mercoledì, agosto 15

Essence and factors of foreign investments in Azerbaijan: advantages for potential investors

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Article by  Leyla Rashid

Today, the economy of Azerbaijan has favorable conditions for a wide range of transnational corporations of the world and foreign direct investment. External investments are more focused on fuel and energy, so the export potential of these sectors has a certain weight, and this trend is further intensified. The annual growth of foreign investments in the country’s economy shows that the participation of foreign capital in the Republic of Azerbaijan and the development of its activities is a legal, economic and organizational basis. Specially for direct investments a base has been created. First of all, laws and decisions on the protection of foreign property in the territory of Azerbaijan were simplified, and some of them were abolished in accordance with international standards. Among them, specifying normative legal acts, the authority of many national courts and administrative bodies to interfere with the functioning of foreign investment is practically reduced to zero. Information on foreign investments in the economy of Azerbaijan and its leading sectors was expanded. It is especially important to ensure the accuracy and offsetting of the inspection, the effectiveness and flexibility of banking operations and financing conditions at the international level. It should be taken into account that the legal regime of foreign investments in Azerbaijan is mainly regulated by the national legislation of the state. Currently, the leading position in the overall economic policy of the state is the active participation of foreign investment in large volumes. At the same time, the norms of international law and international conventions are also of great importance in this field. It is not accidental that one of the most important aspects of state protection of direct investments in the country is ensuring that their interests comply with all international conditions. In this direction, special attention is paid to the conclusion of bilateral agreements. In bilateral agreements with private equity exporters, especially with the United States, Germany, Japan, France, Britain, Belgium, Switzerland and Italy, the main objective is to protect direct investments from all risks. Both for Italy and for the development of the national economy of Azerbaijan, it is necessary to expand international cooperation and the most important forms of ownership. Italy is a country that can use its advanced technologies and products in other countries and play the role of an economic model. The experience and technology of Italy, which develops in a free market economy, needs Azerbaijan. The first official visit of Azerbaijani President Heydar Aliyev to Italy in 1997 was an important step in the development of relations between Azerbaijan and Italy in all spheres. As a result of the visit, seven agreements on political, economic, cultural and technical cooperation were signed between the two countries. This includes the Treaty on the Protection and Promotion of Investments. The official visit of Azerbaijani President Ilham Aliyev to Italy in 2005 gave impetus to the further expansion of the Azerbaijani-Italian partnership. During the visit of Ilham Aliyev, Italy and Azerbaijan signed new agreements on cooperation in the field of customs, information, telecommunications, sports, culture, municipalities and justice. Agreements in all these areas show the development of Azerbaijani-Italian relations in a wide range of areas. Organizations and firms operating in the country, as well as Italian economic institutions and organizations play an important role in the direction of Italy’s investments in the economy of Azerbaijan. Meanwhile, the Association of Azerbaijani Friends of Central Italy (Associazione “Amici dell’Azerbaigian Centrale Sud Italia”) promotes the cultural heritage of Azerbaijan, traditions, folklore, craftsmanship, natural resources and develops social cooperation programs. The Association simultaneously facilitates trade between the two countries, develops friendly and tourist relations. Guida all’export e agli investimenti in Azerbaijan the company heads exports and investments in Azerbaijan. Italia Europa Asia Consorzio Export The Consulate has a multifunctional business as a tool for exporting Italy to Central Asia, East Asia and the Caspian Sea. As historically, so today Azerbaijan also plays a transit role in access to the East, Asia and the Indian Ocean. The location of Europe and Asia, the desire to establish extensive contacts with the developed countries of both continents, the position puts Azerbaijan on the most important platform of European politics. Italy can strengthen in Azerbaijan and gain economic and strategic advantages in the region. The rich natural resources of Azerbaijan make it important for European countries, including Italy. 9 out of 11 types of climate in the world, the rich natural resources of Azerbaijan and the desire to have them to some extent makes Azerbaijan important for Italy. In addition, the macroeconomic structure of Azerbaijan, which has great potential in the Caucasus and the Caspian region, is the most favorable for such export and investment sectors as hydrocarbons, renewable energy sources, real estate, petrochemical and chemical industries, short metal profiles, transport and construction industries , large metallurgical companies offer a wide range of investment opportunities for Italian investors. Natural medicinal resources of Azerbaijan – mineral waters suitable for the treatment, prevention and restoration of diseases, mud, naphthalene oil, salt lakes, medical climate, beaches, are important for Italian investors or for the organization of new resorts and sanatoriums. The significant development of the oil sector in the economy of Azerbaijan can be explained by the rapid and rapid application of foreign direct investment in this sector. Direct investments in Azerbaijan’s oil projects account for about 60% of all investments in the country’s economy. As a result, the leading international financial institutions of the world: the World Bank, the International Monetary Fund, the Islamic Bank, the Japan Bank for International Cooperation, the European Bank for Reconstruction and Development and other countries made a large amount of foreign investments to Azerbaijan. Although most of Azerbaijan’s non-lending investments go to the oil sector, investments in other sectors, such as construction, transport and communications, trade and services, are also promising. To improve the quality of non-oil infrastructure in the country, it is advisable to direct the following national production infrastructure for foreign direct investment:

improvement of technical and economic indicators of transport infrastructure;

strengthening information and communication infrastructure;

improving the technical base of the infrastructure of public infrastructure and services.

President of the Republic of Azerbaijan Ilham Aliyev, dated April 20, 2016, approved the following areas of economic activity:

  • Sorting and packaging of agricultural products;
  • Transportation of food products by special means (refrejerator);
  • Intensive cultivation of plants;
  • Breeding of cattle (meat and dairy products)
  • Breeding fish by industrial methods;
  • Extraction and processing of metal ores;
  • Food production;
  • production of beverages;
  • Manufacture of tobacco products;
  • Production of textile products;
  • Manufacture of wearing apparel;
  • Manufacture of leather and leather and footwear products;
  • Production of woodworking and woodworking products;
  • Production of paper and paperboard;
  • Production of lubricating oils from the class of refined petroleum products;
  • Production of chemical products (except for the production class of explosive substances SMST 20.51);
  • Manufacture of pharmaceutical products;
  • Manufacture of rubber and plastics;
  • Manufacture of building materials;
  • Production of metallurgical products;
  • Manufacture of finished metal products, except machinery and equipment;
  • Manufacture of computers and other electronic equipment;
  • Manufacture of electrical equipment;
  • Manufacture of machinery and equipment;
  • Production of cars and trailers;
  • Furniture manufacture;

Manufacture of jewelry, musical instruments, sporting goods and medical equipment;

  • production of alternative energy;
  • Construction of tourist services included in the general development plans within the zones of tourism and recreation: 1. Equivalent hotels and accommodation; 2. public catering establishments; Entertainment;
  • Creating accommodation tools “Hostel”.

Italian investors can use these opportunities to invest in these sectors in Azerbaijan or to create new companies.

There are a number of factors that have a positive impact on attracting foreign investors, including Italian investors in Azerbaijan:

  • availability of natural and raw materials;
  • availability of qualified personnel to attract new technologies and technologies;
  • Availability of cheap labor;
  • presence of the internal market;
  • the process of privatization and attraction of foreign investors.

Unlike investors who produce only details and details of new technologies and technologies, Italian corporations and companies can take advantage of the low cost price of intermediate products in Azerbaijan through the use of cheap labor, raw materials and other factors of production. Italian investments in Azerbaijan will lead to closer ties between the two friendly countries and will contribute to the development of Italian-Italian relations. Effective and targeted use of foreign direct investment in the national economy will be a full-fledged stimulus for their participation, a sustainable future for the country, a holistic position in the global economy and integration.

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