Study of Small and Medium Enterprises in Azerbaijan - IFC

Chart 5.9
40%
Average percentage
of entrepreneurs
30%
and SME who
resorted to
unofficial payments
20%
while obtaining
permits as a
10%
percentage of firms
receiving permits 0%
29%
Individual entrepreneurs
38%
SMEs
5.7 Recommendations
5.7.1 Reduce permits number and coverage
This can be implemented in the following way:
As a first step, the government should undertake an inventory of all permits currently
issued in Azerbaijan. Next, an inter-ministerial working group (including private sector
representatives) should be set up to review the existing permits through the “guillotine”
approach or an alternative deregulation mechanism. The “guillotine” approach can be
used to reduce outdated and redundant permits with a single piece of legislation and
under a limited time period (see Box 5.5). Chart 5.10 illustrates the steps to be taken
within the “guillotine” approach as well as criteria for reducing permits:
Chart 5.10 Guillotine process map
Process
The Cabinet of Ministers requests all
regulators to submit complete list of all
permits they issue
Interministerial working group, including
private sector representatives, reviews
lists provided
The recommendations of the permits
review become legally binding
Sample review criteria
§ § § § §§
§
§ § § §
Output
Initial list of all permits issued in
Azerbaijan
Comprehensive review of permits
on list against objective criteria;
corresponding reduction of
permits not in line with criteria
• Only permits on the list
continue to exist
• Process repeated for all new
permits
1. Outdated;
2. Contradicting to general market conditions;
3. Issued for revenue generation;
4. Issued for non-hazardous business activity;
5. Duplicate other administrative procedures;
6. Used as source of information when the
information can be received from third parties.
Aze r b a i j a n Bu s i n e s s En a b l i n g En v i r o n m e n t Pr o j e c t 83