Page 44 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.71, # 2, 2014, pp. 42-65

Moldovan exports. By contrast, that figure was about 35 per cent in the case of Russian,

Armenian and Kyrgyz exports and 60 per cent in the case of Azerbaijani exports.

Azerbaijan is the EU's largest trading partner in the Caucasus, although trade primarily

relates to cotton, oil and gas. In 2003 Azerbaijan had a positive trade balance: exports to the EU

amounted to Ђ 1.3 billion, while imports reached Ђ 0.8 billion. Trade in energy was the most

significant: Azeri exports were worth Ђ 1.23 billion. Azerbaijan's share in EU's external trade

was 0.1% in imports and 0.1% in

Profiting from the membership of WTO Azerbaijan has to create pure competitive

condition and develop the national production. Azerbaijan has to obtain the maximum

concession from the negotiations (not to apply all the rules and obligations of the organization to

Azerbaijan in next 10-15 years) with WTO or we have to try to direct their attention not only to

trade liberalization but also to solve the problems in the rural economy of Azerbaijan. The

membership process and the requirements of WTO don’t have to create obstacles to the

development of local industry sector of our country. The creation of good condition for newly

formed market economy has to be one of the main directions of the collaboration.

Telecommunication and postal service improvements are a prerequisite to sustainable

economic growth, and open access to competitive systems are needed for WTO membership.

Privatization process of the state institutions creates pure competition condition. However

the existence of shadow economy is one of the factors which hinder the development process and

pure competition.

According to the analysis which has been led by a member of group of the fiscal analysis

on tax administration and fiscal reform USAID, the general scale of shadow economy in

Azerbaijan makes 60,1% from the GDP. For comparisons in Russia this parameter makes 42,2 %

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