NATIONAL BUSINESS AGENDA Sabit Bagirov Entrepreneurship Development Foundation.
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Transcript of NATIONAL BUSINESS AGENDA Sabit Bagirov Entrepreneurship Development Foundation.
NATIONAL BUSINESS AGENDA
Sabit BagirovEntrepreneurshipDevelopment Foundation
23.02.2009 Sabit Bagirov2
Developing of private entrepreneurship in Azerbaijan
Private entrepreneurship has been developing in the country after it regained its independence in 1991. This was furthered by: the policy of switching from the soviet economic system to a
market economy; the programs related to this policy; the measures to adopt new laws; creating market institutions; macroeconomic stability; large-scale foreign investments in energy and other spheres of the
economy; privatization of small and medium-sized enterprises and land; other measures.
23.02.2009 Sabit Bagirov3
Developing of private entrepreneurship in Azerbaijan
Today there are more than 60 thousand private companies in the country – small, medium-sized and large. Small enterprises account for 20% per cent. Moreover, entrepreneurial activity without setting up a legal entity is quite developed. There are more than 260 thousand such businessmen in the country today.
The share of the private sector in GDP is 84 per cent today (including the activity of foreign oil companies).
There are more than 10 large private companies in the country which have their own well-known brands.
23.02.2009 Sabit Bagirov4
Developing of private entrepreneurship in Azerbaijan
In 2008 the government implemented a “one-stop-shop” principle for the registration of legal entities. The effectiveness of this decision is obvious. In the first six months, the number of registered enterprises increased by 30 per cent.
The same principle is used in Custom from January 1 2009.
23.02.2009 Sabit Bagirov5
Developing of private entrepreneurship in Azerbaijan
The electronic system of tax payment has also been actively developing over the past year. According to the results of a sociological poll conducted among 1,000 small businesses in May-July, 34.4 per cent of are already using the electronic system of tax payment. Another 22.7 per cent intend to start using the electronic payment system in the near future.
23.02.2009 Sabit Bagirov6
Developing of private entrepreneurship in Azerbaijan
Over the past year, a number of important amendments to the labor law have been adopted as well, the system of registering rights to own real estate has been developing and the situation surrounding the credit registry.
23.02.2009 Sabit Bagirov7
Developing of private entrepreneurship in Azerbaijan
All these measures allowed Azerbaijan to become a leader by the number of reforms carried out in the country in the “Doing Business in 2009” report by the World Bank and the International Finance Corporation.
23.02.2009 Sabit Bagirov8
Developing of private entrepreneurship in Azerbaijan
At the same time, the latest surveys, carried out by WB (Governance Indicators), EBRD, ADB, WEF, the Fraser Institute of Economics, the Heritage Foundation, the Transparency International and other internationally-recognized institutions and consultancy organizations, as well as national organizations such the Entrepreneurship Development Foundation, there are considerable reserves for the further development of the business climate in Azerbaijan.
23.02.2009 Sabit Bagirov9
National Business Agenda for 2009
The document was drawn up by the Entrepreneurship Development Foundation (EDF). The proposals were prepared within the framework of the Project “Improvement of the Business Climate in Azerbaijan”, financed by the Center for International Private Enterprise (CIPE, Washington, DC).
NBA can be find at: www.edf-syf.org
23.02.2009 Sabit Bagirov10
National Business Agenda for 2009
While preparing the proposals included in this document, EDF carried out a number of surveys, including: a survey among 1,000 representatives of small businesses; the deep interviews with business-leaders and some of
government bodies; analysis a number of laws and legal acts that regulate business; activity in Azerbaijan.
Moreover, EDF analyzed recommendations from world institutions and the experience of a number of transitional economies.
23.02.2009 Sabit Bagirov11
The survey among 1,000 representatives of small businesses. The geography of the survey.
Participants % Baku 500 50 Barda 32 3,2 Guba 41 4,1 Ganja 83 8,3 Khachmaz 42 4,2 Lankaran 34 3,4 Мingechevir 31 3,1 Shamakhi 31 3,1 Sheki 51 5,1 Shirvan 52 5,2 Sumqayit 83 8,3 Yevlakh 20 2,0
Total 1,000 100,0
23.02.2009 Sabit Bagirov12
The survey among 1,000 representatives of small businesses. Composition of respondents:
Legal entities - 61,6 %
Private individuals - 38,4 %
23.02.2009 Sabit Bagirov13
1. How do you assess the current economic situation for your business?
Quite favorable
4.5%
Favorable35%
Neither good, nor bad
37.2%
Unfavorable19.8%
Quite unfavorable
3.1%
Don't want to answer
0.4%
23.02.2009 Sabit Bagirov14
2. What are your plans regarding the recruitment of new employees in the next six months?
To reduce the number of employees
7.8%
To maintain the number of employees at
the same level62.7%
Don’t know/don’t
want to answer3.6%
To increase the number of
employees25.9%
23.02.2009 Sabit Bagirov15
3. Are you planning to expand your business in the same sphere or in any other sphere?
Yes, within six months14.4%
Yes, within a year
22.9%
No50.6%
Don’t know/don’t
want to answer7.4%
Yes, within three months
4.7%
23.02.2009 Sabit Bagirov16
4. How often are you visited by someone from government agencies
At least once a week4.8%
At least once a month39%At least once in
six months19.3%
At least once a year9.2%
They have not visited me yet
21.4%
Don’t know/don’t want
to answer6.3%
23.02.2009 Sabit Bagirov17
7. How do you assess the conditions for competition in the sector of the economy in which you work?
Don’t know/don’t
want to answer
7.3%
Fair63.5%
Unfair29.2%
23.02.2009 Sabit Bagirov18
19. Have you had to apply to the State Fund to Support Entrepreneurship for a loan?
Yes9%
Don’t know/don’t want
to answer0.1%
I have never heard of such a
fund14%
No76.9%
23.02.2009 Sabit Bagirov19
23. How accessible a commercial loan in a bank?
Quite accessible (without any
bribes to employees of the
bank)24.6%
Quite accessible (after giving a
bribe, backhanders and
so on to employees of the
bank)26.1%
Not accessible enough25.4%
Inaccessible13.2%
Don’t know/don’t want to answer
10.7%
23.02.2009 Sabit Bagirov20
24. Do you think you are protected from officials’ arbitrariness?
Yes22.4%
To some extent40.1%
Don’t know/don’t want
to answer1.8%
No35.7%
23.02.2009 Sabit Bagirov21
26. Do you use the opportunity to pay your taxes electronically?
Yes34.4%
Not yet, but I am going to
22.7%
Don’t know/don’t want
to answer3.1%
No, there is no need for that
39.8%
23.02.2009 Sabit Bagirov22
39. Name the measures that the state needs to take in order to accelerate the development of private business in Azerbaijan (Choose no more than five answers)
643
531
509
396
376
315
272
31
0 100 200 300 400 500 600 700
To reduce tax payments
To improve the crediting of business
To protect business from groundless checks
To increase anti-monopoly control
To reduce corruption
To reduce social payments
To facilitate customs procedures
Don’t know
Number of respondents
23.02.2009 Sabit Bagirov23
41. In conclusion, assess the business climate in the country as a whole, not just with regard to your own business
Good16.9%
Satisfactory56.7%
Don’t know/don’t want
to answer2%Unsatisfactory
24.4%
23.02.2009 Sabit Bagirov24
The survey among 1,000 representatives of small businesses
The full information about the survey among 1,000 representatives of small businesses can be find at:www.edf-syf.org
23.02.2009 Sabit Bagirov25
National Business Agenda for 2009.www.edf-syf.org
52 recommendations on 14 directions:
1. Institutional reform 2. The introduction of European definitions of small businesses 3. Regulatory reform 4. The improvement of the tax regime 5. Reform of the licensing system 6. Improvement of property registration system 7. The creation of an effective information system 8. Reform of the system of various approvals and construction permits9. The development of the infrastructure of small businesses 10. Tightening of punishment measures for non-accounting commercial activity 11. Streamlining of inspections 12. To ensure the supremacy of the law and fairness of the courts 13. Improvement of foreign trade procedures 14. Social corporate responsibility: from coercion to encouragement
23.02.2009 Sabit Bagirov26
NBA was presented to the president of Azerbaijan
23.02.2009 Sabit Bagirov27
World Economic Crisis and its challenges for Azerbaijan
The global economic crisis while had insignificant influence on a situation in Azerbaijan.
The basic reasons:1) Low level of integration in the global financial markets;
2) Structure of the goods of foreign trade;
3) Currency stocks of the country;
4) Insignificant external duty;
23.02.2009 Sabit Bagirov28
World Economic Crisis and its challenges for Azerbaijan
The following tendencies are observed:
Decrease of the budget incomes; Decrease of the Oil Fund incomes; Decrease of the FDI; Decrease of state and local private companies investment; Decrease of volume of currency transfers from the citizens of Azerbaijan
working abroad; Decrease of volumes of export non-oil goods; Decrease of volumes of consumers crediting; Insignificant devaluation of national currency; Decrease of the domestic production on a number of the enterprises. As a
consequence - dismissal of the workers and sending them in long no-charge vacation;
others