Caspian Energy Journal Caspian European Club
Thursday, 13 September 2018 12:00

Our only wish would be an acceleration in the reforms, Murat Karakas Featured

 Caspian Energy (CE): What are the factors stimulating the development of KPMG activity in the Azerbaijani market and what are the obstacles it faces?

Murat Karakas, Managing Partner of “KPMG AZERBAIJAN LIMITED”: Azerbaijan is an emerging market that is transforming its economy rapidly through a series of reform support actions. During this process, very important institutions that are already established in the developed economies are getting more significance. Audit is one of the most important of those institutions, as it creates trust and value in the markets, support ensuring financial stability and sustainability and contributes to capital attraction. I am very pleased to see that many local businesses are focusing on the corporate governance. The good corporate governance, among other things, requires a valuable independent audit.  Of course, there are also organizations and individuals with old habits who are resisting the change, and value short term profits more than the sustainable growth. I am convinced that this type of management will get less and less relevant by time.

CE: How do state reforms affect your financial turnover? What would you like to change?

Murat Karakas: As mentioned above, state reforms are helping us because a healthy and sustainable economy requires many services that we are providing. Audit is one of our key functions, but we are also very good in tax and legal advisory, and management consultancy, including valuation and deal advisory. These are all services that are on high demand in healthy and robust economies, which supports also introduction of best practices and innovations. We are very happy that reforms are leading us to that direction. Our only wish would be an acceleration in the reforms, as many countries are working on such improvements in their own economies. There is a very big competition on attracting the global financial capital, so we need to find the balance between speed and sustainability.

CE: How does the current legislation of Azerbaijan promote the development of private business sector in Azerbaijan and how does it stimulate its activity in the global market?

Murat Karakas: I think we can all see the positive impact of the current reforms, and the opportunities in making those even better.  Strategic road maps that the government approved identifies main strategic directions in almost all key sectors over mid run. Core part of these reform support agenda, as identified in strategic road maps, decreasing the dependence on the oil sector and support sustainable growth and development in non-oil sector to ensure economic sustainability through private sector development. In that regard, recent reforms is expected to pave the way towards development of SME sector as well as large business development in real sector of economy. Moreover, there are positive trends recently observed in agriculture sector as well. Albeit this sector employs almost 40 percent of total population, however value added generated by agriculture sector is still low –around 5 percent of GDP. We strongly believe that strategic, institutional, operational reform support agenda introduced in this area will soon create solid base for development of agriculture sector, support import substitution, and stimulate agriculture export.     

CE: Which countries, in your opinion, currently have the most attractive business markets in your field of activity?

Murat Karakas: People tend to believe the developed economies, like US, UK, EU are very attractive, and there are reasons on that, clear rules, sustainability, ease in doing business, steady cash flows, etc. However, the growth does not come from such markets. Growth comes from emerging markets that can transform their economies, and the rules of doing business successfully. Globally, we see the growth in the markets that our clients experience themselves, like China, India. We believe, the CIS countries and Africa are the next big thing in our sphere.

CE: What are the most significant events that happened in your company in 2017-2018?

Murat Karakas: I think the most significant achievement we had is fully localizing our Audit department. Over the years, we have been bringing expats from different countries to develop our people and introduce the global experience to out staff. These investments paid off very well, and now I am very proud of saying that from our Head of Audit to a new assistant, everyone in the Audit department are Azerbaijan nationals. This also shows the reforms that the country is taking on so that we can find good talent that are willing to work in Audit. Actually now we have started to send our people out to other KPMG offices in Europe. One of our senior managers just came back from our London office. I am very open to the idea for sending more people for international rotation so that they can bring their knowledge and experience back here. I think this is great for KPMG but more importantly, it brings value to Azerbaijan.

CE: What trends will determine the impact on the audit and consulting sector in 2018 and in the next two to three years? What is the secret of an auditor?

Murat Karakas: The key factor is the development of the country through reforms, and attracting more direct foreign investment. This is like having a critical mass, when the multinationals will come the economy will be much more vibrant and agile. In a way it will help our local businessmen to get ready for more international competition, will make them stronger, and they can start considering going for the international markets ultimately. The biggest beneficiary of this process will be people because through competition they will have access to better goods and services. In addition, this will increase their chances to work in better jobs. Our sector of audit and consulting will flourish as well, as we will help more international companies to adapt the local business environment, while we will work with local businesses to adapt to the international competition and investing in other markets. State will definitely be happy as they will get more taxes and will see less unemployment. For all this happen, reforms should continue and authorities should monitor the process vigilantly.


Thank you for the interview

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