Nicat Hacizade, Manager of the “One-Stop” Export Support Center at the Center for Analysis of Economic Reforms and Communication (CAERC), commented on measures to mitigate the negative impact of the coronavirus (COVID-19) pandemic on employment and business entities. He stated that the Action Plan adopts a comprehensive approach to ensuring the continuity of foreign trade and preventing obstacles to the operations of these entities. This includes applying trade-finance instruments and improving trade tariffs as well as non-tariff barriers and regulations over the medium term.
The Action Plan, developed to reduce the negative effects of the pandemic and resulting sharp fluctuations in global energy and stock markets on Azerbaijan’s economy, macroeconomic stability, employment, and businesses, addresses support for foreign trade under Sub-indicators 16 and 17 of the indicator “Implementation of additional support measures in sectors negatively affected by the pandemic.” International experience widely applies measures such as export insurance and bank guarantees to manage potential risks and stimulate export activity. Export-trade instruments like insurance, factoring, letters of credit, and insured bank guarantees can be broadly applied in this context.
Hacizade noted that the plan specifically addresses enhancing the price competitiveness of domestic production. It envisages customs duty exemptions for raw materials and intermediate goods that are used in domestic production but not locally produced (or considered non-competitive under comparative advantage theory). President Ilham Aliyev has consistently emphasized the application of these exemptions in meetings and briefings on pandemic prevention. Once selected, the applicable exemptions will increase total output for domestic producers (as the reduced costs improve price competitiveness, stimulating demand). This will both increase domestic consumption, boosting economic activity, and provide exporters with additional opportunities to access foreign markets. In addition, measures aligned with international practices regarding the use of domestic transit and temporary storage warehouses were previously implemented by the State Customs Committee.
Measures to improve affordability and accessibility of essential food and medical products involve adjusting trade tariffs, including reducing or zeroing customs duties on these items. Currently, consumption is concentrated on these essential goods due to both objective factors (income allocation) and subjective factors (priority needs). Therefore, liberalizing tariffs on these essential goods by the end of 2020 was a necessary step for the current period.
Hacizade also explained the Action Plan’s provisions on non-tariff barriers and regulations: “Thanks to reforms in customs administration in recent years, significant progress has been made in electronic processing and online procedures. For essential goods, the state has all necessary customs instruments to expedite customs clearance, inspections, and issuance of permits and certificates. The continuation of liberalization measures regarding non-tariff regulations will make the Action Plan indispensable. In particular, implementing ‘one-stop’ certification principles in the relevant authorities will provide additional support for executing this component.”
In conclusion, ensuring the continuity of foreign trade during the pandemic is crucial for both market participants and economic institutions. Furthermore, the liberalization policy will continue in order to generate a surplus in the non-oil sector’s foreign trade balance, supporting economic growth based on net exports.