Small business sector embraces Garabagh An analysis by Caliber.Az

The wide-scale state funding and rapid rehabilitation of the infrastructure have acted as a catalyst in attracting private businesses to the Garabagh and East Zangezur Economic Districts. According to data published on August 28 by the State Statistical Committee, over 1,200 individual entrepreneurs (IPs) were established in the liberated territories of Azerbaijan in the first half of this year, and the number of new jobs has increased by 2.4 times.

Projects in self-employment and micro-businesses are also developing very actively in Garabagh, in particular thanks to the establishment of the Garabagh "DOST" regional centre and the Regional Centre for Professional Development.

For the third year in a row, the Garabagh Region Revival Program plays the role of the most important catalyst of supply growth in the local labour market, impressively involving thousands of specialists and capital investments. According to the data of the Finance Ministry of Azerbaijan, the total expenditures for the restoration of the liberated territories for the period 2021-2023 will amount to 9.7 billion manats (approx. $5.7 billion).

If we take into account the implementation of the so-called "Great Return" initiative as well as the creation of residential and social infrastructure in the liberated territories and the formation of agrarian and industrial clusters which will contribute to the gradual return of about 35,000 former Internally Displaced Persons (IDPs) by 2027, this will be an important source of job creation for many years to come.

For the implementation of large-scale housing construction, as well as the setting up of infrastructure for communal and distribution channels and the construction of social and commercial facilities in regenerated cities and villages, tens of thousands of builders, engineers, service specialists, project, consulting and transport companies will be engaged.

The "Aghdam Industrial Park" will have a significant contribution to the creation of new jobs and investments. In its initial stage, it is expected to invest over 50 million manat, with the increase of investments up to 100 million and more in the subsequent period. At the same time, more than 30 million manats are expected to be injected into the Economic Zone of the Araz Valley with the subsequent multiplying of investment flows. Only these two large industrial clusters will be providing employment for more than 7,000-8,000 people at the peak of their development.

By 2030, tens of thousands of jobs are expected to be generated in the Garabagh region, mainly in the areas of industrial parks, agriculture, mining and tourism. Taking a closer look, only in the agricultural sector there will be 15,000 - 17,000 jobs, in mining 1,500 - 2,000, in the tourism sector about 1,500 - 2,000 and a total of 10,000 - 11,500 jobs will be provided in the operations of small and medium enterprises (SME).

To achieve this goal, a number of large agrarian-industrial and service projects are planned to be implemented in the liberated territories, including with the participation of foreign capital. Turkish companies are in the lead with this, planning the development of the mineral resources of the Garabagh region, including gold and copper deposits, as well as developing the sphere of tourism, agricultural processing, production of clothing and consumer goods, construction materials, etc.

At the same time, several requests by Kazakh companies have been received, wishing to implement their business ventures in Garabagh, as well as have been received from entrepreneurs of Hungary, Uzbekistan, the United Kingdom, Israel, Pakistan and others, from 40 countries in total.

In particular, as a result of the period of reconstruction work, the number of potential projects sent to Azerbaijan's Ministry of Economy by business representatives has already approached 1,500 with a little less than a third of those applications being from foreign companies. The total amount of private investments, finalized and already invested in Garabagh amounted to 300 million manats (approx. $176 million) this spring.

However, together with projects implemented within the framework of state financing or with the participation of large local and international companies, the Garabagh and East Zangazur Economic Districts are very attractive for SMEs and micro-businesses, ready to invest their own funds in various business ventures.

The report of the Statistical Committee of Azerbaijan, published just yesterday on August 28 in the mass media, reports that in January-June 2023, 69 new enterprises and organizations were created in the liberated districts, as well as 1,238 new subjects of individual entrepreneurship. According to the committee, 623 new jobs have been created as a result of these undertakings.

In comparison with the first half of last year, the number of new enterprises and organizations increased by 68%, the number of individual entrepreneurs by 11%, with the total number of new jobs increased by 2.4 times.

It is noteworthy that the drivers of the growth of activity of SMEs in the liberated territories are the Fuzuli, Zangilan, Lachin and Aghdam districts, as well as the city of Shusha, leading in the rate of return of former IDPs and the volume of construction of residential and social facilities. At the same time, according to the latest data from the statistical bureau, the Aghdam district is leading in the number of active individual entrepreneurs - 472, followed by the Fuzuli district with 333, Lachin - 117, Gubadli - 97, Jabrayil 73 and Zangilan 48, etc.

At the same time, the number of former IDPs and other citizens of Azerbaijan ready to participate in self-employment projects in the Garabagh region is growing. Let's recall the initiative of the State Agency for Employment and Financial Support of the Unemployment Insurance Fund, operating under the Ministry for Labour and Social Protection, which implemented a self-employment program in 2017. Over the past six years, over 60,000 unemployed families have received help in establishing micro- and small businesses.

By the end of 2023, the foundation plans to involve about 17,000 Azerbaijani citizens in development projects and self-employment. And, today, the thrust of the self-employment program is aimed at attracting labour to the liberated territories. Business people are being provided with inventory, equipment and funds for the development of apiaries, small livestock farms, implementation of projects in other areas of the agricultural sector, as well as the creation of small service and trade facilities, etc.

Such undertakings within the state program of the "Great Return" are actively implemented in the Lachin and Fuzuli districts with the support of specialists of the State Agency for Employment. In Lachin, for example, some 35 people have recently been registered for the self-employment program and will be provided with business training and later with the necessary assets to start a micro-business. This is also the case in the Fuzuli region, where some 144 families could be involved in various self-employment activities, IPs and training courses in a short period of time.

The opening of the Garabagh Regional "DOST" Centre and the Garabagh Regional Professional Development Center in Barda is seen as a very important step in this regard. As it was noted during the event held in the first half of August with the participation of the head of state, the scope of the Garabagh "DOST" centre will include nine administrative districts with 159 services to be provided based on the "single window" principle in 15 directions.

In turn, the Garabagh Trade Center has formed an infrastructure for the annual training of 1,200 citizens in 48 professions, including tailoring, sewing, designers, cooks, waiters, hairdressers, make-up artists, locksmiths, carpenters, turners, carpenters, masters of furniture, painters, welders, plumbers, etc. All these future specialists will be in great demand in the dynamically developing cities, settlements and industrial zones of the reviving Garabagh region, which in the coming decade is destined to become the driver of the economic growth of Azerbaijan.