BOTH DEMAND AND SUPPLY ARE VALID

Throughout history, trade has been the engine of economic growth, building the state's economy. Profitable sale of own goods and the purchase of other goods determine the material well-being of the nation and the country's role in the world arena.

Until recently, the main commodity that Azerbaijan could offer to the world was oil, hence keeping the balance of national economy and fully providing for its domestic needs. While the natural resource is a very profitable commodity, it is not a long-lasting one. Azerbaijan needs to gradually trade new types of goods and diversify its exports to reduce imports. 

According to statistical data for 2017, the non-oil sector of national economy grew by 2.5%, non-oil industry - by 3.1%, agriculture - by 2.8% during the nine months, which influenced the volume of trade turnover, increasing it by 7%.

"Development indicators depend, inter alia, on the balance of foreign trade. Our positive balance of foreign trade during these nine months was $4.4 billion. This demonstrates our economic success, while at the same time it has a very positive effect on the exchange rate of our national currency," said President Ilham Aliyev at the meeting with the Cabinet of Ministers dedicated to the results of nine months of socioeconomic development in Azerbaijan. Azerbaijan's foreign exchange reserves grew by $4.5 billion, reaching $42 billion.

Azerbaijan's export indicators are growing, while the difference in revenues from the sale of energy resources and non-oil products is reduced. So, during nine months, non-oil exports reached $1.07 billion, that is increased by 30% compared to the same period of last year.

What does Azerbaijan offer the world market in addition to oil and gas? This is easy to estimate even without statistical reports. It is enough to look at the geography of non-oil exports, where Russia occupies a leading position. Our northern neighbor is perhaps the oldest and most loyal customer of Azerbaijani agricultural products. However, other neighboring countries also purchase our goods with pleasure, as Azerbaijani products are quite diverse in terms of taste and ecological purity compared to mass distribution of artificially grown or genetically modified analogues.

According to the chairman of the State Customs Committee of Azerbaijan, Aydin Aliyev, in January-September of 2017, the export of fruit and vegetable products from Azerbaijan increased by 63% in comparison with the same period of 2016.

It means that state assistance to the development of agriculture is getting effective. As President Ilham Aliyev noted, this year was a record in the acquisition of agricultural machinery - 8 thousand units of equipment have already been delivered, and another 2 thousand will arrive before the end of the year. The state also provides assistance in establishing the necessary infrastructure, including irrigation, roads, etc. There are separate programs for the development of export crops and agro-parks. Incidentally, according to experts, agricultural parks can play a key role in achieving the necessary rates of development in agricultural sector, since they will help reduce the risks and provide access to necessary financial resources. It is no secret that today this is a big problem for farmers, as banks are increasingly reluctant to issue loans, especially to the agricultural sector, as the risks of non-return are much higher. It should be noted that two agro-parks already operate. In general, it is planned to build 38 of such parks.

Apparently, one of the significant problems impeding the expansion of agricultural exports is the absence of enterprises able to provide processing and storage opportunities. However, the existing situation is much better than years ago. There are freezing, grain warehouses in the regions that can be used to store production until the buyers are available. However, as President I. Aliyev noted, it is time to create large, export-oriented logistics centers. "One of them was built in Shamkir, which, I believe, is the largest logistics center in Azerbaijan. I think that in the future we will need at least three large logistics centers - in Central Aran, northern and southern zones," added Mr. Aliyev, urging entrepreneurs to participate in this process.

Building of greenhouses is also getting popular these days: modern greenhouse complexes mainly created for export products cover an area of more than 400 hectares. In parallel with agriculture, the government is implementing a set of programs to develop the industrial potential of Azerbaijan, particularly thematic parks and industrial zones. "Neftchala industrial park was opened recently. Industrial zones are being created in Balakhany and Masalli. A large industrial zone for the production of light textile is being created In Mingachevir. In Hajigabul district, an industrial zone is being created," reminded President Aliyev. Again, the state provides all infrastructure, including the warehouses and production workshops. The main criterion for new production projects is domestic demand and exports.

In short, the first stage of development to ensure the growth of Azerbaijan's export curve, the access to quality products, is being developed actively. But there are other moments such as studying the needs of foreign markets, finding buyers and, finally, maintaining proper and profitable trade. Today, these issues are sometimes beyond the reach of even large holdings for a number of reasons. For example, there are still not enough competent specialists with experience in this area; no quality marketing propaganda for the goods, etc. With the growth in demand, these gaps will start diminishing. State assistance to companies of any size is an objective necessity.

According to Deputy Minister of Economy Sahil Babayev, Azerbaijan is studying the opportunities to export its products to the markets of 34 countries. "We want not only to sell our products abroad, but also to assess future export potential. For example, we received various requests from local entrepreneurs, which are the basis of our analysis of foreign markets. In each market, we analyze the possibilities of supplying specific products," said the deputy minister, adding that the ministry is actively assisted by embassies and representations of Azerbaijan abroad.

The Ministry of Economy is also trying to solve marketing problems. Azerbaijan has launched advertising of national products on foreign TV channels such as the Russian Russia-24, which is advertising of Azerbaijani fruits and fruit juices. "Of course, we will not stop only on TV channels, but we will advertise the Azerbaijani products on various websites, billboards, radio, as well as in other media," said S. Babayev.

In parallel with this, it is expected that the Azerbaijani products will be advertised in Duty Free zones of foreign airports starting from next year: "We are also conducting successful negotiations with CJSC Azerbaijan Airlines and the State Oil Company (SOCAR). Thus, we have stands with products brand-named Made in Azerbaijan at local airports, and the refueling stations of SOCAR in foreign countries will start marketing Azerbaijani products," said Mr. Babayev.

Yusif Abdullayev, Vice President of the Azerbaijan Export and Investment Promotion Foundation (AZPROMO), added that this process would take some time, as "we want to access these markets with a wide range of products. We actively work in this direction. In the near future, we plan to open shelves for products Made in Azerbaijan at Duty Free zones of airports of neighboring countries, as our goods are already known in these countries. By the end of this year, we will see concrete results," said Mr. Abdullayev.

In addition, the Ministry of Economy has prepared proposals to expand the list of goods with export potential. "Together with the Exporters Club acting under AZPROMO and representatives of business associations, we have prepared new proposals that have already been submitted to the government," said Mr. Babayev.

According to deputy minister, export promotion activities, when the state returns part of the costs to the producers of non-oil products, compensating 3-6% of the customs value, have proven very successful and promoted the exports. Since the beginning of 2017, more than ₼2 million have been refunded to Azerbaijani exporters within the framework of this mechanism.

In a nutshell, the process is underway, and when all components of Azerbaijan's trade chain reach the target, the national economy will come steps closer to the cherished objective of overcoming dependence on the oil factor.