(MENAFN- AzerNews)
Qabil Ashirov Read more
The competition between the liberal economy in the West which
was dominated by SMEs and the centralized economy in the USSR which
was made up of big and mega enterprises resulted in the victory of
formers after 70 years. It was not just a competition between the
two ideologies which were totally opposite each other, but also a
means to prove some economic theories.
As is known, the Soviet Union established mega enterprises which
employed thousands of people. However, in Western countries, SMEs
dominate in economy. They witnessed several economic crises and
stagnations but they were able to surmount both problems. In
comparison, for example, an economic collapse in a country in the
West has subsequently spurred that country's rise. However, this
development did not have a positive effect within the Soviet Union.
One crisis in 70 years was enough to dismember the big country into
15 places. It proved that SMEs are more flexible and viable than
big enterprises. They can handle risks more easily and find ways to
continue production but big enterprises do not have such luxuries.
For example, most of the former Soviet mega enterprises have not
been able to re-establish.
So, Azerbaijan has taken a lesson from the fate of the former
USSR which the country was a part of it. The country pays special
attention to the establishment and development of SMEs and they are
an important source of employment, but their full potential remains
untapped.
It has implemented several projects so far. One of such projects
was held by Azerbaijan's Labor and Population Social Protection
Ministry and it was called self-employment. Through this project,
the government granted equipment to establish workshops worth up to
AZN 10,000. Besides, the Ministry hosted training how to establish
a business and how to use the equipment. With the help of this
project, hundreds of workshops were established and thousands of
people were provided with permanent jobs. Thanks to this project, a
revival was observed in the service and textile sector in a short
period of time. The project covered rural areas as well. The
Ministry granted animals and equipment to manufacture dairy
products.
Besides, the Government established a public legal entity called
ABAD - Ailə Biznesinə Asan Dəstək (Easy Support for Family
Business) on September 23, 2016 under the State Agency for Public
Service and Social Innovations. ABAD started as a pilot project
with 7 family farms in Masalli, Azerbaijan. Currently, the number
of families included in the support program has exceeded 553 .
Based on the order, a tranche of 1,000,000 manats was received
for the establishment of ABAD . Since the project is a public legal
entity, it operates on a self-financing system. Support and
construction of new centers is carried out thanks to funds
allocated by donors and partners.
ABAD support program includes various services. This includes
services such as marketing, branding, design, accounting services,
equipment supply, legal assistance, transportation, packaging,
logistics, one-stop certification and end-of-sale arrangements. In
addition, a bank account and TIN are opened in the name of the
ABAD, and when the sale takes place, the funds are transferred to
the ABAD's bank account. If necessary, through our donors and
partners, "ABAD" members can be given equipment or preferential
microcredit.
In addition, in December 2017, Azerbaijan established the Small
and Medium Business Development Agency of the Republic of
Azerbaijan (abbreviated: KOBIA ). It is a public legal entity that
supports the development of micro, small, and medium businesses
(SMEs) in the country and it provides a number of support and
services to entrepreneurs, and coordinates and regulates the
services of state bodies in this field. It provides grants and
market research. Besides, KOBIA holds training for entrepreneurs to
start businesses and to write business plans. Providing business
credits with little interest is among the future plans of
KOBIA.
It is worth noting that since 2018, Azerbaijan has made
significant efforts to boost SME development through the
establishment of its KOBIA, a major milestone towards
systematically delivering tailored support for SMEs. The agency
provides its services in Baku and across the country through 21 SME
Development Centres.
Despite all the efforts of Azerbaijan, SMEs encountered big
problems during the COVID-19 pandemic. However, as we told above,
SMEs were able to overcome the emerging problems. Thus, COVID-19
has given renewed urgency to strengthen SME support with a
particular emphasis on promoting digitalization. In response to
lockdown measures, many SMEs turned for the first time to digital
solutions and experienced the benefits digital tools can bring to
boost company performance and strengthen productivity growth. On
average, 66% of SMEs in Azerbaijan started or increased their
online business activity and 37% started or increased remote
work.
Generally, in 2020, Azerbaijan's SMEs generated 42% of total
employment but contributed to only 17% of value added (24% in the
non-oil sector). Their overall contribution to economic development
is significantly lower than in OECD countries where SMEs account
for about 53% of value-added and 65% of employment.
So, Azerbaijan intends to increase economic activity in the
country through SMEs. For this purpose, the country does it is best
and has started to reap the yields of its effort. The country
provides help to the startups via several different organizations
and no doubt the number of organizations will enhance.
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