Our Analytics 15 september — 13:26

Radical theses of Ilham Aliyev (Following President's speeches)

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BY ECONOMY SECTION

At the opening meeting with the newly appointed heads of Shamkir and Jalilabad districts, President Ilham Aliyev expressed a number of radical theses that lay the outlines of subsequent reforms of the government system in the regions: from systematising public control and civil initiatives to mechanisms for creating a positive investment climate in small and medium-sized businesses in rural areas.

Azerbaijan has been occupying high positions in the Doing Business rating for several years in a row (for example, 9th place in terms of the ease of registering a business in the DB 2020 report). This is mainly the result of digitalisation, the launch of the one window system, modernisation of the rules for the relationship between government and society in Baku, the Absheron region.

Ilham Aliyev calls for returning funds to the economy

It's another matter when we move to the applied plane of the realities of the regions of Azerbaijan. The ratings, to put it mildly, do not reflect the situation.

Take such a channel of investment as private transfers from those working abroad to their households, that is, home, to their families. The most voluminous source are transfers from Russia. They are made by different categories of citizens: from the transfer of monthly Russian salaries to their relatives at home, to regional and rural settlements, to the return of funds for the purchase of agricultural products made earlier from their own or neighbouring farms.

If we take the indicators of the first half of 2021, then the transfers amounted to $260.971 million. Not a small amount, and, by the way, more by 32.5% compared to last year. There is a growth trend. Therefore, of course, conditions must be created for the return of these funds to the economy through investments in business.

But how?

It should be as easy as possible, affordable, not subject to taxes on the purchase of equipment. Conditions are needed for a massive free start of a family business, not burdened, for example, by problems with connecting to the electricity grid. In Azerbaijan, in order to connect to the electricity grid, it is necessary to go through 7 procedures, which will take 41 days, while the costs can be 125.7% of the country's per capita income.

But small businesses are often household consumers who operate as extended family businesses.

There are many examples of such small formats: cheese dairies; dehydrator ovens making dried fruits and chips; juicer and juice preserving machines and so on.

Moreover, modern series of such installations have quite household dimensions, characteristics and cost. There is no longer a need to build workshops, erect hangars, as fifteen years ago.

All of this activity can be of the private nature of a small business. The main thing is not to interfere with this.

Aliyev said bluntly: the tenders are won by people close to the administrations leadership!

But it is far from uncommon when the opposite happens. Aliyev said bluntly: the tenders are won by people and companies close to the administrations leadership. The second set of problems also stretched out over decades. Let us quote the President: '...in a number of cases, a person who wants to work faces problems, some unreasonable demands are made to him, they try to get a share from him, and the offended entrepreneur leaves without creating either jobs or an enterprise... The entrepreneur must be sure that he will only pay the state tax, that's all...'

We hope that the President will be heard not only by the newly appointed heads of the executive authorities, but also by other officials.

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