Events

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Presentation of SME report in Sheki (October 23.2009)

On October 23, 2009, Azerbaijan IC team travelled to Sheki to do presentation on the findings of the recent SME report to local entrepreneurs and to conduct focus group meetings with entrepreneurs from agriculture and production sectors.
The PowerPoint presentation on the findings of the report was delivered by Fakhriyar Jabbarov and Abulfaz Manafov. Approximately 40 entrepreneurs attended the meeting. The presentation was followed by discussions on the findings of the report.
The following issues were raised during discussions:

· One of the entrepreneurs complained that he has collected the wheat yield but still cannot sell his produce. He has also mentioned that apart from Government he cannot sell his wheat to anybody else. Other producers of agricultural products have also complained about this issue.

· One of participants was interested in the World Trade Organization talks and was inquiring our input into export and import procedures.

· During the discussion entrepreneurs agreed that professional development is a key to preventing frivolous and abusing practices by the inspectors. An entrepreneur himself a tax inspector in the past urged to read a lot about the ongoing legislative and procedural by-laws.
· It was argued that about 99% of entrepreneurs do not know how to use cash register. The lame usage of cash register results in questioning by the tax inspectors.
· One entrepreneur suggested establishing a so called “Entrepreneurs Code of Conduct/Ethics”.
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IFC representatives answered the questions raised.

Conclusion:

In general, it appears that the most difficult areas for doing business in Sheki are realization of produce, insufficient knowledge of legislation and by-laws and resulting frivolous and poor inspection practices. Finally, in the light of previous regional meetings conducted by the project team one could argue that the Sheki entrepreneurial community is by far most professional and educated.

Presentation of SME report in Khachmaz (September 25.2009)

On September 25, 2009 the presentation was held on the key findings of the SME Study to the entrepreneurs in Khachmaz. About 40 entrepreneurs from Khachmaz, Guba and Gusar districts participated in the event. The meeting was organized with the support of the regional office of the Azerbaijan Entrepreneurs Confederation. The presentation was delivered by Ilham Abdullayev and Gasan Guseynov, the members of BEE project team. After the presentation the focus group meeting was held mainly with entrepreneurs engaged with the service (car repair, medical and mechanical services), production (carpets, plastic materials), agriculture (fruits and vegetables). The project representatives asked them about several permits that they had obtained for the previous years:
- land property certificate
- property encumbrance certificate
- utilities connection permits and procedures (electricity, gas and water/sewage system)
- medical license

There were a lot of complaints about the corruption and demands for non-formal payments from the local officials. Although some of the businessmen confirmed that he had received, for instance, a medical license with no problems and any additional payments. Some of the entrepreneurs complained about long lasting customs procedures while exporting various fruits and vegetables to Russia. In some of such cases they had simply to throw all the shipments right to the sides of the roads.

Conclusion:
The main problems of the regional entrepreneurs are corruption of the local officials, non-clear and outdated requirements, bureaucracy.

Presentation of SME report in Lankaran (September 7, 2009)

On September 7, 2009, Azerbaijan BEE team travelled to Lankaran to do presentation on the findings of the recent SME report to local entrepreneurs and to conduct focus group meetings with entrepreneurs from food processing sector.

The Power Point presentation on the findings of the report was delivered by Fakhriyar Jabbarov and Abulfaz Manafov. Approximately 52 entrepreneurs attended the meeting. The presentation was followed by discussions on the findings of the report.

The following issues were raised during discussions:

· One farmer complained on the short maturity period for the bank loans. He explained that before his cow breed a time for interest payment has already come.

· Many entrepreneurs complained about bank interest rates being too high.

· Most of entrepreneurs applied for a loan at a commercial bank but could not get it. Asked for how IFC can help him obtain the loan.

· Several entrepreneurs complained about inability to access finance to grow their businesses.

· Several businesses complained about customs procedures, specifically about a) customs taxes being too high, and b) corruption associated with customs procedures.

· Another complaint was in general about corruption and how number of bribes has increased recently

· The last comment was about payments to Social Protection Fund. The participant commented that required payments are too large for the agricultural business and that entrepreneurs switch their status form legal entity to physical entity in order to avoid these payments.

IFC representatives answered the questions raised.

Conclusion:

In general, it appears that the most difficult areas for doing business in Lankaran are access to finance and corruption practices in foreign trade and taxation. Most interestingly, the issue of high energy prices was also brought up. Our understanding is that the cost of agricultural products in this region heavily comprises of the utility costs. Overall one could assume that the above difficulties also stem from the fact that many of the entrepreneurs are not aware of their legal rights and are therefore abused by corrupt government officials.

Presentation of SME report in Ganja (August 17, 2009)

On August 17, 2009, Azerbaijan BEE team travelled to Ganja to do presentation on the findings of the recent SME report to local entrepreneurs and to conduct focus group meetings with entrepreneurs from trade sector.
Approximately 46 entrepreneurs attended the meeting. The presentation was followed by discussions on the findings of the report.

The following issues were raised during discussions:

· One of the entrepreneurs complained about VAT being too high.

· Another entrepreneur applied for a loan at a commercial bank (amount - $500,000), but could not get it. Asked how IFC can help him obtain the loan.

· One of participants was a representative of a grant organization. He wanted to know whether it is true that grant organizations are not supposed to be levied by tax.

· Several entrepreneurs complained about inability to access finance to grow their businesses.

· Several businesses complained about customs procedures, specifically about a) customs taxes being too high, and b) corruption associated with customs procedures.

· Another complaint was in general about corruption and how number of bribes has increased recently

· The last comment was about payments to Social Protection Fund. The participant commented that required payments are too large and that entrepreneurs switch their status form legal entity to physical entity in order to avoid these payments.

IFC representatives answered the questions raised.

Conclusion:

In general, it appears that the most difficult areas for doing business in Ganja are access to finance and corruption practices in foreign trade and taxation. The above difficulties could also stem from the fact that many of the entrepreneurs are not aware of their rights and are therefore abused by corrupt government officials.