Baku, Azerbaijan, July 7, 2008
—IFC, a member of the World Bank Group, has partnered with the Swiss State Secretariat for Economic Affairs (SECO) and BP on behalf of its co-venturers to launch the Azerbaijan Business Enabling Environment Project. This five-year program is designed to support the efforts of Azerbaijan’s government to improve the business environment for entrepreneurs and ensure sustainable and diversified economic growth. The project will focus on reducing the regulatory burden on business, monitoring the business environment through surveys of the small and medium enterprise sector, and increasing entrepreneurs’ awareness of their legal rights through outreach and advocacy work.
In 2007 and 2008, the government launched reforms by introducing a one-stop shop and making changes in licensing and construction permits, investor protection, tax administration, and labor. IFC will continue to support reforms in these areas by streamlining administrative procedures and removing key regulatory barriers to business entry and operations. In particular, IFC will work with the government to improve legislation governing permits and licensing and help implementing agencies translate legislative changes into improvements on the ground.
Philipp Keller, Deputy Regional Director of the Swiss Cooperation Office for the South Caucasus, noted, “Switzerland is pleased to contribute with a grant of $4.3 million to help Azerbaijan’s government improve the business enabling environment. The project will facilitate diversified growth in the SME sector and help create employment in Azerbaijan.”
“BP on behalf of its co-venturers, is pleased to participate in this project. It is a unique opportunity for combining the Government’s, IFC’s, SECO’s and our resources to help the government streamline its efforts to enable rapid development of local enterprises. We see this project as part of our commitment to supporting economic development through empowering local businesses and we hope this joint effort will help develop strong and transparent private sector”, says Seymour Khalilov, BP’s Vice-President, Communications and External Affairs.
Building on significant regional expertise, IFC will monitor the business environment in Azerbaijan through surveys of the SME sector. These enterprise surveys will complement the yearly global monitoring by the IFC-World Bank
Doing Business
report. IFC intends to transfer its methodology to the Ministry of Economic Development to ensure that domestic capacity for ongoing business environment monitoring is developed and can be sustained. IFC will also work to increase entrepreneurs’ awareness of legal rights and promote private sector involvement in reforms through public education campaigns, advocacy work, and launch of the SME Toolkit portal.
Through its business enabling environment projects in CIS countries, IFC has helped governments amend or enact 11 major laws and regulations that have led to $93 million in cost savings for SMEs. IFC also helped draft or amend 83 others that have been adopted by governments. IFC’s surveys of smaller businesses have provided policymakers with detailed, relevant recommendations for improvements. As of July 1, 2007, 161 survey recommendations have been adopted by governments. To educate SMEs about their legal rights and responsibilities, almost 247,000 educational materials have been distributed in the region.
About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that poor people should have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through syndications and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit
www.ifc.org
.
Azerbaijan became a member of IFC in 1996. To date, IFC has invested $266 million from its own funds and $104 million from syndications in 37 projects in the country. IFC has also implemented advisory projects in banking, corporate governance, leasing, SME development, housing finance, securities market development, investment promotion, and business environment.
About SECO
The State Secretariat for Economic Affairs (SECO) is the Swiss federal government's centre of expertise for all core issues relating to economic policy. Its aim is to ensure sustainable economic growth by putting in place the necessary regulatory and economic policy conditions. The “Economic Cooperation and Development” Division of SECO is responsible for planning and implementing economic and trade policy measures with developing countries, Eastern European and Central Asian states as well as the new EU states.
The primary aims of SECO are to integrate partner countries into the world economy and promote sustainable economy growth, making an efficient and effective contribution to reducing poverty. This represents a direct positive relationship between foreign trade policy and development cooperation.
Switzerland is active in Azerbaijan since 2001. Each year, Switzerland spends about US$ 6 million on transition assistance to Azerbaijan as a non-reimbursable contribution in different areas like: corporate governance, leasing, primary mortgage, government securities market, intellectual property rights or water management.
About BP
BP as the operator of Azerbaijan’s major oil and gas development and transportation projects on behalf of its partners has set an ambitious target to continually increase the value of contracts placed with Azerbaijan-owned companies. To reach this target, BP and its co-venturers have opened the Enterprise Centre in Baku to support local companies and encourage their participation in BP projects. In 2007 BP on behalf of its co-venturers spent $111m directly with local Azerbaijani small and medium size enterprises (SMEs) – a significant increase from the 2006 spend. The driving force behind these initiatives is BP and co-venturers’ commitment to the sustainable economic development of Azerbaijan.
As part of this commitment BP and its co-venturers:
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are funding the Supplier Finance Facility (SFF) - an important initiative in support of local enterprise development. The SFF is a joint credit facility established by BP on behalf of its co-venturers, IFC and the Micro Finance Bank of Azerbaijan. This $15-million project is designed to give greater access to finance for Azerbaijan's local oil and gas industry supplier and service enterprises;
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are supporting in cooperation with the EBRD and IFC private sector development in Azerbaijan through creating transparent and effective access to commercial finance for local businesses including SMEs and micro-enterprises;
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are funding the Enterprise Development and Training Programme (EDTP) – a multi-million initiative aimed at increasing the local content of BP and co-venturers contracts in Azerbaijan and thereby contributing to the healthy and transparent development of local economy;
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are sponsoring the Best of Business local enterprise awards to encourage local business development. The awards recognise outstanding local and international companies and business personalities whose entrepreneurial skills contribute to the success of BP-operated oil and gas projects and make a lasting impact on the local business environment.
