AZERBAIJAN COMPETITIVENESS AND TRADE (ACT) PROJECT ACT Progress Report for FY2013 Quarter 1

The project's primary objective is to enhance the country's economic growth and development by addressing key challenges in the domestic business environment, trade environment, and targeted agricultural value chains. In the first quarter of fiscal year 2013, the project made significant progress in achieving its objectives. Component 1, Domestic Business Environment Improved, focused on building and sustaining the case for economic reform in Azerbaijan. Activity 1.A involved the development of a comprehensive economic reform strategy, while Activity 1.B aimed to facilitate changes to business-related laws, regulations, and administrative procedures. Sub-activity 1.B.1, Tax Reform, made notable progress, with the Ministry of Economic Development (MOED) and the State Committee on Property Issues (SCPI) working together to develop a new tax code. Sub-activity 1.B.2, Property Law Reform, also achieved significant milestones, with the MOED and SCPI drafting a new property law that addresses key issues related to land ownership and use. Component 2, Liberalized, More Transparent Trade Environment Developed, focused on improving the trade environment in Azerbaijan. Activity 2.A involved support to the Government of Azerbaijan (GOAJ) in improving the trade environment, while Activity 2.B aimed to support the GOAJ on procedures and mechanics of WTO accession. Sub-activity 2.A.1, Trade Environment Legal Reform, made notable progress, with the MOED and the Ministry of Foreign Affairs (MFA) working together to develop a new trade law that aligns with WTO standards. Sub-activity 2.B.1, WTO Accession, also achieved significant milestones, with the GOAJ submitting its application for WTO membership. Component 3, Targeted Agricultural Value Chains Improved, focused on improving the competitiveness of targeted agricultural sub-sectors. Activity 3.A involved the identification of sub-sectors that exhibit potential for competitive growth, while Activity 3.B aimed to improve the competitiveness of targeted sub-sectors. Sub-activity 3.B.1, Direct Value Chain Assistance, made notable progress, with the project providing support to farmers and businesses in the horticulture, dairy, and aquaculture sectors. The project also established demonstration farms and provided training and extension services to farmers and businesses. In addition to these accomplishments, the project also made progress in improving access to finance for small and medium-sized enterprises (SMEs) and farms, particularly in rural areas. Sub-activity 3.D.1, Agricultural/Rural Lending and Leasing, involved the development of new financial products and services that cater to the needs of SMEs and farmers. The project also worked with local banks to develop new lending and leasing products that support agricultural development. Overall, the ACT Project made significant progress in the first quarter of fiscal year 2013, achieving key milestones in its objectives to improve the domestic business environment, trade environment, and targeted agricultural value chains in Azerbaijan.