Challenges and Opportunities in Azerbaijan's Liberated Territories: The Call for Private Sector Involvement

President Ilham Aliyev has urged the private sector to actively participate in the reconstruction and development of the recently liberated territories of Azerbaijan, emphasizing the need to focus efforts on building houses, factories, and enterprises in these regions rather than in major urban centers like Baku and Sumgayit.

Under the "I State Program on the Great Return to the Liberated Territories of Azerbaijan" spanning 2021-2023, significant restoration and construction work, covering an area of 10 thousand square kilometers, were undertaken with a budget allocation of $7 billion. The government has introduced incentives, including exemptions from Value Added Tax for imported equipment and materials for businesses operating in these territories, as well as tax exemptions for profit, income, land, and property.

Rufat Guliyev, a member of the committee on Economic Policy, industry, and entrepreneurship of the Milli Majlis, in an interview with Turan stressed that the private sector's involvement in building houses and establishing businesses in the liberated territories would happen gradually. He stated that while around 6-7 thousand people have been relocated to these areas, the aim is to increase this number to 140 thousand within a year. The private sector is already engaged in the ongoing construction of houses.

Guliyev outlined the benefits for entrepreneurs in Karabakh and Shargi Zangazur, such as tax exemptions and customs duty discounts, creating a free production zone for at least 5-7 years. He expressed optimism that as more people move to the liberated territories, entrepreneurial activity, especially in areas like public catering and services directly related to the population, will increase.

However, obstacles persist, notably the presence of landmines. Guliyev acknowledged President Aliyev's statement that it would take 25 years and $30 billion to clear the territories completely. He called for officials to be more supportive, loyal, and attentive to entrepreneurs, as he believes that entrepreneurial activity in these economic zones will significantly rise within the next 1-2 years.

Economist Rovshan Agayev expressed a critical point of view in an interview with Turan, noting that the potential of the private sector remains weak. He emphasized the need for a thorough assessment of the benefits and questioned the demand for houses in Karabakh, cautioning that business decisions should not be solely based on presidential statements.

Agayev underscored the broader issue of unequal conditions for businesses, expressing skepticism about equal treatment between businesses operating in Karabakh and those with close ties to the authorities. He called for attention to actions rather than words, emphasizing that the success of business initiatives depends on how legislation is applied in practice. Experts interviewed by Radio Liberty echoed the sentiment that the effectiveness of the government's initiatives will be contingent on the fair and transparent implementation of relevant legislation.