Business

EBRD passes new strategy for Azerbaijan
In its press release, the European Bank for Reconstruction and Development (EBRD) announced a new two-year strategy for Azerbaijan. The new strategy recognizes improvements in the investment climate, though calls for further measures to achieve stronger growth in the non-oil-gas sector.
The EBRD advised Azernews that it has also set out how the bank can contribute to Azerbaijan's plans for reducing poverty.
Macroeconomic performance in Azerbaijan has been impressive over the last two years but there are still obstacles and progress to be made in the transition process, said George Krivicky, Director for the Caucasus, Belorus and Moldova. The new strategy is designed to help Azerbaijan face these challenges and realize its economic potential.
The EBRD aims to help Azerbaijan improve its investment environment, with particular emphasis on the legal/regulatory sector, infrastructure development, strengthening of the financial sector, and support for small and medium-sized enterprises (SMEs).
The Bank will continue to assist Azerbaijan in the environmentally sensitive development of the oil and gas sector, corporate governance, transparency and sound revenue management, while also supporting measures to aid diversification of the economy. Specifically, the EBRD will promote micro, small and medium-sized enterprises and non-oil private-sector projects by direct financing and through the financial sector, as well as through policy dialogue about the investment climate.
The bank also will focus on building an effective and competitive financial sector that commands the confidence of the population and efficiently mediates between savers and investors - in particular with a view to supporting micro enterprises and SMEs.
sThe EBRD is determined to continue supporting the creation of a market-based economy through the promotion of robust infrastructure projects that promote commercialization, private-sector involvement, and the strengthening of institutional and regulatory frameworks. Projects that foster regional cooperation will take highest priority, according to the bank.
In executing this strategy, the EBRD will co-ordinate closely with other international and bilateral institutions to ensure a complementary approach, in particular in supporting Azerbaijan's implementation of its State Programme on Poverty Reduction and Economic Growth. The EBRD will continue an active, ongoing dialogue with the private sector and NGOs.

Azerbaijan, Germany sign loan covenant
The Azerbaijani government and German bank KFW signed on Thursday a loan covenant for a program to rehabilitate the electrical power transmission system. Attending the signing ceremony were Azerbaijani Deputy Prime Minister Yaqub Eyyubov, Minister of Fuel and Energy Macid Karimov, Minister of Finance Avaz Alakbarov, President of Azarenerji joint-stock company Etibar Piriverdiyev, and German ambassador to Azerbaijan Claus Grevlich. Deputy Prime Minister Yaqub Eyyubov said the power system of all Baku city and the Abseron peninsula would be fully renovated in the project funded by KFW and implemented by Azarenerji, almost eight sub-stations will be renewed, while accumulator systems of nine sub-stations will be replaced. The German ambassador said that KFW had funded several projects in Azerbaijan, including construction of the Baku Airport, water projects, and etc.
Under this loan covenant, the German KFW bank is to deliver over 15m euros to Azarenerji for reconstructing transmission networks and establishing a modern energy system management service in 2003-2004.
To ensure the project is properly implemented, Azarenerji will technically revamp 13 high-voltage substations thereby lowering losses from power transmission and distribution by 20-25 per cent.
An agreement had been signed in November 1998 to finance the first stage of the program on rehabilitation of the electricity power transmission system.

Tourism information centers to be set up on countryide
The Azerbaijani Minister of Youth, Sports and Tourism, Abulfaz Qarayev, held a news conference on Friday devoted to work carried out in January and further plans.
He said that a tourism information center had been set up in accordance with the state program, adding that such centers would open in the countryside as well. These centers will provide information about hotels, companies, tourist routes in Azerbaijan, etc. The minister pointed out that the Entrepreneurship Assistance Fund would fund five projects worth $70,000 - 100,000 each. Recently, a $20-m project, The Fire Museum, has been presented to develop tourism infrastructure in the Abseron peninsula.

WB Mission in Baku
A World Bank (WB) mission led by Joop Stuotjesdijk (task team leader) has arrived in Azerbaijan for a period of two weeks to continue preparation for the proposed Irrigation Distribution System and Management Improvement Project (IDSMIP). The mission will finalize the project concept, components and costing with senior government officials. The mission will also discuss the timing of the remaining phases, the WB Baku office has informed AssA-Irada. The team will work closely with staff of the State Amelioration and Irrigation Committee (SAIC), but will also meet with officials of the Cabinet of Ministers, Ministry of Economic Development and Ministry of Finance. It is expected that at the end of the mission a draft Aide Memoire, containing the missions' findings and recommendations, will be produced and discussed with the government.

25-per-cent rise in domestic currency market
The inflation rate was 2.8% in Azerbaijan in 2002. The rise in prices involved foodstuffs at 92% and non-food products at 8%, according to a National Bank of Azerbaijan (NBA) report on situation with the 2002 performance of the monetary and credit policy. Non-public sector accounts for 73 % of the GDP. The non-public sector's share amounts to 53.7% in industry, 98% in agriculture, 85.3% in passenger transport, 56% in the cargo transport, and 66.5 per cent in the communication sector.
Incomes reached AZM21,170bn in 2002, while expenditures constituted AZM20,965bn, exceeding the 2001 indicators by 11.4 and 12.6 per cent accordingly. The average monthly salary has increased to AZM315,200 or 17.7% compared to 2001.
The NBA told AssA-Irada that the volume of the domestic currency market has surged by 24.5 per cent to AZM2.5bn. The NBA currency sales in the internal currency market have made up $375.6m, while its buying of currency has amounted to $440.3m. The NBA currency reserves have risen to $681.7m by $80m as opposed to the 2001 indicator.

Azerbaijan to attend int'l tourism exhibitions
Azerbaijan will take part in six tourism exhibitions in 2003, the Ministry of Youth, Sports and Tourism has told AssA-Irada.
First, an international travel and tourism exhibition is due in Kish, Iran, on February 6-10. A catalogue "Welcome to Azerbaijan", a tourist information booklet and other promotional materials will be presented at the exhibition to demonstrate the tourism potential of Azerbaijan.
Later, at the special invitation of the Turkish Travel Agencies Association TURSAB, Azerbaijan will take part in the Akdeniz Tourism exhibition to be conducted in Istanbul, Turkey, between February 27 and March 2. Azerbaijani representatives are also to attend the international tourism show organized in Berlin, Germany, from March 7 to 11, the MITT-2003 Travel and Tourism exhibition in Moscow, Russia, in March 26-29, the 10th  international tourism show in Tel-Aviv, Israel, in April 7-9 and an exhibition in Dubai, the UAE, in May 6-10.

Industrial City - Business Area project to be developed
The Union of Small and Medium Business Owners has begun a project called, Industrial City - The Business Sector in Baku, within the framework of the National Non-Governmental Organizations' Forum. The BP Business Center has told AssA-Irada that the Azerbaijani Ministry of Economic Development and the United Nations Development Program are supporting the project. The program aims to help entrepreneurs save funds and start their own businesses by reducing financial investment and cutting out set-up costs. The project will be ready by February 15, according to the Union of Small and Medium Business Owners.

Azercell expands into rural areas
The press service of Azercell Telecom JV informed AssA-Irada that the company had recently expanded its coverage area to includ four villages in Ismayilli, Oguz, Zaqatala and Balakan Districts, where he had installed new stations. The company has also built two new stations in the capital.
Consequently, Azercell covers 93.6 per cent of the population and 63.8 per cent of the territory of Azerbaijan. The company is planning to expand into other regions in the near future thereby making it easier and more efficient for subscribers to use the mobile communication service.

Azerenerji generates 2.079bn kWt of electricity in January
The Azerenerji joint-stock company produced 2.079bn kWt of electrical power in January, 2003.
The press service of Azerenerji advised AssA-Irada that thermal power plants had accounted for 1.832bn kWt of the total amount, while hydro-electric power plants had contributed 246m kWt.
Exchange of electricity power with Russia, Iran and Georgia has continued as planned.
In January power generation rose by 13.1 per cent and consumption by 10.6 per cent, occasionally as high as 15 per cent, compared to last year.