Page 97 - Azerbaijan State University of Economics

Bahruz Babayev: Main Directions of the Non-Oil Export Sector in Azerbaijan
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competitive environment. The most important factor that contributes to the success of
local companies in international competition is the competition existing in the national
economy and the state’s role as a facilitator (Robert, 1991: 535-548). This could
include improving legislation, enhancing the competitive environment, maximum
simplification of the regulations for doing business and financial openness.

The prerequisite for improving the export potential in the non-oil sector including in
the manufacturing, industrial, and the agricultural, is to invest in improved business
conditions, financial openness and infrastructure, which serves to build confidence of
local and foreign investors to return the investment. The main incentive for investors
to do this is to reduce the cost of doing business and share this information with
entrepreneurs in a simple way. There are so-called “transaction costs” for business
people entering the market, which include the needless and information costs that
prevent entrepreneurs from entering the market. If the government takes care these
costs through simplification of business climate regulations for businesses, the number
of companies that want to invest will be tripled. It is important to create a portal that
will encourage foreign businesses to invest in the Azerbaijan’s economy, agriculture
and industry, as well as enable businesses to register online, open a bank account and
easily explain business rules in Azerbaijan. The state must eliminate its role in the
private sector that interferes with its development.

At last, funding support should be provided to startups and small businesses through
the Entrepreneurship Support Fund and other agencies. The involvement of
consolidated banks in this sector could improve the industrial landscape. The overall
analysis of the strategic roadmaps allows us to conclude that the Government of
Azerbaijan understands the economic problems of the non-oil sector and regions in
the economy, implements sustainable programs to address them, creates new
flexible state structures and invests heavily in all sectors of the economy. However,
most strategic documents connected with economic development are characterized
with activity drivenness rather than result-orientedness. The main government
agencies that are responsible for the implementation of the reforms and the
implementation of the maps should be built on more efficient and flexible
mechanisms and should be accountable for the results. The result based audits must
be conducted. The presence of an effective public management is one of the factors
that positively impact business operations. The new institutional economy stresses
the role of the state in the economy as a regulator. This policy has been the core of
the World Bank, World Trade Organization and International Monetary Fund
policies for many years in developing countries.

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