June 14, 2013. The number of permits and licenses applied to entrepreneurs is more than 300 - round table
On June 14, the Public Union for Support of Economic Initiatives held a roundtable discussion on "Licensing of Entrepreneurship in Azerbaijan: Problems and Solutions." The round table was attended by representatives of government agencies and international organizations, entrepreneurs, independent experts and representatives of local NGOs.
Welcoming the participants, the chairman of the Center Azer Mehtiyev said that one of the many factors hindering the development of entrepreneurship in our country is the existing system of licensing and permits. He recalled that on October 26, 2011, the President of the Republic of Azerbaijan signed a decree "On some issues related to the special permit (license) and permit system required to engage in certain types of entrepreneurial activities." There, the Cabinet of Ministers was instructed to prepare and submit to the President within three months a draft law "On Licenses and Permits" in order to create a single special agreement (license) and permit system to create a more favorable business environment for entrepreneurship in the country. Despite the fact that a year and a half has passed since the signing of the decree, the bill has not yet been discussed. Mehtiyev said that the organization is currently investigating the problems faced by small and medium-sized businesses in the country with licensing and permits. The study is part of the United States Agency for International Development's (USAID) Small Business Development Support Project. The project is implemented by a consortium of NGOs led by the Fund for Entrepreneurship and Market Economy Development.
Sabit Bagirov, head of the Entrepreneurship Development Foundation, spoke about the goals and objectives of the project, the importance of the project and the work to be done under the project. He noted that the project will conduct research in 11 areas of entrepreneurship, identify problems and develop recommendations for their solution.
USAID Project Management Specialist Ayten Gahramanova noted that one of the main activities of the US IDA in Azerbaijan over the past 10 years is to support the development of the non-oil sector in the country. Two major projects are being implemented in this direction. The first is a trade project. The project provides technical support to the government in Azerbaijan's membership in the World Trade Organization, as well as awareness-raising among the public and entrepreneurs. The second project is to support the development of small business. This project has two main goals: 1) to improve the business environment in the country; 2) To achieve the expansion of business-civil society cooperation.
The author of the study, expert Kanan Aslanli, made a presentation on "Licensing of Entrepreneurial Activity: Foreign Experience and Azerbaijan." In his speech, he spoke about the important and harmful aspects of business licensing, spoke about the interesting experiences of foreign countries. It was noted in the report that different types of permits are currently applied in Azerbaijan: 90 types of activities are licensed, 46 activities are permitted, 27 cases are special permits, 39 cases are certificates, 19 cases are opinions, etc. The total number of all types of permits and licenses applicable to individual entrepreneurs is 305. Obtaining these licenses and permits costs entrepreneurs a long time, large formal and informal costs and bureaucratic hurdles. Referring to the number of permits issued by various government agencies, Aslanli said that currently the State Securities Committee has the authority to issue 35 licenses and permits, the Ministry of Emergency Situations 31, the Ministry of Communications and Information 26, the Ministry of Agriculture 24 and the Central Bank 18. . K.Aslanli emphasized that SOCAR, despite being a business entity, has the authority to issue permits to other companies. K. Aslanli noted the need for reforms in the field of licensing and important areas of reform in this area (you can download the presentation here).
Then the representative of the International Finance Corporation Hasan Huseynov made a report on "Reforms in the system of permits and licenses: foreign experience." He noted that his organization conducted serious research in this area in 2008, noting that one of the main issues hindering the development of entrepreneurship in Azerbaijan is the existing system of licensing and permits. He stressed that a study conducted in 2008 found that businessmen working in our country spend up to 35 million manat a year on permits and licenses. H. Huseynov spoke about the reforms implemented in the system of permits and licenses in the experience of different countries and its results, as well as the conditions for such a reform (you can download the presentation here).
Former MP, economist Nazim Mammadov said that this issue has been discussed for many years. He recalled that even in 2010, a large forum with the participation of all segments of society discussed this issue and made recommendations to the government. One of the proposals at that time was to create a single body in the country responsible for permits and licenses, and to entrust all work in this area to this body. He stressed that the existing system of permits and licenses in our country serves to monopolize the economy.
In his speech, MP Fazil Mustafa said that the current system of licenses and permits is not the only problem of small and medium enterprises in our country. In fact, in the current context of a dual (formal and informal) economy, there are numerous problems with the business environment in Azerbaijan as a whole. At present, no Azerbaijani citizen can establish a business in any field of economic activity on his own initiative. Have you ever witnessed the Prime Minister meeting with entrepreneurs at least once and taking an interest in their problems? Changing the business environment in the country is important for the development of SMEs. Speaking about the term of the licenses, F. Mustafa said that an entrepreneur who has received a license for a period of 5 years, after the expiration of the term, has to go through all the procedures again and bear all the costs. However, entrepreneurs who continue such work must achieve a very symbolic payment to extend the license for the next period.
Chairman of the Azerbaijan Merchants' Union Sevgim Rahmanov recalled the decrees signed by the President of the Republic of Azerbaijan in 2002 and said that the Council of Entrepreneurs was established under the President at that time, but for some reason its activities were soon suspended. Rahmanov noted that the purpose of licensing in our country is not clear: the current system serves to raise money, rather than ensure the safety of people. There are also serious problems with the transparency of licensing and permitting agencies.
Arastun Orujlu, head of the East-West Research Center, said that the root of all problems in the business environment is the lack of political freedoms in the country. He noted that the economic thinking in Azerbaijan as a whole is in a state of disrepair.
In his speech, Mirali Huseynov, Chairman of the Public Union "Study of Democracy" drew attention to two issues: 1) currently licenses and permits are issued by government agencies that perform regulatory functions in relevant areas, which creates a conflict of interest. However, in world practice, licenses and permits are issued by independent specialized agencies; 2) It would be expedient to use the experience of the newly established ASAN service in issuing licenses and permits.
In his speech, the representative of Sibley Eldar Gojayev drew attention to the conditions for issuing licenses and permits to entrepreneurs. He said that the country's legislation should clearly define the terms license, permit, special permit and other such terms, and indicate their differences.
Other participants in the discussions noted the importance of the topic under study and the issues to be considered during the study, emphasizing the need for serious reforms in the field of business licensing.
