A new phase of economic development in Sumgait city (2003-2008)

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A new phase of economic development in Sumgait city (2003-2008)

Ibrahimli M., Sumgait State University

Abstract

The creation of a special economic zone in Sumgait and the directions of specialization of the activity of this zone, all allowances, business guarantees given to foreign and domestic investors, and concessions to local enterprises and organizations on their activities are intended to be reflected. Extensive works were carried out in Sumgait city in the field of implementation of the Decree of the President of the Republic of Azerbaijan dated February 11, 2004, on the approval of the State Program for the socio-economic development of the regions of the Republic of Azerbaijan for 2004-2008 and the integration of Sumgait to the world, the establishment of economic and cultural relations. During this period, the indicators of the gross domestic product were on the increasing dynamics, foreign investment was invested in various areas of the city, which mainly included industrial enterprises, and attention and care was paid to the development of free entrepreneurship in the city. Important works on the restoration and development of the petrochemical industry based on modern technology were carried out in Sumgait, production areas, construction and installation works were started, and the dynamic pace of development covering socio-economic areas throughout the city was successfully continued.

Keywords: economy, foreign economic relations, investment, entrepreneurship, industrial enterprises.

Аннотация

Новый этап экономического развития города Сумгаит (2003-2008 годы)

Ибрагимли М.Б., Сумгаитский государственный университет

Предусмотрено создание специальной экономической зоны в городе Сумгаит и определение направлений специализации деятельности этой зоны, все льготы, бизнес-гарантии, предоставляемые иностранным и отечественным инвесторам, а также льготы на деятельность местных предприятий и организаций. В городе Сумгаит проведена большая работа в сфере интеграции города в мировое пространство, налаживания экономических и культурных связей, реализации Указа Президента Азербайджанской Республики от 11 февраля 2004 года об утверждении Государственной программы социальноэкономического развития регионов Азербайджанской Республики на 2004-2008 годы.

В этот период показатели валового внутреннего продукта находились в возрастающей динамике, в различные отрасли города, в частности в промышленные предприятия, вкладывались иностранные инвестиции, уделялось внимание и забота развитию свободного предпринимательства в городе. В Сумгаите были проведены важные работы по восстановлению и развитию нефтехимической промышленности на основе современных технологий, начаты производственные, строительно-монтажные работы, успешно продолжены динамичные темпы развития, охватившие социально-экономические отрасли во всем городе.

Ключевые слова: экономика, международные экономические отношения, инвестиции, предпринимательство, промышленные предприятия.

Starting from the second half of the 20th century, the number of free and special economic zones in the world began to increase sharply. It has revealed itself as one of the intensive development directions of the world economy. In this regard, the concepts of creating a special economic zone in Sumgait should be developed and widely discussed. In these concepts, the directions of specialization of the zone's activity, all allowances, business guarantees given to foreign and domestic investors, concessions to local enterprises and organizations on their activities should be reflected. In addition, the activities of banking, currency and domestic markets in the special economic zone to be created in Sumgait should be covered in the concepts. The activity of the special zone to be created in Sumgait should be directed in such a way that it can provide deep assistance in solving specific economic issues of the republic by taking into account the modern state of the zone, the scientific and technical potential of its ecology, and geographical conditions. To be able to develop rapidly in terms of regional development as an area economy. The concept of creating the Sumgait special economic zone should ensure the realization of the specific goals.

Sumgait has a unique place in the world integration and establishment of cultural relations. When looking at this history, the first thing that comes to mind is the relationship of Sumgait with the twin cities. Despite the existing restrictions on foreign relations during the Soviet era, Sumgait established friendly relations with the cities of several countries. Even after Azerbaijan gained independence, these relations were further expanded and are being continued now.

Sumgait has established fraternal and partnership relations with 13 cities of the world. Sumgait's friends include Ludwigshafen in Germany, Pitesti in Romania, Zhuzhou in Hunan province of the People's Republic of China, Linz in Austria, Genoa and Bari in Italy, Ceyhan in Turkey, Mogilev and Belostok in Belarus, Rustavi in Georgia, Aktau in Kazakhstan, Cherkassy in Ukraine, and Nevinnomyssk in the Russian Federation. Sumgait has friendly and cooperative relations between these cities. In the near future, Sumgait will establish relations with the Bulgarian city of Burgas.

Sumgait has a street named after the city of Cherkassy and a park named after the city of Ludwigshafen. Accordingly, there are streets named after Sumgait in these cities. Within the twinned cities project, mutual visits of delegations and a number of projects in the economic, cultural and humanitarian fields are carried out regularly.

Extensive works were carried out in Sumgait city in the field of implementation of the Decree of the President of the Republic of Azerbaijan dated February 11, 2004 on the approval of the State Program for the socio-economic development of the regions of the Republic of Azerbaijan for 20042008. In the metallurgical industry, the works of reconstruction of 86 units operating in the Sumgait Aluminum production area have been started. In order for AzerBoru Yayma OJSC to start operating at the level of modern requirements, the 250-1 Station was completely renovated, 4 electric transformers were brought, and various machines were put into operation in the first and second pipe rolling workshops. During the years 2004-2008, project-estimate works were prepared for the construction and installation of a new MVT thermal power plant, 330 KV Darbend power transmission line, and construction of a new industrial town in Yeni Yashma settlement. The construction of the building for disabled people and families of martyrs has started. The construction and installation work of the disabled rehabilitation center have been completed and finishing works have started. Secondary school № 43 with 500 students was built and put into use on the territory of Sumgait Railway Station.

In the last five years, the indicators of the gross domestic product have been on increasing dynamics, according to the results of 2003, they reached 2341 billion manats, which means a 39 percent increase compared to the previous year, and a 74 percent increase compared to 1999, which was taken as the base year. Half of the gross domestic product was formed at the expense of the industrial sector (1164 billion manats), and H (964 billion manats) was the share of trade and service sectors. Over the years, the level of production has decreased several times. For example, in 1995, compared to 1990, the production level decreased by 77.3 percent, and in 2000, it decreased by 27.3 percent compared to 1995. There have been layoffs at companies, thousands of highly skilled people have left their jobs or been sent on self-imposed long-term leave.

Looking at the end of 2003, we witness that the city economy took a step forward on the path of stable development. By the end of the year, the production volume of the city's large industrial enterprises was 662.4 billion manats, which is 57 percent or 216.2 billion manats more than in 2002.

In 2004, 512.3 billion manats were invested in various areas of the city, which is 2.7 times more than the previous year. During the reporting year, foreign investment of 200 billion manats was invested, which mainly covered industrial enterprises. During the year, 203.1 billion manats were invested in industry, 37.5 billion manats in construction and installation industry, 8.8 billion manats in urban economy, 7.8 billion manats in production, trade and service sectors, 4.5 billion manats in education, healthcare and culture. The attraction of investments in all fields last year was higher than in 2003. Along with the achievements, there are a number of problems in the urban industry. AzerBoru Joint Stock Company cannot develop in the planned way as the intended investment was not implemented by a foreign company on time. Despite all efforts, Sumgait Compressors OJSC has not been able to launch the production of Compressors, which is its main profile, for a long time.

Today, the business environment in Sumgait, the cradle of entrepreneurship, is particularly favorable. This is related to the development of free entrepreneurship in the city and the formation of normal business relations with relevant institutions. For this, we express our gratitude to the City Executive Power, the City Municipality, the heads of relevant departments and organizations of Law Enforcement bodies, and the Sumgait community as a whole.

In the first quarter of 2005, large, medium and small industrial enterprises of the city produced products worth 246.3 billion manats, which is 23.5 percent and 16.1 billion manats more than last year. Compared to last year, the production of products in large, medium and small enterprises has increased by 10.7 percent at comparable wholesale prices. In the large, medium and small processing industry, 236.2 billion manat products were produced at actual wholesale prices. The volume of production increased by 22.7 percent or 169.2 billion manats compared to last year's report. At comparable prices, this increase in the production of chemicals in the chemical industry was 16 percent or 19.3 billion. manat, 47.2 percent or 26.2 billion manat in non-ferrous metal production. 8.6 times or 272.8 million manats in AzerBoru OJSC, 4.2 times or 502.3 million manat in the textile industry, 64.7 percent or 225.1 mln manat in the production of firewood and wood, 57.2 percent or 473.7 million manats in construction materials production.

For 6 months of 2005, 1,064 apartments with a total area of 62,476 square meters, including 41,347 square meters of living space, were privatized. From the beginning of the privatization of apartments until July 1 (2005), 33324 apartments with a total area of 1652242 square meters were privatized, which means 63.3% of the city's housing fund. If we look at the facts, we will see that this indicator is 2% more than the indicator of the whole republic.

In the first half of 2005, the volume of production in the large, medium and small state sector of Sumgait industry was 433 billion manats, and the volume of production in the non-state sector was 42.3 billion manats. Compared to last year, the state sector increased by 19.3 percent, and the volume of production in the non-state sector increased by 4.0 percent. The special weight of the state sector in industrial production was 91.1 percent, and the non-state sector was 8.9 percent. 27 large, medium and small joint-stock companies have been operating in the city industry. They produced industrial products worth 154.8 billion manats and 32.6 percent of the total output. Compared to last year, the activity of joint stock companies increased by 5.4 percent. 95.4 percent of the manufactured industrial product was in the processing industry, 4.6 percent in the electricity, gas, and water supply.

As a result of the measures implemented in Sumgait, compared to 1995, the volume of industrial production increased by 25%, and the average monthly salary increased by 5.4 times. The volume of investments aimed at major repairs in the city has increased 17 times. According to the results of last year, the volume of industrial production in the city has reached 1 trillion manats. And this high development rate is maintained this year. Over the past two and a half years, 15,000 new jobs have been opened in Sumgait.

The main part of the total product and service output was produced in the industrial sector. The total volume of the product was 994.7 billion manats or the increase compared to 2004 was 71 billion manats or 7.7%. The volume of product production increased by 7.7% in processing industry enterprises, 1.9% in metallurgical enterprises, 2.2 times in light industry enterprises and 38.8% in construction materials enterprises [1].

12,200 people worked in the city's industrial enterprises, the average monthly salary of the employees was 550,000 manats and increased by 21.4% compared to 2004. Debts of workers in industrial enterprises for wages and equivalent payments decreased by 1.3 billion manat compared to the beginning of the year. Compared to the beginning of 2005, debts due to natural gas in industry were reduced by 2.6 billion manats, debts due to water by 0.6 billion manats, and debts due to communication by 2 billion manats.

The launched Bismak enterprise allows to meet the demand for flour products of the city and surrounding regions. The works of construction and installation of equipment have been completed in the Elitar company, which will produce confectionery products, which is expected to be put into operation in the near future. At the same time, the construction and installation work of Azeristar LLC's production of solvents, paints and resins, and concrete materials processing of Azer Tikinti Servis LLC have been completed. Also, the construction works on the manual carpet weaving enterprise of Azerkhali LLC, the production of doors and windows from plastic and aluminum materials and other products of Lacuman company have been fully completed, and the enterprise has started to operate.

In 2005, Sumgait produced 1,936.0 billion manat products in the main sectors of the economy, which is 26.1% more than the previous year. The main part (51.6%) of the output of the general product and services was in the industrial sector, the total volume of the industrial product increased by 7.8% compared to 2004 [2].

In 2005, the industrial sector produced 1 trillion manats or 55 percent of the total output volume, agriculture produced 2.6 billion manats (0.1%), construction produced 86.8 billion manats (5%), and transport produced 25.8 billion manats (1.5%), there was a product release of 13.5 billion manats (0.3%) in communications, 198.3 billion manats (10.9%) in wholesale and retail trade, social and other services, and 494 billion manats in all directions (27.1%) investments were made... Product production in industry increased by 7.8% compared to 2004, including 7.8% in the processing sector, 1.2% in metallurgy, 2.2 times in light industry, by 38% in the construction materials production sector. 63.8% of the industrial output is accounted for by the non-state sector.

The issue of the rapid development of Sumgait has been resolved in the State program approved by the President of the Republic of Azerbaijan Ilham Aliyev in 2004-2008 on the socioeconomic development of the regions of Azerbaijan. In 2004-2006, a lot of work was done in this direction. The construction of a 506 MW power plant has started in Sumgait. Taking into account that aluminum production in Sumgait will be doubled in the future, electric furnaces will be built instead of marten furnaces in the huge pipe rolling plant, and new production areas built on the basis of modern technologies will be put into operation, it is impossible to explain how important this power plant, which is expected to be put into operation next year (2007), is for Sumgait.

One of the important problems waiting to be solved in Sumgait for a long time is the replacement of the city's electric power complex with a new one. Within the framework of the Socio-Economic Development Program of the Regions, the construction of a new 517 MW power plant, which will affect the development of all areas of the city, and at the same time will have an ecologically superior technology, which the President of the Republic of Azerbaijan Mr. Ilham Aliyev participated in the groundbreaking ceremony in August 2005 and during his visit to the city of Sumgait continues according to the planned schedule.

One of the important problems waiting to be solved in Sumgait for a long time is the replacement of the city's electric power complex with a new one. In August 2005, the President of the Republic of Azerbaijan Mr. Ilham Aliyev participated in the groundbreaking ceremony within the framework of the Socio-Economic Development Program of the Regions and during his visit to Sumgait, the construction of a new 517 MW power plant, which will affect the development of all areas of the city, and at the same time has superior technology from an environmental point of view, is continuing according to the planned schedule.

In the past period, the industrial enterprises of the city produced products in the amount of 123.2 million manats. This is 26.4% more than the corresponding period of last year. The increase in the production of industrial products was mainly due to the chemical and metallurgical industries. A number of enterprises, including Syntek Rubber Plant, Household Chemicals, Additives, Sumgait Compressors, OJSC and light and food industry enterprises, worked below their capacity. As the implementation of the measures envisaged for the city of Sumgait in the State program of socioeconomic development of the regions of the Republic of Azerbaijan, in connection with the analysis, reconstruction and development of the current state of industrial enterprises, a conference on the role of Sumgait enterprises in creating strong industrial potential was held in April with the participation of the heads of the Ministry of Industry and Energy of the Republic of Azerbaijan and a number of other state structures, and projects covering all areas of industry were discussed.

In the large, medium and small industrial enterprises of the city, products worth 186,423.3 thousand manats were produced at actual wholesale prices. The volume of production increased by 23% compared to last year... 175743.6 million manat products were produced at actual wholesale prices. The volume of production has increased by 22% compared to the reporting period of last year at comparable prices... The average number of employees working in large and medium-sized industrial enterprises was 12.4 thousand people. The average monthly salary calculated for each employee was 152.3 manats. The number of employees working in state and non-state enterprises was 1030 and increased by 11.5% compared to last year. The average monthly salary was 60.8 manats and increased by 25.9% compared to the corresponding period of last year.

In recent years, important works have been carried out in Sumgait on the restoration and development of the petrochemical industry based on modern technology. Construction and installation works have started in the first and second buildings of the Sumgait aluminum production area. There has been a turning point in the activity of AzeriBoru OJSC, since the beginning of this year (2006), more than 10,000 tons of metal pipes have been produced. At Sumgait Compressors OJSC, the production of spare parts for high-pressure compressors used in the industry has started, and at Superphosphate OJSC, a number of repair and reconstruction works have been carried out due to internal capabilities. Reconstruction works and the construction of a new power plant with a capacity of 517 MW are being continued at Khovlu iplik OJSC.

In the decree of the head of the Sumgait City Executive Authority on the tasks arising from the decree of the President of the Republic of Azerbaijan dated August 30, 2007 “On the strengthening of state control in the field of construction in the Republic of Azerbaijan”, is noted that failure to carry out engineering search works at the required level when allocating land plots for construction, implementation of construction works in the safety lanes of existing communication lines, improper preparation of project documents, use of low-quality, non-standard materials in construction, cases of gross violations of construction norms and rules require further strengthening of state protest in this regard, so the President of the Republic of Azerbaijan has prepared a decree “On Strengthening State Control in the Field of Construction in the Republic of Azerbaijan” and issued a number of mandatory tasks... Made a decision in order to ensure the implementation of the duties arising from the decree of the President of the Republic of Azerbaijan “On strengthening state control in the field of construction in the Republic of Azerbaijan”.

In the report of the head of the City Executive Power, Vagif Alyeiv, on the results of the socioeconomic development of Sumgait city during the 9 months of 2007 and the upcoming tasks, it is noted that in the 9 months of the current year, products worth 340 million manats were produced and services provided in the city [3]. This is 25% more than the same period last year. In general, since 2003, this indicator has exceeded 1.2 billion manats. In the industrial enterprises of the city, products of 210 million manats or 10% more than in the same period of 2006 were produced... Compared to the same period of last year, the volume of production in the area of aluminum production, which is one of the main enterprises of the industrial potential of the city, increased by 17.6%, 2.6 times in AzerBoru OJSC. Reconstruction works have been continued at Khovlu Iplik and Sumgait Trikotaj OJSC, one of the city's light industrial enterprises.

In January-September (2007), large, medium and small industrial enterprises of the city produced products worth 165,811.1 thousand manats at wholesale prices. This was 10.8% more than last year (in comparative terms). The weight of the non-oil sector in the production of industrial products has increased and reached 51.9%. Product production in the non-oil sector increased by 24.5% compared to the corresponding period of last year. The specific weight of the oil sector was 48.1%. In the reporting period of the current year, 27 large, medium, and small industrial joint-stock companies operated in the city industry, and their total output amounted to 73,723.7 thousand manats and 44.5%. Compared to the reporting period of last year, the activities of joint stock companies increased by 30.9%. 85.3% of the produced industrial products belong to the processing industry, and the remaining 14.7% to the electricity, gas, and water supply.

In the city, the main indicator of the economy, the volume of production and the wages of employees have increased more than 2 times. More than 40 large and medium-sized enterprises, hundreds of small production and service areas have been built and put into operation in the city [4]. More than 1.2 billion manats have been invested in all financial sources for the development of economic and social areas of the city. During the implementation of the state program, the construction of more than 30 high-rise residential buildings was started in the city, and more than 50% of them were completed.

During 2007, the dynamic pace of development achieved in the socio-economic areas of the city was successfully continued. In the reporting year, products worth 457 million manats were produced and services provided in the city. This is 30% more than the previous year. In general, since 2003, this indicator has exceeded 1.5 billion manats. In the industrial enterprises of the city, 267.5 million manats or 8% more than in 2006 were produced. The number of employees working in industrial enterprises increased during 2007 and exceeded 16 thousand people. The average monthly salary of employees has reached the limit of 185 manats, which is 25% more than the indicators of 2006. During the year, high wages were observed in industrial enterprises, banking and financial activities, construction and energy service sector. In 2007, more than 350 million manats were invested for the development of socio-economic areas of the city. This is 10% more than the previous year. In general, during the last 4 years, more than 1.2 billion manats have been invested for the development of the socio-economic areas of Sumgait city at the expense of all financial sources.

At the beginning of 2007, despite the large-scale increase in the production volume of a number of industrial enterprises, the production volume of the city's chemical and petrochemical production plants decreased by 16.4% compared to the previous year.

In general, during these years, products worth 1 billion 600 million manats were released and services were provided in Sumgait city. The volume of the non-state sector increased by 1.5 times and exceeded 70% of the total output. The volume of product production in industry, which is in the main areas of the economy, increased by 2.3 times and reached 1 billion 100 million manats in total. During the years 2003-2007, more than 1 billion 250 million manats were invested for the development of the socio-economic areas of Sumgait from all financial sources.

In 9 months of 2008, the main indicator of the city's economy, the volume of gross output was 410 million manats, compared to the corresponding period of the previous year, the increase was 20.5%. The share of the non-state sector in the total output reached 70%, the output per capita increased by 20% and became 1370 manats. In general, the output of products and the volume of services provided in the city increased by more than 3 times during the last 5 years and exceeded 1 billion 900 thousand manats [5].

In the 9th month of 2008, the city's industrial enterprises produced 250 million manats or 52% more than the corresponding period of the previous year. During the last 5 years, the production of products by the industrial enterprises operating in the city of Sumgait increased more than 2 times and amounted to 1 billion 300 thousand manats.

In the last five years, the volume of investments made in the development of separate areas of the city at the expense of all financial sources amounted to 1 billion 355 million manats. In 2008, the volume of capital investment in the city was 250 million manats, the main part of which was directed to the reconstruction and development of industrial areas, and a part was directed to the implementation of social measures... Over the past five years, more than 50 new large and medium production enterprises, more than 100 large service and more than 100 small production and service areas have been built and put into use... More than 1800 enterprises and more than 10 thousand individuals are currently operating in Sumgait. Bank branches have an exceptional role in financing projects aimed at the development of entrepreneurship in the city.

A lot of work has been done in Sumgait city in the field of implementation of the State Program for socio-economic development of the regions of the Republic of Azerbaijan. In order to achieve economic development in Sumgait, special importance was given to the application of investment. During the mentioned period, the volume of the general product release, which is the main indicator of the economy, in large, medium and small industrial enterprises of the city increased. The dynamic pace of development achieved in the work of socio-economic areas in Sumgait was successfully continued, attention and care were given to the development of free entrepreneurship.

References

1. Samedov, F. (2022). Foreign Economic Relations of Sumgait City (On the Chemical Industry. 1991-2003). Bulletin of Science and Practice, 5(8), 416-423.

2. Imrani Z.T., Mammadova S.I., Hadjiyeva N.N., Vysotskyi O.Y. (2021). The main directions of sustainable socio-economic development of the Caspian littoral areas of the Republic of Azerbaijan and the existing environmental problems. Journal of Geology, Geography and Geoecology, 30(4), 652-665.

3. Jager P. (2020). Arrival at the Caspian Coast: Migration, Informality and Urban Transformation in Sumqayit, Azerbaijan. Acta Via Serica, 5(2), 51-90.

4. Aliyev, S. (2023). Strategic aspects of the development of the Fuzuli city in the revitalization of the Karabakh economic region. Scientific Collection “InterConf+ ”, (37 (171)), 2532.

5. Aliyev S. (2014). Economics of Azerbaijan: upgrading and implementation of effective instruments. Life Science Journal, 11(5s).

economic sumgait investor allowance

Список литературы

1. Samedov F. Foreign Economic Relations of Sumgait City (On the Chemical Industry. 1991 - 2003) // Бюллетень науки и практики. 2022. Т 8. №8. С. 416-423.

2. Imrani Z.T., Mammadova S.I., Hadjiyeva N.N., Vysotskyi O.Y. The main directions of sustainable socio-economic development of the Caspian littoral areas of the Republic of Azerbaijan and the existing environmental problems // Journal of Geology, Geography and Geoecology. 2021. V 30. №4. P. 652-665.

3. Jager P. Arrival at the Caspian Coast: Migration, Informality and Urban Transformation in Sumqayit, Azerbaijan // Acta Via Serica. 2020. V 5. №2. P. 51-90.

4. Aliyev S. Strategic aspects of the development of the Fuzuli city in the revitalization of the Karabakh economic region // Scientific Collection “InterConf+”. 2023. №37 (171). P. 25-32.

5. Aliyev S. Economics of Azerbaijan: upgrading and implementation of effective instruments // Life Science Journal. 2014. V. 11. №5s.

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