Ousting foreigners from the market

Customs duties on imported foodstuffs will be increased in Azerbaijan starting from November 1, 2016. The government officials assure, they thus intend to protect the local manufacturers against foreign competitors. The imported meat, eggs, fruits, vegetables, nuts, alcohol, juices, building materials and ceramic products, all that either will become more expensive, or completely disappear from the market.

The Cabinet of Ministers, that made the aforesaid decision, believes that Azerbaijan can and should provide itself with all those products. “The increase in customs duties on the number of goods imported to Azerbaijan will, first of all, lead to the increased volumes of domestic production, Aydan Aliyev, the Head of the State Customs Committee of Azerbaijan, told reporters on Monday, October 3. “All of us give preference to Azerbaijan-made foodstuffs and agricultural products. Now, they will simply be able to compete with foreign products imported to Azerbaijan at dumping prices. If the country produces chicken meat, eggs and other foodstuffs, then why should it pay foreign currency for the imported frozen products?

The customs duties are being increased amidst the economic crisis in Azerbaijan. Bank Standard, one of the hugest banks in the country, had been closed two days before the Cabinet of Ministers made its decision, whereas the inflation rate, projected by the State Statistics Committee for this year, will make 10-12%.

Until now, the imported goods were imposed a standard import duty amounting to 15% of their value. The foodstuffs are mostly imported from Russia and Turkey, and also from Iran, Georgia and some other countries. A share of imported products in an average Bakuvian’s consumer basket makes no less than half, and it’s less in the regions.

Many experts believe that ousting foreigners from the market is the same as ‘putting the cart before the horse’, and that it’s not the competition with import, but rather the lack of infrastructure within the country, that should be blamed for the lack of domestic products. Here’s what Toghrul Mashalli, an expert economist, wrote in this regard on his Facebook page: Azerbaijan is one of the huge suppliers (but it’s far from being the key one) to the Russian potato market. But it doesn’t supply ordinary, ‘standard’ potatoes, but rather new potatoes (that’s roughly from April-May till June). As for the rest of the year, we don’t have potatoes, since there’s simply nowhere to store them. Therefore, we have to import the Georgian, Turkish, and even the Russian potatoes (they practically don’t export potatoes).

Another example is related to apples. A ‘miracle’ happened to Quba farmers [Quba is a city in Azerbaijan, famous for its apples] a couple of years ago. They chanced to have a high yield. But what do you think happened next? They didn’t know where to throw the apples, because they had nowhere to store them (there is absolutely no any infrastructure), whereas immediate supply to the Russian market would have killed the prices. And, what is more, we were supplying only fresh apples. It’s impossible to get Quba apples the rest of the year, so Azerbaijan has to import apples nearly from Latin America.

Natig Jafarli, a prominent politician and economist, says: “Earlier, there were at least some hopes that having become a member of the World Trade Organization (WTO), Azerbaijan would stream into the civilized countries’ space. There were talks on this issue. But it’s obvious now that the country has no intention to become the WTO member. The reason is simple: there is allegedly some individual path of development, which is actually a pretext for protecting the interests of oligarchs, who keep a firm hand on the domestic market.

Judging by the reaction on social media, the price growth is exactly what people fear most.

“The prices will increase right now, as the supermarkets will be changing the price tags, rather than in a month, when this decision will take its effect.

“It is said that 100gr. of locust contain as much as 1,500kcal. This information may save our lives next year.

‘Winter is coming!'[A recognizable quote from the Game of Thrones’]

Eldar, a small store owner: “I’m not going to change prices until I get new goods at a different price. Besides, all the eggs and Russian vodka have been snapped up in my store today.