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Nazrin Abdul
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In 2024, Azerbaijan declared "The Year of Solidarity for a Green
World" and hosted prestigious events like COP29, underscoring the
relevance of the green economic concept.
The Agency for the Development of Small and Medium Enterprises
(KOBIA), under the Ministry of Economy, plays a crucial role in
enhancing the role of SMEs in green economy initiatives. Until
2030, the agency supports the development of alternative energy in
Azerbaijan within the framework of national priorities.
KOBIA actively promotes the participation of companies engaged
in green energy, recycling, and circular economy sectors at various
local and international exhibitions, thus fostering their
activities.
Small and medium enterprises (SMEs) play a significant role
across various sectors of the economy. In recent years, we have
witnessed the development of SMEs in the green economy sector.
In his comment to Azernews on the issue, economic expert Khalid
Karimli highlighted the high value of SMEs in employment,
emphasizing that such businesses play a pivotal role in economic
growth.
"SMEs primarily contribute to solving employment issues and play
a crucial role in exports. They are involved in addressing social
issues within the economy. The Azerbaijani government provides
incentives to micro and small entrepreneurs, including those
operating in technology parks. For instance, special tax-free
regimes have been established for entrepreneurs in the Alat Free
Economic Zone," the expert noted.
It should be noted that the support and services provided to
SMEs cover the entire process from business establishment to
development. This includes various tax and customs incentives,
infrastructure support, institutional support measures, favorable
credit, subsidies, and more. The Agency for the Development of
Small and Medium Enterprises (KOBIA) focuses on enhancing state
policy in the sector, improving the effectiveness of implemented
measures, and ensuring institutional support to facilitate the
creation of new SMEs and support the development of existing
businesses.
Additionally, the Medium-Term Socio-Economic Development
Strategy, prepared within the framework of "Azerbaijan 2030:
National Priorities for Socio-Economic Development," identifies
small and medium entrepreneurship as a strategic goal to become a
major source of economic growth and employment in the country.
The Economic Priorities Act, approved by the Cabinet of
Ministers' Decision dated February 5, 2024, provides for continued
support for SMEs in accordance with the list of priority areas of
the economy, government priorities in entrepreneurship, and
international calls related to SMEs.
According to Khalid Karimli, small and medium businesses can
support green economy efforts by addressing their business
challenges, increasing resource efficiency, and minimizing
environmental impact to support sustainable economic growth.
"In the field of renewable energy, SMEs can compete with large
corporations, but they cannot play a driving role in this sector,"
the expert added.
"SMEs can also play a role in employment, solving social issues,
and addressing the government's ecological problems through tax
payments. These businesses can contribute to sustainable economic
growth by ensuring environmental cleanliness in their operations
and efficient use of resources," the expert stated.
It should be noted that overall, ESG (Environmental, Social, and
Governance) principles are at the forefront of KOBIA's attention.
The E component evaluates how conscientiously a company treats the
environment, including its corporate climate policy, energy use,
waste management, and measures to conserve natural resources. The
other two components of ESG, S and G, cover the company's relations
with employees, suppliers, and customers, the application of
accurate and transparent accounting during management selection,
and responsibility to shareholders.
Legal benefits, privileges, and support measures are considered
for each component of ESG. For instance, incentives for
environmental protection include the exemption of electric and
hybrid vehicles and compressed natural gas buses from additional
value-added tax (VAT). Additionally, there are tax exemptions for
the production and import of equipment in the field of renewable
energy and the use of recovered energy sources.
The creation of the Balakhani Industrial Park, based on the
Presidential Decree of May 4, 2011, aims to revive production in
the country. The park's residents enjoy exemptions from land,
property, and profit taxes for 10 years. Moreover, according to the
Tax Code, equipment imported based on the confirming document of
the relevant executive authority is exempt from taxes for 10 years
from the date of registration in the industrial and technology
park.
In conclusion, Azerbaijan's initiatives to promote SMEs and
green economy initiatives reflect a holistic approach to
sustainable development. By supporting SMEs in adopting
environmentally responsible practices and fostering innovation,
Azerbaijan is poised to achieve long-term economic growth while
addressing pressing environmental and social challenges. These
measures illustrate Azerbaijan's commitment to promoting
sustainable economic development through robust support for SMEs
and green initiatives.
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