Page 94 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.77, # 1, 2020, pp. 92-99

light industry are that low capital and manual labour is required to drive production.
Although Azerbaijan has heavily invested in the establishment of industrial facilities
and parks, the majority of established industrial enterprises remain inefficient.
Azerbaijan has chosen “import substitution” to support industrialization. However,
this strategy extensively used by the least developed countries of Latin America and
Africa between 1930s and 1980s have failed to produce outcomes.

The development of small and medium-sized businesses (SME) and their export
potential remains a third essential section of non-oil export sector. SMEs around the
world are at the core of the economy and have a vital role in the job creation.
Support for entrepreneurship in Azerbaijan has been supported by the Strategic
Roadmap which includes several activities for SMEs including the establishment of
a centralized SME agency, the establishment of clusters, the development of
business incubators as well as start-ups (2016: 5). Moreover, the development of
innovations and technologies in Azerbaijan has been reflected in the key strategic
maps of the country’s economy to increase productivity and competitiveness in
various sectors of the economy. The government believes that innovation-driven
development should cover all sectors (Babayev, 2019: 140; Babayev and Hajiyev,
2019: 312).

FINDINGS AND DISCUSSION
Azerbaijan enjoys an enormous potential for the development of agrarian, industrial and
manufacturing sectors. Moreover, one of the great advantages of Azerbaijan is its
geographical vicinity to the CIS countries and Russia, which are in great demand for
agricultural products. Every region in Azerbaijan differs almost exclusively by specific
agricultural products. Cultivation of a diverse range of agricultural products provides great
opportunities for entrepreneurs who manufacture these products. Azerbaijan pays great
attention to the establishment and development of agricultural manufacturing facilities.
Exports of agricultural products are not sufficient. However, they provide a significant
portion of the country's employment. After the reconstruction of the Ministry of
Agriculture, this sector experience a serious revival and great attention is paid by the state.
However, the export indicators are still low due to the small size of the country, low
productivity, and failure of farmers to meet the qualitative and quantitative demands of
foreign buyers. The involvement of SMEs in agrarian sector can contribute to this sector.
With all this in mind, Azerbaijan’s non-oil export sector has several objectives to boost its
agricultural output. The first is to increase agricultural productivity through the use of
innovations and minimize costs and procedures for companies to enter the world market.
It also includes tax privileges, subsidies, low-interest loans, and elimination of restriction
of imports.

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