Azerbaijan
The institutions that make up the centre of government (CoG) play a crucial role in the policymaking process and help to ensure that government decisions are timely, evidence-informed, strategic and consistent. Despite this prominent role, the CoG often has the reputation of being somewhat opaque in terms of its structure and ways of working. This report presents an overview of the role and functions of the CoG of five European Neighbourhood Policy East countries – Armenia, Azerbaijan, Georgia, the Republic of Moldova and Ukraine – from a comparative perspective, both with respect to each other and in comparison with CoGs in OECD and EU countries. The report explores the CoG’s role in policy co-ordination, how it supports quality decision making, its contribution to strategic planning and its role in managing European integration issues. The report highlights strengths and challenges in the ways that the CoG institutions operate in the five countries and suggests areas for which policy dialogue and exchange of experience with OECD and EU Members could help to enhance outcomes.
The COVID-19 crisis has had a profound impact on SME access to finance. In particular, the sudden drop in revenues created acute liquidity shortages, threatening the survival of many viable businesses. The report documents an increase in demand for bank lending in the first half of 2020, and a steady supply of credit thanks to government interventions. On the other hand, other sources of finance declined, in particular early-stage equity.
This paper, a special edition of Financing SMEs and Entrepreneurs, focuses on the impacts of COVID-19 on SME access to finance, along with government policy responses. It reveals that the pre-crisis financing environment was broadly favourable for SMEs and entrepreneurs, who benefited from low interest rates, loose credit standards and an increasingly diverse offer of financing instruments.
It documents the unprecedented scope and scale of the policy responses undertaken by governments world-wide, and details their key characteristics, and outlines the principal issues and policy challenges for the next phases of the pandemic, such as the over-indebtedness of SMEs and the need to continue to foster a diverse range of financing instruments for SMEs.
This study was one of the first attempts to evaluate and quantify the benefits of transboundary co-operation between Georgia and Azerbaijan. A specific framework for inventorying these benefits, taking into account all the different dimensions of transboundary water management, was built and applied to the major transboundary water bodies. Though a thorough assessment of the costs and benefits of transboundary co-operation in the two selected cases was not possible due to the lack of some quantitative and economic data, the assessment results highlighted the importance of promoting the integration of economic thinking in transboundary water management. The present and future prospects for transboundary co-operation on water management are still very positive: the two countries are working on a Transboundary Agreement, which will provide the necessary regulatory framework for co-operation and, most importantly, will set up a Joint Commission on Sustainable Use and Protection of the Kura River Basin. The outcomes of this study allowed for the identification of priorities for future work on transboundary co-operation between Georgia and Azerbaijan, and namely, support to developing guidelines on mechanisms to update databases, but also on new tools and systems.
This report analyses planned infrastructure projects, decision-making frameworks related to infrastructure development and strategic planning documents in the six countries of the EU Eastern Partnership: Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. It compares current investment flows with countries' national development objectives to identify misalignments and provides policy-makers with recommendations to improve the integration of climate change and other environmental concerns into infrastructure development decision-making processes. The report presents a comprehensive overview of infrastructure investment, primarily in the transport and energy sectors, throughout the region and identifies the risks and opportunities emerging from current investment patterns.
This report analyses planned infrastructure projects, decision-making frameworks related to infrastructure development and strategic planning documents in eight countries in Central Asia and the Caucasus: Azerbaijan, Georgia, Kazakhstan, the Kyrgyz Republic, Mongolia, Tajikistan, Turkmenistan and Uzbekistan. It compares current investment flows with countries' national development objectives to identify misalignments and provides policy-makers with recommendations to improve the integration of climate change and other environmental concerns into infrastucture development decision-making processes. The report presents a comprehensive overview of infrastructure investment, primarily in the transport and energy sectors, throughout the region and identifies the risks and opportunities emerging from current investment patterns.
European Neighbourhood East countries have been actively engaged in improving service delivery for citizens and businesses for some time. Some have opted for flagship initiatives (often with large-scale, one-stop shop solutions), some for digitalisation of services, while some have taken an incremental approach towards the service delivery modernisation process. This comparative paper outlines the state of play in the design and delivery of public administrative services in Armenia, Azerbaijan, Georgia, Moldova and Ukraine. Public administrative services cover the vast array of interactions with (and within) government: making enquiries, applications, registrations and payments, and receiving information, documentation, decisions and funds. These contacts allow service users (citizens, businesses and non-governmental organisations) to exercise rights, access entitlements, execute obligations and achieve ambitions. As well as the description and analysis of the general service delivery framework(s), institutional set-up and practical implementation, this paper presents a comparative analysis of a set of life events and highlights inspiring practices from the different countries.
Central Asia's securities markets remain small-scale and underdeveloped. Building up well functioning securities markets will be essential to vitalising their economies. This publication contains an overview of securities markets in the region and selected country reports. It provides comprehensive data and analyses of securities markets in the region, updated to April 2005, addressing specifically effective measures to develop securities markets and infrastructure, especially the role of institutional investors and clearing and settlement systems; building investor confidence; and regulation and supervision of securities markets.
Azerbaijan, as the other countries in transition, is included in the wide processes of economic development. Azerbaijan, passing through phase of the general economic growth, has entered the second phase of the economic development, where the main direction is the effective financial market formation. This is the basis of the country’s institutional reforms.
The SME Policy Index: Eastern Partner Countries 2024 – Building resilience in challenging times is a unique benchmarking tool to assess and monitor progress in the design and implementation of SME policies against EU and international best practice. It embraces the priorities laid out in the European Union’s SME Strategy for a sustainable and digital Europe and is structured around the ten principles of the Small Business Act for Europe, which provide a wide range of measures to guide the design and implementation of SME policies. This report marks the fourth edition in this series, following assessments in 2012, 2016, and 2020. It tracks progress made since 2020 and offers the latest key findings on SME development and related policies in the countries of the Eastern Partnership (EaP). It also identifies emerging challenges affecting SMEs in the region and provides recommendations to address them. The 2024 edition benefits from an updated methodology that also offers a deeper analysis of policies to support the digital transformation of SMEs.
The SME Policy Index: Eastern Partner Countries 2020 – Assessing the Implementation of the Small Business Act for Europe is a unique benchmarking tool to assess and monitor progress in the design and implementation of SME policies against EU and international best practice. It is structured around the ten principles of the Small Business Act for Europe (SBA), which provide a wide range of pro-enterprise measures to guide the design and implementation of SME policies. This report marks the third edition in this series, following assessments in 2012 and 2016. It provides a comprehensive overview of the state of play in the implementation of the ten SBA principles, and monitors progress made since 2016. It also identifies remaining challenges affecting SMEs in the Eastern Partnership (EaP) countries and provides recommendations to address them based on EU and international good practice examples. The 2020 edition also features a novelty: An assessment of three new dimensions going beyond core SME policy (competition, contract enforcement and business integrity) looking at key structural reform priorities that are critical to establishing a level playing field for enterprises of all sizes and ownership types.
The SME Policy Index is a benchmarking tool designed for emerging economies to assess SME policy frameworks and monitor progress in policy implementation over time. The Index has been developed by the OECD in partnership with the European Commission, the European Bank for Reconstruction and Development (EBRD), and the European Training Foundation (ETF) in 2006.
For the Eastern Partner Countries, the assessment framework is structured around the ten principles of the Small Business Act for Europe (SBA), providing a wide-range of pro-enterprise measures to guide the design and implementation of SME policies based on good practices promoted by the EU and the OECD. It is applied to the Eastern Partner Countries for the second time since 2012.
The Index identifies strengths and weaknesses in policy design and implementation, allows for comparison across countries and measures convergence towards good practices and relevant policy standards. It aims to support governments in setting targets for SME policy development and to identify strategic priorities to further improve the business environment. It also helps to engage governments in policy dialogue and exchange good practices within the region and with OECD and EU members.
In recent years, Azerbaijan has made significant progress in acknowledging the key role of small business in the diversification of its economy, and in setting up an institutional and legislative framework to address the issues of entrepreneurship. The Small Business Act (SBA) assessment identified the improvement of the regulatory environment as one of its main achievements. There has also been progress in simplification of regulation by reducing the number of days, procedures and costs required to start a business, as well as the introduction of online registration for both individual entrepreneurs and legal entities. Nonetheless, much remains to be done in strengthening horizontal intra-governmental co-ordination mechanisms and creating more opportunities for the small business sector to be involved in the policy-making process through public-private dialogue and its better representation within associations and other advocacy groups.
Russia’s full-scale invasion of Ukraine and the ensuing sanctions greatly complicated overland freight transport between Europe and China via the so-called Northern Corridor, which runs through the Russian Federation. This has prompted renewed attention to the development of the Trans-Caspian International Transport Route, a multimodal route running through Kazakhstan, Azerbaijan, Georgia, and Türkiye – the so-called “Middle Corridor”. The present report looks at the Middle Corridor’s potential and at the challenges that must be overcome to realise it, drawing on the perspective of relevant private-sector actors in the four Middle Corridor countries. Governments along the corridor have invested heavily to improve transport infrastructure, yet important bottlenecks remain due to the geography of the route, the number of border crossings and the lack of regional trade integration. This study, based on surveys from and interviews with the private sector, maps and sequences main reform priorities in relation to regional integration, infrastructure, trade facilitation and supra-national coordination. It suggests that the primary aim should be to develop the corridor not solely as a transit route for actors from outside the region but as an engine of integration and trade integration in Central Asia and the South Caucasus.
The COVID-19 crisis has given renewed urgency to efforts to support the digitalisation of SMEs. However, many SMEs lag behind larger firms in the digital transition as a result of important barriers with respect to skills, innovation, infrastructure, regulation and finance. The SME digital gap slows productivity growth and increases inequalities among people, firms and places. In this context, the Government of Azerbaijan requested the OECD’s assistance in supporting the design and implementation of strategies and policies to foster the digital transformation of Azerbaijan’s SME sector.
The transition from a centrally planned to a market economy is not an easy process and has required strong political will and wide ranging economic reforms in the countries of Eastern Europe and the South Caucasus (EESC).
The Central Asian countries, Azerbaijan and Mongolia have gradually developed their securities markets with their banking sector reforms after the collapse of the communist regime. Although the market infrastructure in the region has been moderately developed with the support of international organisations, however, their securities markets are typically small in scale and still have the weaknesses.
Subnational governments in Asia and the Pacific are key providers of the public services and infrastructure required to achieve the Sustainable Development Goals. Given this role, it is essential that policymakers and development partners understand and support the effective functioning of multi-level governance structures and subnational government finances across the region.
This joint OECD-ADB report provides a comprehensive overview of subnational governments across Asia and the Pacific. It covers over 467,000 subnational governments from 26 countries, which represent 53% of the world’s population and 40% of global GDP. On average in 2020, subnational governments in the region accounted for 29% of total public expenditure (8.8% of GDP), 35% of total public revenue (8.5% of GDP) and 38% of public investment (2% of GDP).
Harnessing unique data from the 3rd edition of the OECD-UCLG World Observatory on Subnational Government Finance and Investment, the analysis highlights how decentralisation and territorial reforms have reconfigured the structures and finances of subnational governments in the region. It covers a range of topics including fiscal rules, financial management capacity, priority-based budgeting, asset management and the use of public-private partnerships.
This chapter describes sustainable infrastructure planning in Azerbaijan and presents current trends in investment in large-scale infrastructure projects. It compares Azerbaijan’s infrastructure plans in the energy, transport, industry and water sectors against its international commitments under the Paris Agreement on climate change and the Sustainable Development Goals (SDGs). The chapter also explores Azerbaijan’s strategic documents for long-term economic development, sectoral development and the environment, including those related to climate change mitigation and adaptation. It identifies misalignments between stated goals and observed investment flows and provides recommendations to improve strategic planning for sustainable infrastructure.
Long-term energy planning is central to a country’s strategic direction. Without it, governments may end up relying on a patchwork of policies and legislation that can be incoherent and ill-suited for the complex challenges countries are increasingly faced with. Good long-term energy planning encompasses domestic and foreign policy, while touching on many key areas of the economy including industry, natural resources and trade. The process involves multiple stakeholders across the government, but also brings in the private sector as well as citizens, as it aims to set out a strategic path towards a clear goal.
Azerbaijan, like many of its peers, is looking to understand how best to meet the opportunities and complexities of the global clean energy transition. The 2014-2015 oil shock prompted the government to consider and draft a slate of new laws and reform packages, and at present efforts are being made to finalise and pass an energy strategy. The price volatility seen in global markets over 2020-2022 is making it even clearer that energy planning using scenario analysis and modelling will help countries successfully respond to new and unexpected challenges in a resilient fashion.
This roadmap details the necessary steps in building that process and exploring relevant policy options that producer economies have pursued, which may be relevant to Azerbaijan. It then discusses data collection and survey design, which are key to establishing the base for energy modelling. The roadmap then looks at energy modelling and its role in policy making.
This roadmap aims to help Azerbaijan reconsider the policy planning process as it looks to connect key laws and reforms into a greater energy strategy. It also sets out a path for Azerbaijan to make this process sustainable and iterative, connecting its policymakers with its statisticians, and investing in in-house modelling capacity. Every country must choose its own energy path, based on its specific needs and resources, but having a long-term plan can smooth out that path significantly.
Since the 1990’s, the countries of Eastern Europe, the Caucasus and Central Asia (EECCA) have made great progress in pursuing economic development that is also environmentally sustainable. The countries, in collaboration with the GREEN Action Task Force hosted by the OECD, has developed a number of policies aiming to improve environmental quality and social well-being, while creating opportunities for strong economic growth and decent jobs in the region.
This report was prepared as the OECD contribution to the ninth “Environment for Europe” (EfE) Conference (5-7 October 2022). In this context, this report aims to: (i) take stock of progress on policy developments towards a green economy in the EECCA countries; (ii) showcase selected contributions from of the Green Action Task Force that integrate environmental and climate considerations into development pathways of the EECCA countries, and mobilise finance for action; and (iii) provide an outlook for the future, including priority actions that the Task Force in co-operation with the EECCA countries should take to enhance the momentum for green economy transition in the region.