Last year began with a drop in oil prices and the first wave of devaluation. That’s when everyone in Azerbaijan immediately recalled the private business, in general, and small and medium entrepreneurship, in particular.
Almost in all his speeches in the Ministers’ Cabinet, President Aliyev stated about the need for dragging the country from oil dependency, assistance to business. For the first time he stated that numerous inspectors were engaged in racket, abusing the entrepreneurs. He even abolished several secondary inspections.
The government started reporting on successes achieved in that sphere, on new jobs and development of the private sector. In his New Year address to the nation, the President stated about 7% increase in the non-oil sector.
Nevertheless, ‘visible’ enterprises represent a real picture of the apocalypse both, in Baku center and in its suburbs.
The area around Azi Aslanov Metro Station was considered to be one of the best residential districts. There were corresponding shops, with all life necessities – furniture, building materials, office appliances, cloths and inexpensive family cafés. However, this year everything has started abruptly changing.
There used to be a hardware store right here in the beginning of the year. The owner says, he paid AZN600 monthly rent. However, in the end, the sum turned out to be too high for him. Döner café was opened here after the store had been closed. Döner (sandwich type) cost just AZN1 here, the salesman tried to please the clients, his brother delivered ordered döners by bike. The döner café closed three months later. By the way, they also offered a very tasty soup “marji (lentil soup) just for AZN1.
Not long ago there was a drug store in the empty space nearby. It was opened after the Internet-Club had closed. The Internet-Club’s owner (he was the only employee there) told that he could hardly make both ends meet. He began selling hot tea and coffee to his clients. Once there was a tax inspection there. The owner swore, his documents were in order, he issued checks and he had no money, but the inspectors were rigid. Then the owner said he would close his business. The man promised and did it.
Here is one more former drug store. According to deliverers and chemists, selling medicaments, the business became unprofitable after the state had started regulating the medicine prices.
There was a currency exchange office here. By the way, two similar offices were on the opposite side and both have been closed this year. When AZN dropped in February, the state immediately accused some dozens of currency exchange offices that, as it turned out, were engaged in price gouging. The second wave of devaluation was followed by the second wave of struggle against “profiteers. At present, nobody is surprised at closed currency exchange offices and a queue in front of the single bank, where dollars are sold.
At first sight the center seems to be more trouble-free than suburbs, but it has been also affected.
A café with a laconic name “Fz, opposite Akhundov public garden right in the city center, has been closed. Last time clients were served slowly there and the food was oversalted. The entrepreneurs had no change to improve everything – there were few clients last time and the crisis put an end to the unsuccessful business.
The Chamomile (Romashka) shop was valuable not as a shop – in many other places food is cheaper and the choice is greater, but rather as a place where meetings were appointed. It seemed that the Chamomile shop would always exist. For many residents of the center seeing the announcement “For rent on its shop window is as terrible, as finding the ruins in the place of their residential buildings.
“Finnegan’s has been closed’. It took Baku Facebook several days to ‘digest’ this news. Though the famous pub was ruinously expensive, but many people liked it. The pub, like The Chamomile shop, was perceived as something sacrosanct. The Facebook had managed to conduct a “pompous wake ceremony over Finnegan’s by the time when one of the Facebook users said it was closed for repair. Farewell to stampede at the bar on the Saint Patrick’s Day! Farewell to unnaturally expensive cocktails! Farewell to live music on Saturdays, to tattooed girls and blind to the world foreigners!
Now it is dark and quiet here. However, there are no fearsome ‘for rent’ announcements yet and this allows one to hope for better.
What is the reason for the people’s mass escape from business? It’s quite simple – it’s really a crisis, or, to be more precise, Manat exchange rate drop. If arbitrariness of the Tax Ministry officials, monopoly on the supply of spirits and some other categories of products, tax rates themselves, that nobody even thought of reducing to support the private sector, could not manage to knock out of the stride the most persistent entrepreneurs for so many years, a drop in demand has managed it.
Manat became twice cheaper against the US dollar within a year. Prices for most of the products increased twice. The wages remained the same. Thus, anyone who is paid a salary in Manats, can now buy half the goods and services. For many sellers of those goods and services it was a real disaster.