Impact of Small and Medium Enterprise-oriented Reforms in Azerbaijan on their Economic Performance

Abstract

One of the main economic factors supporting the economies of the modern world is small and medium enterprises (SMEs), and in recent years the Azerbaijani government, which aims to minimize dependence on oil, is implementing reforms to support SME sector. The Small and Medium Business Development Agency of the Republic of Azerbaijan, established in 2017, is a clear example of this approach. The purpose of this article is to conduct a descriptive analysis of the impact of SME-supporting economic reforms on the economic performance of SMEs. The article analyzes the changes and trends in the macroeconomic indicators of SMEs in 2006-2019 based on the data of the State Statistics Committee of the Republic of Azerbaijan, and examines the impact of SME reforms on SMEs, especially after 2016. The figures suggest that the reforms have positive effects and there are growing trends in terms of both value added and employment created by SMEs. Despite these positive results, the share of SMEs in the GDP and in employment of Azerbaijan is still low compared to developed countries.