DEVELOPMENT CONCEPT “AZERBAIJAN - 2020: OUTLOOK FOR THE FUTURE” Project competition. Along with that, ensuring a sustainable high pace of growth in economic and social spheres requires the appropriate establishment of state regulation in market relations and the improvement of this regulation considering the latest tendencies and spheres in the world economy. At the time of the end of the transitional period and formation of mature market relations in Azerbaijan, state regulatory and administrative functions will be carried out in order to maintain macroeconomic stability, improve the business environment in the country, ensure free competition, create favourable conditions for local and foreign investments, implement regulatory measures to improve the structure of the economy, implement investment and large-scale infrastructure projects and effectively organize the social protection of the population. The coordination of the macroeconomic policy will strengthen, an optimal macroeconomic framework will take shape in terms of financial sustainability and an appropriate monetary policy will be conducted. The first stage of this policy will include the target of inflation, other macroeconomic targets and appropriate regulatory tools and the second stage – targets of stability in the financial sector, activity in the sector and tools that will manage risks. In line with the target of inflation, special attention will be paid to meeting the economy’s demand for money and the institutional basis of monetary management will improve. Special attention will be paid to the establishment of fiscal discipline in the sphere of forming and using budget resources, correct distribution of funds and increasing the efficiency of expenses. Quick assessments of various budget risks (foreign, financial, operational risks, etc.) will be carried out. In order to increase the competitiveness of the economic system even further, the passive taxation policy will gradually transform into an active taxation policy, while the measures to be carried out to improve tax rates will help create a favourable environment for business activity. The mechanism of using oil and gas reserves will improve. A strategy will be implemented to gradually replace the revenues from the sale of hydrocarbon reserves with revenues gained from investing those funds, and work in this sphere will intensify. A more flexible currency policy will be conducted as a separate important requirement of improving the country’s solvency and orienting the economy towards export, and the surplus in the net international investment rate will be maintained. Measures to improve the business environment, the legislation and policy on competitiveness will continue and mechanisms of protecting investors’ rights will be 12