Business

President facilitates local businesses

The Azeri President decreed Monday to slash the number of licensable businesses, simplify the allocation of licensing and transfer the prerogative to the Ministry of Economic Development.

The decree is explained with the fact that the existing licensing process had been hampering the development of entrepreneurship in Azerbaijan, being a lever of pressure and at times a source of bribery for government officials.

Currently, license is required for 240 businesses in the country. The decree will reduce this figure and extend the validity of existing licenses.

Some observers are concerned over the prospective expansion of the powers of the Ministry of Economic Development following the move.

Shahdaniz exports threatened

The implementation schedule of the Shahdaniz project to take Azeri gas from the Caspian to international markets has reportedly come under the threat of disruption.

State Oil Company President Natiq Aliyev hinted at this possibility last week in a briefing with local media.

“The development conception of the Shahdaniz should be clarified first. The previous concept is changing and we have pushed for its outright reconsideration”, he was quoted by the local Zerkalo daily as saying.

Under the Azeri-Turkish deal on the Shahdaniz field Turkey would get up to 2 billion cubic meters of gas by 2004.

Experts have originally tended to explain the disruption of the work schedule with Turkey’s insolvency. However, there are said to be other reasons, first of all the increased cost of the project itself.

“Especially I have some questions why the project has gone expensive. We have decided to reconsider some issues and find out the cause of the high costs”, the SOCAR head has said.

SOCAR has put much of the blame for the increase in the project cost on its major operator bp. Asked if the British oil and gas giant shares this view, N. Aliyev said “it should not share, but accept it”.

Third mobile operator not soon

By Azernews Staff

A third operator in Azerbaijan's mobile communications market is inappropriate, as two existing operators, Azercell and Bakcell are doing their business, the Ministry of Communications has said, advising the two to reconsider their tariff policy.

The ministry is planning to invite the third operator after a tender no sooner than in 2004.

Rumors about the arrival of a third mobile operator have been fueled with the Economic Development Ministry’s recent condemnation of the nation’s two major operators’ higher tariffs.

The Ministry has also blamed Azercell and Bakcell for sticking to lull monopolization accord.

Currently, mobile communication tariffs are higher in Azerbaijan than in its neighbors.

Mobile subscribers are charged more in Azerbaijan, as one minute talk time here is twice as expensive as in Georgia’s Geocell and Magti, three times in the Ukraine’s Kiivstar and 1.7 times in Russia’s North Caucasus GSM.

The Ministry is preparing proposals for the development of the competitive environment to prevent monopolization and better economic legislation and services by the mobile communication providers. Also in stock is the formation of a tariff policy favorable for mobile phone users and provision of technologies.

Bakcell gives up

Bakcell Motorola has been the first to respond to the Ministry’s feeler, announcing its plans to offer cheaper tariffs for mobile communication soon to enhance subscription service.

It also intends to extend service area to all the regions of the country, open new payment points and run a large ad drive.

Baku, Tehran boost business

Azerbaijan and Iran are continuing to expand business ties that were given a boost after President Aliyev’s Tehran visit this year.

The parties seem determined to progress on this path despite the existing gap in the Caspian legal status issue.

The recent Azeri-Iranian business forum, which brought together several hundred businessmen, eyed the prospects of furthering bilateral economic relations, with an Iranian trade house opened and an Iranian company building a detergent plant in Baku.

Opening the forum at the Crescent Beach Hotel of Baku last week, Azeri Minister for Economic Development Farhad Aliyev said there had been remarkable progress in the development of bilateral relations and the forum would play a special role in the expansion of business links.

Taking the floor, chairman of the Iranian Chamber of Commerce and Industry Syed Khamushi welcomed the participants in the gathering, saying that some a hundred businessmen from 45 Iranian companies were present. Khamushi voiced his hope that the meetings of this kind would help strengthen bilateral relations, binding the two countries closer.

New businesses

An Iranian Trade House, opened in the former Sahil exhibition center behind Baku Palace of Hand Games, is expected to house branches of 40 Iranian companies and host bilateral business meetings.

Iranian businessman Farshad Farzani said his company had constructed the first detergent plant in Azerbaijan in a news conference Friday. The 2mln US dollar worth plant is expected to produce 42 brands of hygienic articles, including detergents, shampoos and soaps, with 150 jobs offered.

The Iranian company also intends to put a plant manufacturing polyethylene plastic dishes into commissioning in two months. It will export world class products, Mr. Farzani said.

Energy prices not to rise

Minister for Economic Development Farhad Aliyev has told journalists that energy prices in Azerbaijan will not rise, especially because of the living cost.

Meanwhile, an International Monetary Fund delegation is in Baku from 1 till 10 September. The fund demands that energy prices in Azerbaijan be brought into compliance with world prices.

Azerbaijan, Georgia abuse chemicals

Use of chemical preparations for agriculture in Azerbaijan and Georgia was in focus during a roundtable organized by the Agro Consulting Center, as speakers noted that both countries abuse chemical fertilizers.

Spokesman for the Azeri Ministry of Agriculture Imran Muxtarov told the roundtable that Azeri farmers use less pesticides than they did before, but often do inevitable harm to public health due to uncontrolled utilization of chemicals.

Georgian representative Mziya Sereteli said some banned fertilizers were smuggled into Azerbaijan and Georgia, calling to thwart the illegal supplies.

Gold, currency reserves up

The total volume of Azerbaijan’s gold and currency reserves reported 729mln US dollars as of 1 September, showing an increase of 31mln dollars this year. The National Bank of Azerbaijan has said the increase is due to its successful transactions on the currency market. The volume of the currency market made up 1.512bn dollars in eight months of 2002, or 20 percent, 252mln dollars over the same period last year. The NBA has attributed the thriving currency market to rising business activity.

Barmek to energize Sumgayit

Barmek Azerbaijan is expected to run the power grid of the third biggest Azeri city, Sumgayit, according to a Presidential decree dated 28 August approving the agreement between the Ministry of Economic Development and Barmek Azerbaijan Ltd. The Turkish energy giant is to pay 300,000 US dollars in concession fee.

Moreover, Barmek has assumed to reduce the level of technical losses from 16 to 11 percent and increase the collection rate in the 6 years to come, supplying quality and reliable electricity to consumers. The company is obliged to compensate the damage inflicted on consumers because of non-quality supplies, with plans to offer promotion in wages.

Press loans to be cleared

Minister for Economic Development is expected to meet with newspaper editors on allocation of credits to press shortly.

The parties are believed to coordinate all the loaning issues, including terms of crediting and deposit mechanisms during the meeting.

Besides, experts from the Ministry will reportedly assist the newspapers to develop a business plan to get the credits.

The President has decreed to allocate loans to the press to help its independent development.