EU-Azerbaijan Business Forum participants hear about the links between the rule of law, trade and investment
On May 17, 2022, the EU-Azerbaijan Business Forum took place in Baku. The annual event drew a high turnout of over 500 participants, including Government officials, EU Ambassadors, representatives of international organizations and business leaders from EU countries and Azerbaijan, who took part in panel discussions and business-to-business meetings. Keynote speeches were delivered by Mr. Mikayil Jabbarov, Minister of Economy of the Republic of Azerbaijan, and H.E. Mr. Peter Michalko, Ambassador of the European Union to the Republic of Azerbaijan.
The 6th annual edition of “The EU Business Climate Report Azerbaijan” was presented during the Forum. Commenting on information presented in and findings of the Report, the team leader of the EU-funded Trade Policy Project, Mr. Bordalba, stated that:
“During the accession process [to the WTO], countries shall ensure that WTO provisions are adequately incorporated into their domestic regulatory frameworks and that those provisions are effectively applied by their institutions in their daily activities. For this reason, WTO accession directly contributes to affirming and strengthening the rule of law in accession countries. This is one of the most fundamental benefits awaiting countries in accession.”
Multiple examples demonstrate that by guaranteeing the full rule of law, a country is better placed and is more likely to have sustainable economic growth and attract foreign direct investment. This is a key message from trade policy reviews regularly conducted in the WTO.
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Example 1 – Statement of the Korean Representative during the Trade Policy Review of Myanmar: "The[] reform efforts [of Myanmar] reinforce the rule of law – a critical pillar of sustained development. Indeed, the quadrupling of FDI inflows in Myanmar is emblematic of the growing rule of law and market economy, both of which are important considerations for foreign investors. … We believe that, now more than ever, the rule of law and market economy principles should continue to be upheld. Doing so will ensure that foreign investment continues to flow into Myanmar and help fuel its development.” Source: Trade Policy Review – Minutes of the Meeting available here |
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Example 2 – Statement of the Singaporean Representative during the Trade Policy Review of the Lao PDR: Singapore “welcomes Lao PDR's efforts to improve its investment regime, including through constitutional amendments to enhance transparency and enforcement of the rule of law, which has strengthened investors' confidence in the market.” As a result of these changes, Singapore’s foreign direct investment in the Lao PDR had increased considerably following Lao’s accession to the WTO. Source: Trade Policy Review – Minutes of the Meeting available here |
Conversely, trade policy reviews show that, when there are setbacks in implementing the rule of law, economic development and foreign direct investment suffer.
Taking into consideration the findings above, Mr Bordalba stated:
“trade, investment and ultimately economic development go hand-in-hand. For this reason, an economic agenda which comprises active, resolute and coordinated steps in all those areas, supported at the highest political level, is the first-best policy option and is likely to deliver lasting, positive economic and developmental results to Azerbaijan.”
Related materials:
- Leaflet “Rule of Law, WTO Principles, Economic Development and Attraction of Foreign Direct Investment” (in English: click here, in Azerbaijani: click here)
- EU Business Climate Report – Azerbaijan 2021 is available here: https://www.eeas.europa.eu/sites/default/files/documents/BU_Report_Azerbaijan_FINAL_EN.pdf
- Summary of the EU-Azerbaijan Business Forum 2022: https://www.facebook.com/euazbusinessforum/videos/381449467341335/
