Natig Jafarli: Customs Policy of Authorities Reflects Interests of Market Monopolists

Baku / 28.08.18 / Turan: Azerbaijan has not created a customs system that meets international standards. The existing system more reflects the interests of domestic large players, who have a dominant position in the market.

This opinion was expressed by the Executive Secretary of the Republican Alternative Party, economist Natig Jafarli in an interview with the Voice of America.

This approach, he continued, does not meet the modern world philosophy of customs, which is aimed at supporting the domestic market and domestic producers. In Azerbaijan, even for goods produced domestically, very large customs duties are established.

Declaring the support of local producers and entrepreneurs, the authorities raise customs duties and taxes on certain goods. How true is this against the background of plans to join the WTO?

Asked to express the attitude to this policy of the government, the expert said Azerbaijan is negotiating not so much about joining the WTO, but about delaying this process. Since 1997 Azerbaijan has been simulating negotiations on WTO accession for 21 years already.

The authorities are trying to explain this with taking care of domestic production, and above all, agricultural products, saying that after accession to the WTO state subsidies in this direction will have to be stopped.

In fact, according to Jafarli, this is not the right approach. For, according to WTO rules, for a transition period in the first five years, or even 10 years, there are certain benefits.

The government of Azerbaijan, under the pretext of the need for subsidies to agriculture, shirks entry into the WTO.

After 2003, Georgia and Armenia became members of the WTO, and in 2015 the Russian Federation and Kazakhstan joined the organization.

The expert considers that the government's arguments are not well-founded. In his view, WTO membership serves to expand the competitive environment, rather than narrowing it.

The government claims that it does not join the WTO because local producers cannot withstand competition.

How complementary are the transit and customs policies of the Azerbaijani government? Answering this question, Jafarli said the Azerbaijani government shows interest in turning the country into a major logistics center at the intersection of the North-South and East-West transport corridors.

To do this, they spend a lot of money. Azerbaijan became the main sponsor of the Baku-Tbilisi-Kars railway and provided a $ 500 million loan for the construction of a railway in Iran that would provide the North-South corridor.

Logically, the government should apply the "green corridor" to the customs to remove obstacles to the passage of goods. However, nothing has been done in the legislation and regulations of customs for this purpose. If Azerbaijan wants to make money on transit, then it must ensure an accelerated crossing across the border.

The ambiguous reaction is also the introduction of new restrictions on duty-free importation of goods imported into the country by citizens. This is the restriction of duty-free import of tobacco products and alcohol and the sharp increase in duties for the registration of imported mobile devices,

According to Jafarli, in the world practice the imposition of large duties and taxes on alcohol and cigarettes does not cause a negative reaction, because this helps to reduce their consumption. However, in this case we are talking about the import of goods for personal consumption.

Therefore, it is more to the advantage of large players in the alcohol and tobacco market, which occupy dominant positions in the domestic market. Therefore, one cannot say that this is done to protect public health.

According to Jafarli, limiting the duty-free importation of cigarettes and spirits will also contribute to the growth of smuggling and corruption.

It is necessary to conduct a more thoughtful policy in this area. As for the increase in fees for the registration of mobile phones, this has affected individuals.

Legal entities, that is, large networks, can sell phones comfortably and with less competition. This business is controlled by officials, and these restrictions will bring them good profits, the expert believes. -03B06--