Even a marathon starts with the first step. So, some food for thought can inspire changein Azerbaijan. In this country many see a lack of political reform and areworried about the human rights situation and minorities.
My idea is that a shared agenda and in this case Regional Economic Development can do some good.
Azerbaijan has some similarities with my country, The Netherlands. It has more than 9.5 million inhabitants,10% belongs to an ethnic minority. The last decade showed a steady economic growth, more export and tax facilities and serious attempts to diversify the economy, to decrease the importance of the oil and gas sector.
Next to the energy sector, the banking business has been growing. Both are strongly top down orchestrated by the central government. A lot of potential is available in the tourist sector, food and agriculture, other natural resources and the industries based upon them like construction, ICT, machinery, chemistry and sustainability.
But originating from a former Soviet republic, the young independent Azerbaijan republic has a small group of people who strongly influence the economy, society, public administration and jurisdiction.
Although women have the right to vote, the security situation and the social economic climate are changing rapidly.
As well from inside and from outside Azerbaijan we hear more and more signals concerning the democratic process, the effectiveness of the administration, the distribution of wealth and missed economic chances.
This also results in a sharpened contrast within society, a less constructive dialogue, more tension in society and above all; untapped economic potential. If the dialogue stops, there is more damage than just silence.
Platform
To resolve this situation it may be fruitful to create a mutual platform of interest which the different parties involved can agree upon. In this way they could see the benefits, not only for themselves but for each other. Stimulating regional economic growth and development might be the trigger. It is important is to find the benefits.
Advantages for the central government in Baku (besides the 10 economic regions, 66 districts and 77 cities) are for instance: fiscal, financial and economic diversification by further reducing the dependency on the oil and gas revenues, innovation, a more flexible and growing of the labourmarket, development and sharing of knowledge etc. etc.
An advantage for civilians and entrepreneurs is that it creates a more open and attractive business climate with more opportunities for civilians to start their own company and expand existing enterprises, growth of wealth, financial independence, creativity and self-development.
The central question is now: how can we create an inviting businessclimate that triggers the economy as a whole? I would say: limiting administrative and fiscal burdens, making the economy more open and transparent, providing legal certainty, fighting corruption and sharing benefits are some logical and necessary steps forward. And I noticed some steps have already been taken.
The crucial element however is that we should start on a regional basis. The region is and always has been the workspace for small and medium sized companies. The region is extremely relevant for their labourmarket, supply and demand relationships with others, cooperation with other businesses and sectors, relation with relevant knowledge institutions and services and naturally the market is around the corner.
How could this work in Azerbaijan? The existing 10 coherent economic regions could be transformed towards regional economic catalytic converters with a clear mandate. Such a small Regional Economic Council could consist of independent representatives from the region, from the business sector, from centres of learning and from the government. Together they formulate a tailormade regional economic programme. This so-called Triple Helix or Golden Triangle format is independent and has equal influence. The council is policy making, it also facilitates and monitors the results. Coherent topics in the regional programme are f.i.: strengthening of the businessclimate, increasing start-ups and spin offs, clustering and cooperation between enterprises and education, innovation and experimentation, export growth, knowledge transfer, business finance and corporate housing.
To accomplish these targets a separate Regional Economic Development Agency is responsible for the actual realization. They have the instruments, like finance, business information and advice, business one stop shop support and specific stimulating projects to achieve the targets in time.
There are many advantages and reasons to organise policy making and realization in this way and make different bodies responsible. Transparency, checks and balances, targeted and effective are some aspects.
This regional tailormade approach operates in a national framework that roughly reviews the plan, facilitates and stimulates synergy.
It may be worthwhile to discuss this approach and – if the different parties agree – it may be worthwhile to start with a couple of pilot regions for instance the quite different regions in the south and north west, Lankaran and Ganja – Gazakh.
This idea is based on moving forward on mutual respect, cooperation and results that count.
What matters is what we share, not what divides us. If parties agree and are prepared to work together, regional economic development can be the trigger, focus and starting point for further and necessary changes in Azerbaijan.
*Robert van Engelenburg is an
expert in regional economic developments.
http://www.neurope.eu/article/regional-economic-development-could-trigger-change-in-azerbaijan/