What could Azerbaijan gain from expanding cooperation with ECO members?
Analysis by Caliber.Az

ANALYTICS  25 January 2023 - 15:01

One of the strategic directions of Azerbaijan’s economic policy marks the integration with Turkic and other friendly Muslim states of the region for the joint implementation of transport and agricultural projects, the attraction of investments into industries, “green” energy, tourism and environmental projects. The Economic Cooperation Organization (ECO), of which our country has been a full member for more than 30 years, is the most important instrument for such endeavours.

The 26th meeting of the Council of Ministers of Foreign Affairs of ECO, where our country was represented by Foreign Minister Jeyhun Bayramov, was recently held in Tashkent. Within the framework of the meeting, the chairmanship of ECO was officially passed to Azerbaijan.

ECO was one of the first international structures that Azerbaijan joined after having regained its independence. This intergovernmental structure was established by Türkiye, Iran and Pakistan in far 1985 to strengthen economic, technical and cultural cooperation. Since 1992, the format of the organization has expanded significantly with the accession of seven more countries, namely Azerbaijan, Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, Turkmenistan and Afghanistan, where more than 500 million people live today.

Since then, the authority and level of the international representation of ECO have increased also significantly. Since 1995, the structure has been granted observer status in the United Nations and has subsequently found a similar position in the Organization of Islamic Cooperation (OIC). The cooperation of the ECO member states is mostly focusing on an economic agenda, but in recent years the organization has addressed a wide range of regional issues, including humanitarian and political as well as defence-related cooperation.

The 26th meeting of the Council of the ECO Council, which was attended by the ministers of foreign affairs from the member countries, as well as the Secretary General of the organization, Khusrav Noziri, was held on 24 January in the capital of Uzbekistan. During the event, the issues of increasing the effectiveness of interaction of the member-states of the structure in the field of economy, transport and logistics projects, ecology, tourism and others have been discussed. An exchange of views occurred on the development of regional cooperation within the framework of ECO and enhancing its authority in the world arena. As a result of the meeting, the council adopted the Tashkent communiqué and a number of ECO reports and bilateral documents were signed.

The most important issues on the agenda of the meeting were to some extent related to Azerbaijan: in particular, the Tashkent communiqué expressed support for the settlement of Azerbaijan-Armenian bilateral relations on the basis of mutual recognition and respect for territorial integrity and sovereignty. In the resulting document, ECO also welcomed steps aimed at establishing transport and communication links between the East Zangezur Economic Region and the Nakhchivan Autonomous Republic of Azerbaijan in accordance with the trilateral statement from November 10, 2020.

The communiqué also addressed issues related to the implementation of transport, trade, investment, energy and other projects implemented by Azerbaijan with Türkiye, as well as with Uzbekistan and Kazakhstan within the framework of bilateral and multilateral platforms.

It is noteworthy, that Azerbaijan will be represented in the ECO in a new capacity in 2023 - since January, our country has been chairing the organization, and the first meeting of the council of permanent representatives under the presidency of Azerbaijan was held in Tehran on January 11, 2023.

During the second meeting in the new year, held in Tashkent, Foreign Minister Jeyhun Bayramov noted that within the framework of the Azerbaijani chairmanship of the organization, measures will be taken to launch the activities of the “Clean Energy Centre of ECO”, the United Nations Industrial Development Organization (UNIDO) as well as the “Economic Research Center of ECO” to be established in Baku.

The foreign minister of Azerbaijan also informed his colleagues on the activities of our republic in the post-conflict period: large-scale and capital-intensive reconstruction works carried out by Azerbaijan in the territories liberated from occupation, including measures to be established in the Karabakh region’s “green energy zone”, industrial, agricultural and other clusters.

Taking into account the prospects of the participation of our country’s partners and allies in contractual and investment projects in the Karabakh region, this area is of close interest to a number of ECO States. Türkiye is the leader here, with its companies involved in most road constructions, the formation of agricultural and industrial clusters, the creation of housing and social facilities in villages and cities, the laying of public utilities and the development of renewable energy sources in the region. Hundreds of companies from Kazakhstan, Pakistan and Uzbekistan are also planning to participate in the revival of Karabakh, and such undertakings are already considered in the relevant structures of the economic department of our country.

The recreational sector is another of the most important areas of cooperation among ECO countries: the member countries of the organization plan to pay more attention in the near future to the development of pilgrimages and ecological and ethnocultural tourist routes, which will contribute to the discovery of more intangible heritages of the vast Eurasian region.

It is planned to jointly develop tourism products, expand the geography of air transport between the ECO countries, develop recreational infrastructure, including in the liberated territories of Azerbaijan. The need to further strengthen the partnership in the field of tourism was pointed out in the speech of Jeyhun Bayramov, who announced that the city of Shusha will be nominated for the title of the tourist capital of the ECO in 2026.

During the meeting in Tashkent, the prospects of realization of other basic undertakings as announced in the framework of the previous “road maps” of ECO were touched upon, aimed at the expansion of transport and logistics cooperation, bridging the gap in supply chains and the development of agrarian cooperation. The agreed-upon efforts of ECO members aimed at the orderly expansion of transport communications and trade in the region are particularly relevant in light of the fact that these countries are the largest trading partners of Azerbaijan, providing, among other things, significant fiscal revenues to the state budget.

Thus, for the first ten months last year, the trade between Azerbaijan and Türkiye increased by 45%, reaching $5 billion, and according to preliminary estimates, this amount came close to $6 billion at the end of the year. Azerbaijan-Kazakhstan trade in January-November 2022 reached $549.8 million, which is an almost fourfold increase. Trade with Turkmenistan also showed a similar dynamic: in just three quarters of last year there was a 6.2-fold increase of about $305.5 million. The third most important trade partner of our country in the Central Asian region is Uzbekistan, with which trade increased by 36.5% and reached $162.2 million in January-November last year.

Moreover, in the current and subsequent years, trade, investment and transport cooperation between the above-mentioned partners of Azerbaijan and other ECO countries will be increasing - both because of the increase in energy supplies to Europe, as well as due to the expansion of the transit of non-oil products. Numerous transport and logistics projects within ECO, the Organization of Turkic States and other international organizations are supported by Türkiye, the European Union and China.

In particular, Kazakhstan, Azerbaijan, Georgia and Türkiye, together with EU partners, plan to invest in the infrastructure of the Trans-Caspian International Transport Route (TITR) several billion dollars, expecting to increase the capacity of the “Middle Corridor” to up to 10 million tons of cargo by 2025. ECO countries also plan to sign a comprehensive trade agreement soon, which will significantly simplify cross-border procedures, reduce customs payments and harmonize tariffs for trans-shipment.

Caliber.Az