMO I Azerbaijan Export and (AZPROMO) was established by the Ministry of Economic Development in 2003 I AZPROMO Vision: Balanced growth of economy I AZPROMO Mission: To sustain economic growth by maximizing the flow of non-oil extraction FDI and development of export oriented sectors I Main directions of activities: Investment and Export Promotion
Policy advocacy + strategy direction Investor servicing + aftercare Image building Investment facilitation Investment generation I Image building marketing campaigns (perception=reality), communication strategy I Investment generation Identification of potential investors, marketing campaigns, presentations, seminars, road shows I Investment facilitation Investment information, site visits, organisation and providing information I Investor servicing + aftercare Helping investors get established and be operational, expansion and re-invest I Advocacy+strategy formulation Advocating for investment friendly business climate, inputs to national FDI policy
Export Promotion Image building / Individual assistance New exporters Entering a new market I New exporters Consultancy, assessment of export capabilities, training and guidance I Entering a new market Market information, legal analysis, price research, trade shows/fairs research I Looking for new customers Search for new business contacts, matchmaking and sector/product events, trade missions Policy advocacy Looking for new customers I Image building Trade shows/fairs, PR activities abroad, outward foreign investment, international relations I Policy advocacy Advice in foreign trade policies and input on export regulations
Foreign Network I AZPROMO Georgia /AZPROMO Austria Mission: Support in development of economic and business relations between Azerbaijan and Georgia as well as European countries through Austrian office I Main activities Market researches and analyses Legal framework Business consultancy Public relations, country promotion I Partners and proxies Membership in the World Association of Agencies (WAIPA) Steering Committee and Regional office for Central Asia and South Caucasus Diplomatic/Trade missions and Chambers of Commerce
Thank you for the attention! Azerbaijan Export and (AZPROMO) 11, H. Abdullayev str., Baku, Azerbaijan www.azpromo.az Tel.: (+99412) 598 01 47/48; Fax: (+99412) 598 01 52 office@azpromo.az