Azerbaijan-EAEU: Partnership shaping the future
ANALYTICS 26 May 2023 - 17:12
Despite growing risks due to the possible strengthening of the global recession and the slowdown of the global economy, Azerbaijan and the member countries of the Eurasian Economic Union (EAEU) continue to increase mutual trade, develop transport and logistics cooperation, and consistently diversify economic ties. The prospects of these trends were once again confirmed during the visit of Azerbaijani President Ilham Aliyev to Moscow the day before, where he attended the summit of the EAEU member states as a guest.
Over the past three decades, Azerbaijan has been systematically developing trade and economic relations with the EAEU countries, strengthening and enhancing cooperation based on a solid legal framework, which already includes many hundreds of interstate and intergovernmental agreements. This solid economic foundation, along with trade ties, is based on boosting investment partnerships and the establishment of joint ventures, mostly in the non-oil sector.
The only exception to this has been Armenia, due to its destructive foreign policy of territorial claims against Azerbaijan and other neighbours, and to the unwillingness of the leadership in Yerevan to abandon its aggressive, invasive plans. "However, there are now serious preconditions for the normalisation of relations between Azerbaijan and Armenia on the basis of mutual recognition of territorial integrity and sovereignty," Azerbaijani President Ilham Aliyev said, speaking at an enlarged meeting of the Supreme Eurasian Economic Council in Moscow.
Despite Armenia's non-involvement in trade, transport, and any other business undertakings, which in the post-Soviet space were often initiated by our country, Azerbaijan has consistently and successfully expanded cooperation with the other EAEU members. In particular, over the entire period of EAEU activity, there has been a year-on-year increase in Azerbaijan's business ties with its key partners - Russia, Kazakhstan, and Belarus. In recent years mutually beneficial trade with Kyrgyzstan and Tajikistan has been established. The fact that Azerbaijan is the main trade partner of Russia and other EAEU countries in the region and in recent years it has accounted for about 40-50% of the total trade turnover with all other South Caucasus countries testifies to the success of these ties. Russia, in turn, has for many years firmly held the first place among CIS and EAEU countries as an importer of Azerbaijani agricultural and other non-oil products.
"Azerbaijan's trade turnover with EAEU countries last year grew by 31% and exceeded $4.7 billion, and in January-April of this year, the mutual trade increased by another 38%. Last year, the share of member countries of the Eurasian Economic Union in Azerbaijan's foreign trade turnover totaled about 9%, and we see great potential for further growth of mutual trade turnover," President Ilham Aliyev said speaking at an enlarged meeting of the Supreme Eurasian Economic Council in Moscow.
Azerbaijan's leader, who was a guest at the event, thanked Russian President Vladimir Putin for the invitation to attend the summit, stressing that cooperation with the EAEU member states has been successfully developing for 30 years and there are strong preconditions for further expansion and deepening of mutually beneficial business and interstate relations.
"We see great potential for further growth of trade turnover: Azerbaijan is located at the geographical crossroads of East-West and North-South transport routes, and the transport and logistics infrastructure of our country allows to transport goods in any direction," President Ilham Aliyev said, adding the country has a port and extensive railway infrastructure.
Today's successes in Azerbaijan's transport sector are based on multi-billion investments in the construction of highways, seaports and airports, radical modernisation of railways and rolling stock, procurement of cargo ships, locomotives, aircraft, etc.
"Today there are eight international airports in Azerbaijan, two of which - in Fuzuli and Zangilan, have been built in the last two years on lands freed from occupation. The ninth international airport is under construction in liberated Lachin and will be commissioned in 2025", Aliyev said. The head of state underlined that Azerbaijan has one of the largest air cargo fleets in the region - with a cargo turnover of more than 500,000 tons per year.
At the same time, as the President noted, "a modern shipyard has been operating in Baku for several years, which can build any type of vessels".
"I am glad to say that today the shipbuilding capabilities of Azerbaijan are available to our partners in the region and negotiations and active work on placing orders of our Caspian neighbours at the shipyard in Baku are already underway".
Ilham Aliyev also stressed that Azerbaijan has the largest merchant fleet with more than 50 ships in the Caspian Sea.
At the same time, the Azerbaijani leader noted in his speech that the leading Caspian Sea harbour - Baku International Sea Trade Port (BISTP) located in the settlement of Alat, designed to transport 15 million tons of cargo per year, will soon be upgraded and the volume of cargo handled in the port will be increased to 25 million tons.
The Baku-Tbilisi-Kars (BTK) railway, which provides access to Europe as well as to the Mediterranean ports of Türkiye, also plays a significant role in these plans. Therefore, the government of the republic is starting to finance the expansion of the BTK infrastructure - the throughput capacity of this steel line will be raised to 5 million tons of cargo per year. "This is particularly important given the fact that a large increase in cargo transportation through Azerbaijan has been observed recently," President Ilham Aliyev stressed.
Azerbaijan's achievements in transport and logistics are crucial for expanding trade and economic cooperation with the EAEU countries, which account for a considerable part of freight traffic and transit cargo transported through Azerbaijan. In this regard, Azerbaijan actively cooperates with Kazakhstan and other Central Asian countries, with which it is also connected by the trans-Caspian route. At the same time, our country is a significant participant in the International Transport Corridor (ITC) "North-South" and acts as a key partner of Russia. It is appropriate to recall that from January 1 to March 28, 2023, the volume of transshipment along the western route of the North-South Corridor was 2.15 million tonnes, with an increase of 84.37%. Moreover, these figures will increase manifold in the coming years, taking into account the recent agreements between Moscow and Iran, which agreed to co-finance the completion of the 170 km rail section of Resht-Astara with subsequent docking of rails at the Azerbaijan-Iran border, which means the launch of a through rail link in the ITC project.
According to the President of Azerbaijan, the Zangazur Corridor initiative is another promising project that will contribute to the expansion of transport links with the countries of the region. This corridor will not only connect the mainland with the Nakhchivan Autonomous Republic but also become the most important international railway route in Eurasia.
Summing up the mentioned facts President Ilham Aliyev stated that the economy of Azerbaijan has shown steady growth for almost the whole period of independence: GDP has more than tripled within the last 20 years, on the contrary, the poverty level has reduced from almost 50% to 5%. Today, the external debt of the republic is at the level of less than 9% of GDP and is decreasing from year to year, and foreign exchange reserves exceed the external debt by 10 times. Most of Azerbaijan's economy is formed in the non-oil sector, but the key perspective is to diversify exports and multiply the share of non-oil products.
In general, due to the above-mentioned trends, the country has achieved full economic independence, which is an important factor in providing an opportunity to conduct an independent foreign policy course. Particularly, Azerbaijan has been chairing successfully the Non-Aligned Movement for about four years, which unites 120 states and is the second biggest international institution after the UN.
"Although the unemployment rate is only 5%, our demographic growth - Azerbaijan's population has grown from 7 to 10 million over the past thirty years - requires active efforts to create new jobs, and of course, we look forward to strengthening our active engagement with EAEU member states - both in the bilateral format, which we are successfully doing, and in the multilateral format," President Ilham Aliyev stressed.
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