USAID: Implementation of reforms is making Azerbaijan much more attractive for investment - INTERVIEW

Interview of Report News Agency with USAID Mission Director to Azerbaijan Jay Singh.

- How do you assess the structural and economic reforms carried out in Azerbaijan, and what contribution does USAID make to the programs implemented in the country? What are your recommendations on the further implementation of reforms in the country?

I have seen a significant amount of activity in the country related to the reforms. So, I highly commend the government on their approach to really look at the reforms as a way to catalyze their economy and the judicial system. These are all good movements, and it makes at least some progress, which is what we are all looking for. It is making Azerbaijan much more attractive for investment. And it's a key thing for us. We would like to see U.S. companies look at Azerbaijan as a destination for investment. We are watching the reforms and seeing how they get implemented. We hope that things move quickly. The changing of personnel is also a good sign. The President and his cabinet are looking at much younger and forward-leaning people. It is actually a very exciting time to be in Azerbaijan. This is the right time to look at Azerbaijan as a destination, given the changes. But the issue will be about how quickly the reform processes will be implemented. But I have confidence that this will move fast.

In terms of recommendations, one of the things I would like to see is if they are to really expand the non-oil sector, the government should reach out to the business associations, those private sector associations that are focused on economic development.

Small changes are also necessary to boost exports and food safety requirements so that Azerbaijani products are more competitive.

One of the biggest barriers for U.S. companies in Azerbaijan, and we have said this before, is the protection of intellectual property rights, making sure that judicial reforms take place, and NGO registration, which is not a clear process for many people. Those are the types of things that people look at before investing.

I think the government is coming around to really looking at a much more systematic process. There are some steps to be taken, but I think Azerbaijan is taking those steps.

- What are the future plans of USAID for cooperation with Azerbaijan, and which directions will be given preference?

Over the last year, we have tried to make our policies and projects more transparent to the government, and have them be a key partner in implementing them. We have also been supporting the non-oil economy, which, I think, is the major priority for the government right now. I have aligned our projects to support the non-oil economy, agriculture, and tourism. We will also work with the government on engaging private sector associations and the government so that there is a dialogue between the two sides. This will help the government tailor its reforms to benefit farmers and private sector associations.

- How has the agency’s budget for Azerbaijan changed over the past 5 years? What factors determine the increase or decrease in the volume of assistance to the country? How has the 2019 budget been executed and how much assistance has been laid for 2020?

The U.S. government has invested $1,2 billion into Azerbaijan. In terms of USAID, the estimate is about $394 millionover the last 27 years. For the past few years, we have been stable at $7,5 million a year. This is largely because the economy of Azerbaijan has been doing very well. Our programs are more co-investment, providing the technical know-how and expertise that the government wants so they can boost their income. Our investment in technical assistance to farmers and agribusinesses resulted in 220 assisted firms investing over $11.2 million in improved technologies. We've seen about a 600% return on investment in agriculture. For example, for every dollar we have spent on agriculture we raised about 6-7 dollars. That is what we are showing with our cooperation with the government, it is a very fertile place for investment. That tells us about the potential of Azerbaijan. In terms of numbers, for the last 5 years we have increased $75 million in exports for farmers, that includes $25 million to non-traditional markets, like the Gulf and Europe.

We do not have figures for 2020 since the complex budget process has not been completed.

- This summer, the U.S. administration has frozen part of Congressional funds to help foreign nations. Has this decision affected Azerbaijan somehow?

No, I think our government likes Azerbaijan, so we have not been affected by it. The Mission’s work speaks for itself. Congress likes what USAID is doing in Azerbaijan. We've been able to demonstrate that our small investment is a big payoff here.

- As you know, USAID supported the development of various industries in Azerbaijan, especially agriculture, food industry, etc. What are your plans for food security cooperation?

I commend the Azerbaijani government for its commitment to building an effective and functional food safety system, and I am pleased that USAID is able to partner with the Azerbaijan Food Safety Agency, the Azerbaijan Food Safety Institute, and other relevant actors from the public and private sectors. This is a great partnership. We want to create the capacity and quality control so that when products leave Azerbaijan, they are certified and people feel comfortable buying it. So, we are working with the Food Safety Agency and they have shown a lot of interest. We want to continue to work with them and Azerbaijani agribusinesses to help them meet international quality and safety standards and achieve internationally recognized certifications. This will strengthen the international competitiveness of Azerbaijani production.

- Is USAID assistance related only to the public sector or are there any projects in the private sector? Is it planned to support export opportunities of private business, as the Agency does in other countries of the region?

One of the things we did over the last year is we set up a new private sector activity program. The program is very focused on helping the government as well as entrepreneurs to export to Europe, U.S.and also the Middle East. The U.S. is a big market. Our whole agenda is to make sure that we can support entrepreneurs here to also export to the United States. One of our prioritiesis also to build a bilateral economic partnership between the entrepreneurs of our countries. The recent Oklahoma-Azerbaijan Agricultural Forum is a good example. We hope that we can do more, I want to do at least 2 trade shows in different states of U.S. The way our economy works is that it is not the federal level that is important; it is critical to work with state governments. For example, the Agricultural Forum in Illinois in April 2019 has already resulted in $1.2 million worth of deals between U.S. and Azerbaijan agribusinesses.

- Did USAID extend support to occupied Karabakh?

We have a congressionally directed humanitarian program on demining that has been going on for several years now. It's very limited in scope, it is mainly for demining. So that when peace does break out, there will be safe places to go back to. USAID does not support any other activities in Nagorno Karabakh. As a Co-Chair of the OSCE’s Minsk Group, the United States is committed to working with all sides toward a peaceful solution to the conflict based on the core principles of the Helsinki Final Act. We recognize it as a part of Azerbaijan.

- Azerbaijan has already joined the donor community in several international organizations, but has long been providing humanitarian assistance or assistance to the development of various countries. Has the country taken the initiative to participate in the USAID program to assist other countries?

We applaud the efforts of Azerbaijan's International Development Agency (AIDA) under the Ministry of Foreign Affairs to assist countries around the world on health issues, education, resolving epidemics, infrastructure and good governance. The Ministry of Emergency Situations of Azerbaijan is also taking steps to become a member of the International Search and Rescue Advisory Group. This would allow USAID to have a new partner like Azerbaijan to call on for help in case countries face some disasters or other problems.