(MENAFN- AzerNews)
Nazrin Abdul Read more
Azerbaijan, in its pursuit to reclaim territorial integrity andsovereignty, has launched ambitious projects aimed at sustainablesettlement and economic revitalization in the liberated areas endeavors are supported by substantial state funding andencompass various initiatives, such as tunnel construction inGarabagh and Eastern Zangazur, the development of crucialinternational corridors, the establishment of airports, and theimplementation of diverse industrial projects.
The Great Return Program, dedicated to restoring all liberatedterritories, is making significant progress. Emerging towns,cities, and modern trade hubs in Garabagh and Eastern Zangazurreflect this success, showcasing contemporary urban planning withsmart cities and villages leveraging cutting-edge technologies.
Concurrently, substantial strides are being taken to developindustry and diversify the non-oil and gas sector. This includesthe establishment of competitive modern production facilities tobolster industrial capacity, alongside infrastructure enhancementsand various incentive schemes fostering increased production andsectoral growth.
President Ilham Aliyev's leadership has seen notable effortstowards non-oil sector development and the enhancement of exportpotential. Favorable conditions and the establishment of industrialparks and neighborhoods have enabled Azerbaijan's non-oil industryto produce competitive, export-oriented products, with high-techenterprises in industrial zones playing a pivotal role,particularly in polymers, rubber, cables, and aluminum-basedproducts.
Amidst rapid construction and reconstruction in long-occupiedregions, extensive economic recovery and reintegration measures areunderway in Karabakh and Eastern Zangezur. The focus on restoringKarabakh's industrial potential contributes to economicreintegration and employment generation. Notably, industrial parksin Agdam and the "Araz Valley Economic Zone" in Jabrayil districthave been established, fostering favorable conditions forentrepreneurial ventures and business activities.
In these designated zones aimed at reviving business activity,favorable conditions have been established to facilitateentrepreneurs' access to various concessions, thus stimulatingbusiness growth.
In his comment to Azernews on the issue,economic expert Rashad Hasanov highlighted that within a year,enterprises in these zones collectively produced products valued atfour billion manats.
He emphasized the significant contribution of completedinvestment projects in industrial parks and districts to theeconomic growth of Azerbaijan, particularly in the processingindustry. Hasanov pointed out that around 50-55 percent of theproducts manufactured in these zones are directed towards exports,significantly impacting the expansion of non-oil exports. Notably,industries such as polymer, rubber, cable products, andaluminum-based products have seen substantial growth inexports.
Hasanov projected that with the commencement of operations byresidents in the upcoming years, these industrial zones willcontinue to play a vital role in economic development, particularlyin export activities. He highlighted ongoing processes in twoindustrial parks in the liberated territories, emphasizing thepotential influx of new residents and businesses in the nearfuture, along with the opportunity for entrepreneurs to leveragevarious benefits.
Aghdam and the "Araz Valley Economic Zone" industrial parks,along with other existing industrial parks nationwide, offer aconducive investment environment for entrepreneurs. Residents areprovided with pre-built infrastructure at state expense and areexempted from property tax, land tax, income or profit tax for adecade from registration, as well as VAT during the importation ofmachinery and customs duties for ten years.
Moreover, recent amendments to the Tax Code, effective fromJanuary 1 of this year, introduce additional benefits forentrepreneurs operating in liberated territories. These includesubsidies for social insurance fees, granting extra vacation daysto professionals residing in liberated territories, monthly salarysupplements, a one-time allowance, simplified work permitprocedures, and exemption from labor migration quotas for foreignspecialists.
Additionally, entrepreneurs engaged in production activities inthe liberated territories will receive financial assistanceequivalent to 20 percent of their monthly utility service paymentsfor ten years.
Hasanov stressed that these concessions would further optimizeproduct costs, thus enhancing the competitiveness of domesticallymanufactured products in foreign markets.
He also noted the importance of modern technology infacilitating competitive product manufacturing and emphasized thatwhile technology plays a crucial role, price competitivenessremains equally significant.
Looking ahead, Hasanov highlighted the potential for creatingnew industrial zones in liberated territories, particularly inKhankendi, Kalbajar, and Zangilan, where favorable conditions existfor attracting investments and establishing infrastructure tosupport industrial development.
Khankendi boasts both the potential and infrastructure formanufacturing light and heavy industrial products, making it anideal location for establishing an industrial park in this sector, experts suggest that Kalbajar could host anindustrial park focusing on the food industry.
However, it's crucial to consider the long-term impact alongsideshort-term gains. While industrial zones may stimulate the economyinitially, over-reliance on them could potentially limit overalleconomic competitiveness. Maintaining a balance, especiallyconsidering Azerbaijan's relatively small market size, should be apriority in industrial zone policies. Nonetheless, exploring newapproaches to expand this sector remains an option worthconsidering.
Rashad Hasanov also highlights the significant role of thetourism industry in the economic development of liberatedterritories. Predictions suggest that the share of tourism servicesin these regions could increase by 3-3.5 times compared to the maineconomy. To harness this potential, creating specialized zones suchas tourism-free zones and tourism recreation areas becomes crucial numerous tourist centers and recreational zones alignswith long-term goals, aiming to bolster service exports andeffectively utilize the region's resources.
Currently, Azerbaijan operates seven industrial parks (includingthe "Araz Valley Economic Zone" in Sumgayit Kimya, Garadag,Pirallahi, Mingachevir, Balakhani, Aghdam, and Jabrayil districts)and five industrial districts (Hajigabul, Masalli, Neftchala,Sabirabad, and Sharur).
Notably, the Agdam Industrial Park, covering 190 hectares, wasestablished by the decree of the President of the Republic ofAzerbaijan on May 28, 2021. Similarly, the "Araz Valley EconomicZone" was created by a decree on October 4, 2021, spanning an areaof 200 hectares. Both industrial parks have undergone completedemining operations, and mobile settlements have been set up toensure the comfort of residents.
According to the Economic Zones Development Agency, since 2013,142 business entities have been granted resident status inindustrial zones, with a total investment volume of 7.79 billionmanats. Entrepreneurs have injected over 6.7 billion manats intothese zones, generating more than 10,500 permanent jobs. Movingforward, an additional 1 billion manats will be invested inindustrial zones, creating over 6,500 new jobs in the next phase ofexisting projects.
In the first quarter of 2024, industrial zone residents recordedproduct sales totaling 640.3 million manats, with exports amountingto 223.6 million manats. Notably, sales by industrial parkresidents surged by 20.6 percent last year, with exports increasingby 10.8 percent.
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