Identifier
Created
Classification
Origin
08BAKU1108
2008-11-20 11:22:00
CONFIDENTIAL
Embassy Baku
Cable title:  

FIRST MEETING WITH NEW ECONOMIC DEVELOPMENT

Tags:  ECON ETRD EINV EFIN EAGR ECIN AJ 
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C O N F I D E N T I A L BAKU 001108 

SIPDIS

E.O. 12958: DECL: 11/20/2018
TAGS: ECON ETRD EINV EFIN EAGR ECIN AJ
SUBJECT: FIRST MEETING WITH NEW ECONOMIC DEVELOPMENT
MINISTER SUGGESTS A CONSISTENT MESSAGE ON ECONOMIC ISSUES

Classified By: DCM Donald Lu for Reasons 1.4 (b) and (d).

C O N F I D E N T I A L BAKU 001108

SIPDIS

E.O. 12958: DECL: 11/20/2018
TAGS: ECON ETRD EINV EFIN EAGR ECIN AJ
SUBJECT: FIRST MEETING WITH NEW ECONOMIC DEVELOPMENT
MINISTER SUGGESTS A CONSISTENT MESSAGE ON ECONOMIC ISSUES

Classified By: DCM Donald Lu for Reasons 1.4 (b) and (d).


1. (C) SUMMARY: During his November 11-12 visit to Baku
Senator Corker met with the newly appointed Minister of
Economic Development Shahin Mustafayev. In his first meeting
with USG officials, the new minister stuck closely to his
prepared talking points, emphasizing GOAJ plans to improve
the business environment and diversify the economy. He also
reiterated GOAJ concerns regarding Jackson-Vanik, Section
907, and GSP status. End Summary.


2. (C) Senator Corker met with newly appointed Minister of
Economic Development (MoED) Shahin Mustafayev on November 12.
(Biographical Note: Mustafayev is the former First Deputy
Minister of the Ministry of Taxation. End Note.) The
meeting garnered few insights, as Mustafayev, having been
appointed to his current position on October 31, 2008, stuck
very close to his talking points. He echoed the same
sentiments expressed by other GOAJ officials in recent
meetings: concern for the effect of decreasing oil prices on
the state budget, and the growing need to diversify
Azerbaijan's economy and decrease dependence on oil and gas
revenues. He briefly mentioned the GOAJ policy of using
State Oil Fund (SOFAZ) monies "in case of emergency," along
with planned decreases in expenditures, to help maintain
balance in the budget.


3. (C) Mustafayev spoke generally of President Aliyev's
policies of increasing support to the non-oil sector,
encouraging business investment, and developing industry in
the regions. He mentioned that President Aliyev had "many"
projects planned to imrove the business environment and
diversify the conomy. Mustafayev noted that his Ministry
had just the day before signed an agreement with the Taxation
Ministry to cooperate in creating a one-stop shop for the
issuing of tax control logs to new businesses. (Note: This
is likely in response to the much-touted World Bank "Doing
Business 2009" Report in which implementing a one-stop shop
for starting a business significantly improved Azerbaijan's
ranks. End Note.) Previously, the MoED had issued these tax
control books, with the Taxation Ministry controlling and
regulating them, adding an unnecessary layer of bureaucracy.
He noted that now, businesses can get their tax control books
within three days of registering.


4. (C) The Minister also mentioned some challenges, and
corresponding instruments the GOAJ was using to help improve
the business environment. Mustafayev highlighted GOAJ plans
to develop regional infrastructure, including support for the
tourism and agricultural sectors, and he put in a plug for
the Azerbaijan Investment Company, established in 2006 as a
good vehicle for investment in Azerbaijan. (Note: The
Minister of Economic Development is also the Chairman of the
Supervisory Board of this state-owned joint-stock company.
End note.) He emphasized that Parliament is currently
analyzing competing legislation regarding competition among
business.


5. (C) Echoing other GOAJ officials in recent meetings with
USG officials, Mustafayev also expressed concern that the
Jackson-Vanik Amendment, Section 907 of the Freedom Support
Act, and lack of GSP status were impeding trade between the
U.S. and Azerbaijan. He stressed that WTO accession was an
important goal for the GOAJ, adding that as a small country,
Azerbaijan needed to be able to export goods to the world
market. Senator Corker reassured the Minister that the U.S.
is committed to the principles of free-trade and supportive
of measures which facilitate open competition, noting the
importance to both sides of a strong, financially stable
Azerbaijan.


6. (C) COMMENT: This was the first meeting of a senior USG
interlocutor with this new minister. It is significant that
he is at least rhetorically continuing his predecessor's
focus on economic reform issues, including WTO accession.
Moreover, given the positive press about Azerbaijan's recent
"Doing Business" assessment, Mustafayev will be under
considerable pressure not to let Azerbaijan fall in this
ranking.
DERSE