AZERBAIJAN - Economy
President, Azerbaijan Export and Investment Promotion Foundation (AZPROMO)
Rufat Mammadov graduated from Baku State University with a degree in International Law and holds a Master’s in European Integration Law from the Dresden University of Technology (Germany). Prior to joining Azerbaijan Export and Investment Promotion Foundation (AZPROMO) in 2012, he held various positions in the private and public sectors in Azerbaijan, primarily in the fields of legal and business consultancy, corporate and project management, business development, as well as trade and investment.
Every year, we organize various international business and investment forums, sporting events, music contests, and international trade exhibitions. In a competitive world, these events are an important way to raise the profile and awareness of Azerbaijan amongst key business decision makers. The portfolio of events to be held in Azerbaijan shows that our country has the necessary attributes to attract FDI in non-oil sectors. Our hosting of the World Economic Forum 2013 in Baku is evidence of our sincerity to offer an attractive business environment. Although we are a young country with only 24 years of independence, the hosting of the first European Games will put Azerbaijan in the exclusive company of countries that have hosted a complex event such as the Olympics. Additionally, the forthcoming Asian Development Bank AGM in May 2015 will be held in Baku, with 3,000 key decision makers from business, government, and international organizations. For many, it will be their first time in Azerbaijan , and I am convinced they will leave Baku with a better understanding of what Azerbaijan has to offer, and reduce their perception of the risks of investing. Our country recognizes that investors have a choice when they are investing and our international events will show to the investor that Azerbaijan is the right choice for them.
The Games have provided opportunities for international business to expand into new markets, and demonstrate their products and services using the stage of Baku to broadcast to the whole of Europe. In particular, significant business opportunities have been provided in construction, infrastructure, tourism, services, and many other areas. Foreign investors working with Azerbaijani companies and people have created impressive venues around the country for the long-term benefit of the country. In 2014, the value of these foreign investment opportunities was $11 billion. Like previous international events, we expect the Baku Games to generate an increased awareness of the non-oil investment and trade opportunities available in our country. Whenever I travel overseas, I tell my fellow business travellers that Azerbaijan was at the center of the Silk Road, and was where the Nobel brothers made their fortune that funded the Nobel Prizes. AZPROMO is ready to help these opportunities become a reality, by providing authoritative information, advice on company establishment, and matchmaking to domestic investment projects.
Economic diversification is an important goal for Azerbaijan. Two decades ago, oil and gas was the dominant industry and the most lucrative sector. Today, we have made progress to re-balance our economy. With a 61% share in GDP and average annual growth of 7% to 10%, the non-oil sector has become a driving force of economic development. In recent years, the GDP contributed by the communication services has increased eight-fold, industry has almost tripled, and agriculture has grown by one and a half times. As our economy diversifies, opportunities in agriculture, food processing, machinery, and chemical industries can increase while new technologies, such as pharmaceuticals, IT, space industry, and nanotechnologies have also developed. The construction sector has boomed in recent years, especially in the production of construction materials. The metallurgy industry in Azerbaijan is also being established and new production facilities have been developed with the focus on end product. The services sectors, where a large part of foreign investments have accumulated, have been growing in recent years including in communications, transport, banking, insurance, tourism, and healthcare. Sumgait Chemical Industrial Park (SCIP), Balakhani Eco-Industrial Park, and High Technologies Park provide opportunities for state-of-the-art investment in mentioned sectors of economy. As for exports, 2014 was successful in terms of promoting non-oil exports and discovering new markets. Traditional groups of products for Azerbaijan, such as fresh fruits and vegetables, processed foods, and beverages, as well as chemical and metal products, and articles of light and heavy industries, have huge export potential; for example, exports of fruits and vegetables in 2014 increased by over 16%, chemical products by 33%, plastic products by almost 29%.
In order to achieve our goals, we established a network of representative offices in foreign countries, such as Georgia, Austria, Germany, US, the UAE, and the UK. Our representatives have the spirit of the Azerbaijan office of AZPROMO. They are working hard to create a network between foreign and Azerbaijani companies that is undeniably important in business today. Representative offices are providing us with all the necessary new events and opportunities, which allows us to reach many countries with efficiency. For example, our US representatives actively participated in business events and exhibitions in Washington DC, Chicago, Las Vegas, and other cities during 2014. This shows the important role our representative offices play for us in accomplishing our company’s goals. We have also a network of 71 partners, including investment and export promotion agencies, chambers of commerce, international organizations, and public institutions from 36 countries. In 2014, we signed 15 MoUs with institutions from different countries. We closely cooperate with investment promotion agencies through the World Association of Investment Promotion Agencies (WAIPA)—where we hold the Vice-Presidency—gathering together over 250 national and sub-national agencies from 162 different countries. In terms of the practical implications of these partnerships, these are important in promoting Azerbaijan’s export and investment opportunities. We continuously share experience with our partners in trade and investment promotion, and exchange information on trade and investment. This is important for the understanding of our export and investment potential and the analysis of foreign markets, the organization of various important promotional events, the capacity to find new partners for Azerbaijani companies, to help them to enter foreign markets, and to address any issues. We actively disseminate information on Azerbaijani products to potential buyers and distributors through our partners’ network and invite international companies to invest in the non-oil sector of our economy.
One of the many different mechanisms we employ to increase FDI inflow and stimulate export capacity is the organization of various events such as business forums, B2B meetings, round tables, and road shows, which offer a prominent platform for business to internationalize, promote investment and trade opportunities, establish new contacts, and cooperate with foreign partners. In 2014 alone, we organized 321 meetings and events in Azerbaijan and abroad. Our business forums with traditional trading partners have helped Azerbaijani companies to increase their presence in these markets. To help local producers explore new markets, AZPROMO organized business forums with such countries as France, Montenegro, Vietnam, Cambodia, Switzerland, Spain, Belgium, Malaysia, Canada, the UK, Lithuania, Poland, and Hungary. In addition, our goods were presented at the international exhibitions in nine countries including Germany, the UK, US, and China. At the same time, AZPROMO pays a great deal of attention to education and training, organizing numerous workshops, and trainings on related topics throughout the country in the last year. All of this was supported by market research and free-of-charge services to local and international companies. As a matter of fact, we see excellent results reflected in the figures. Around $11 billion was invested in 2014 in the Azerbaijani economy from abroad. Our exports to new markets, such as Spain, the Czech Republic, France, Hungary, Afghanistan, Switzerland, Canada, Malaysia, Tunisia, Singapore, and many others increased significantly over 2014.
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