Doha: Azerbaijan is looking to form Joint Venture (JV) projects with business in Qatar Chairman of the Board of Small and Medium Business Development Agency of Azerbaijan H E Orkhan Mammadov has said.
The Chairman of the Board of Small and Medium Business Development Agency of Azerbaijan, Orkhan Mammadov, speaking to The Peninsula during an exclusive interview held at the Four Seasons Hotel in Doha yesterday. Pictures: Salim Matramkot / The Peninsula
In an exclusive interview to The Peninsula, Mammadov said that Small and Medium Enterprises (SMEs) from Qatar and Azerbaijan can contribute significantly to growth of bilateral relations between the two countries. He said that ‘Azerbaijan Trade House’ will be established in Qatar next year.
“As SMEs constitute the vast majority of business entities in both countries, they have huge opportunities to contribute to growth of business ties between Azerbaijan and Qatar. We want to see creation of joint ventures and implementation of joint projects with participation of business people from both countries. This is real and practical cooperation that we hope can benefit businesses in both countries,” Mammadov said.
Sharing more details about opening Azerbaijan Trade House in Qatar, he said it is planned to be opened in the first quarter of next year. “We are looking at promoting products from Azerbaijan in Qatar. We have been discussing the establishment of Azerbaijan Trade House here in Qatar, which would be a good avenue to demonstrate, promote interest in our products,” he said.
“There is also possibility for establishment of cluster companies with the participation of Qatar companies in Azerbaijan. It would also act as further evidence of the strengthening ties between our countries. We can work together with our Qatari counterparts to implement joint mechanisms creating opportunities for business cooperation,” Mammadov added.
Replying to the question about which are the sectors in Azerbaijan that offer growth opportunities to SMEs of Qatar, he said that in addition to digital and green economy, there are traditional sectors of the economy with natural comparative advantages.
Transport, logistics, chemistry, telecommunication, agriculture, processing, tourism and other sectors are better poised to attract foreign investors. Government has determined those sectors as the priority areas for supporting economic growth and employment in the wake of post-pandemic recovery.
“So, using the opportunity, we are inviting more Qatari companies to come and invest in Azerbaijan. Azerbaijan has vast economic potential and I’m confident that each Qatari company will easily find areas for conducting business operation,” he said.
Praising growth prospects, he said that Qatar is interesting investment destination for Azerbaijani businesses. Sectors like healthcare cosmetics and fitness, water, manufacturing, chemicals and ICT in Qatar offers opportunities for growth for Azerbaijani companies and investors.
“Qatar is an attractive country in terms of investment. Especially, over the last years, considerable efforts have been made for channeling foreign investment in the non-oil sector of the country. In this regard, Qatar is also interesting investment destination for Azerbaijani businesses. Sectors like healthcare cosmetics and fitness, water, manufacturing, chemicals and ICT present a host of investment opportunities,” he said.
“Our aim is to facilitate the cooperation of SMEs between our countries to be able to harness the existing economic potential. Different business missions, roadshows and trade representatives can contribute to further increase of business ties between Azerbaijan and Qatar,” Mammadov added.
He said that the purpose of his current visit is to identify areas for future cooperation and he is looking forward to making the initial cooperation with Qatari counterparts, including the Chamber formal in the near future.
“We signed a Memorandum of Understanding with the Qatar Development Bank earlier this year at the Saint-Petersburg International Economic Forum. In the near future we are also planning to sign an Action Plan, which envisages cooperation through information and experience exchange, capacity development, joint participation in the events, participation in incubation and acceleration programs,” he added.
Talking about organising joint exhibition or exchange programme between Qatari and Azerbaijan’s SMEs, he said that this is something he is interested in and would like to cooperate with the Qatari counterparts. We have positive experiences of implementing these initiatives with other countries and I am sure we can use this experience and apply it here as well, he added.
The number of SME legal entities is above 140,000 in Azerbaijan. Moreover, more than 1 million individual entrepreneurs have also been registered. Overall, about 99.6 percent of enterprises operating in Azerbaijan are micro, small and medium businesses, of which micro enterprises comprises 93 percent. SMEs are mainly concentrated in trade, construction, agriculture, processing, logistics and other sectors of the economy.
He said that Azerbaijan enters new stage of strategic development covering 2022-2030 years. The period characterized with the restoration of territorial integrity, makes it necessary to drive more sustainable sources of economic growth, further improve innovative development and financial sustainability of the national economy. In this period, digital and green economy will be main areas of focus. Moreover, restoration and rebuilding of liberated territories of Azerbaijan and resettlement of IDPs will be the priorities of the Government strategic agenda in years to come. About 30 years of occupation, Armenian forces carried out massive and total destructions. “So, the Government of Azerbaijan is going to restore infrastructure facilities and revive the economy in the Karabakh and surrounding regions of Azerbaijan. Qatar companies can participate in business and investment projects to be implemented in those areas,” he said.
He explained that Board of Small and Medium Business Development Agency has experience in helping foreign investors set up their operations in Azerbaijan. To help identify local partners we have access to a large network of enterprises. “Our SME Friends network, which are special envoys of the Agency in regions(currently 28) can help identify business opportunities and local partners. Furthermore, we have close relationships with business associations. As an example, 15 business associations covering more than 100 businesses are members of our Public Council, so this is another avenue for us to help promote partnerships,” he said.
He said the suitable geographic location of Azerbaijan provides an easy access to other regional markets, such as Russia and Turkey. Necessary legal, regulatory and institusional framework has been established to protect and promote private, especially foreign investment in Azerbaijan. Some of the aspects of the enabling investment climate include, equal rights and opportunities for all investors (which ensures no discrimination), strong investor protection policy and legislation (foreign investor protection law), compensation for damages and loss, ensured repatriation of profits, low regulatory burden, limited price control, over 400 e-services for businesses (making setting up and running a business a relatively easy process) and competitive tax regime (corporate tax rate about 20 percent). Moreover, Qatari companies can also benefit from services of directly provided by SME Development Agency, as well.
Different thematic Industry Parks and Alat Free Economic Zone also offer incentives for companies to operate in Azerbaijan.
He emphasised that over the past years, under the leadership of the President of the Republic of Azerbaijan, strategic policy reforms and dedicated measures have been carried out aimed at increasing competiveness of the national economy, improving investment and business climate in the country and stimulating development of SMEs. Business support and promotion organizations have a great role to play to further facilitate recovery and development of SMEs.
