Baku, Nur-Sultan reach trade turnover of $1 billion Review by Caliber.Az

In a rapidly changing world, hyperinflation, energy and food crises, Azerbaijan and Kazakhstan were able to maintain the enviable stability of national economic models. Moreover, the two friendly states set out to bring bilateral trade and economic ties to a qualitatively new level, expand cooperation in the transport sector, tripling trade turnover in the medium term. At the Azerbaijani-Kazakh business forum held in Baku the day before [June 7], new trade agreements were concluded and documents were signed in the field of eliminating technical barriers to trade. And also on the eve of the meeting of the intergovernmental commission scheduled for early July, the parties discussed aspects of expanding business cooperation.

This year Azerbaijan and Kazakhstan are celebrating the 30th anniversary of the establishment of diplomatic relations, and this significant event in the recent history of our states will be touched upon during government visits, business and humanitarian forums, etc. In particular, on July 4-5, the 18th meeting of the Azerbaijan-Kazakhstan intergovernmental commission on trade and economic cooperation is scheduled to be held in Nur-Sultan, the capital of Kazakhstan. The meeting will discuss aspects of cooperation between the countries in various fields, including unused business resources, primarily with the aim of expanding cooperation between companies in the non-oil sector. This is designated as a priority area, since in recent years Baku and Nur-Sultan have been implementing large-scale economic reforms in accordance with the realities of the post-oil era, and both countries are aimed at strengthening regional industrial integration.

Last Tuesday, a business forum was held in Baku, organised on the initiative of the trade and economic mission of Kazakhstan. "This year we are celebrating the 30th anniversary of the establishment of diplomatic relations between our countries. And currently, a comprehensive program for the development of cooperation until 2026 is being prepared. The countries are also forming the Kazakhstan-Azerbaijan Business Council, and this platform promotes regular dialogue between the business circles of the two countries and the strengthening of trade, economic and investment cooperation," Kazakh Ambassador to Azerbaijan Serzhan Abdikarimov said during the business forum. According to the diplomat, the trade turnover between Azerbaijan and Kazakhstan is growing, direct flights have been resumed, and business and human contacts with them have been resumed.

As the consequences of the pandemic crisis are overcome, trade activity between the countries is growing, and the range of goods supplied is expanding. Kazakhstan mainly exports to our country rolled carbon steel and finished metal products, railway and automotive equipment, locomotives, chemical raw materials, and wheat. But in the reverse direction, polypropylene and other polymer raw materials, electrical equipment, prefabricated building structures, as well as fruits, vegetables, wine products, etc. come from Azerbaijan. Thus, last year the trade turnover between the countries amounted to $ 300 million, more than doubling compared to the indicators of the crisis in 2020 - $140 million. At the same time, it is quite obvious that the current level of trade does not fully reflect the economic potential of the countries, and since last year, work has been underway at the government level to maximise the expansion of business ties, diversify their structure, including through the growth of investment cooperation.

According to the estimates of Azamat Askarula, Director General of the Center for the Development of Trade Policy QazTrade JSC, the trade turnover between Azerbaijan and Kazakhstan in the first quarter of 2022, having tripled, reached $100 million, and by the end of the year the volume of trade may reach $500 million, and in the near future, the bilateral turnover is planned to increase to $1 billion. This is a very ambitious goal, and in order to achieve it, it is necessary to qualitatively expand trade opportunities, and involve more entrepreneurs in various areas of the non-oil sector in the process of foreign economic relations.

The fact that this task is being implemented in stages is evidenced by the results of the business forum held in Baku the day before: the parties signed a number of memorandums of cooperation, including on the supply of rolled steel, sunflower oil, salt, rice and paint products. Among other things, memorandums of the partnership were signed between Kazakhstan's QazTrade and the Public Association of Ganja Entrepreneurs, as well as an agreement was signed between the Kazakhstan Institute of Standardisation and Metrology and the State Committee for Standardisation, Metrology and Patents of Azerbaijan. This weighty document is designed to help eliminate technical barriers in trade between Azerbaijan and Kazakhstan and facilitate the cross-border movement of goods. The agreement between the two relevant departments will allow for the rapid exchange of information in databases on standardisation issues and will ensure integration between the relevant information systems of the two countries.

This year, it is planned to conclude a number of agreements aimed at integrating the trade, economic and transport legislation of the two countries, and other documents that contribute to the long-term and sustainable expansion of business ties. Thus, within the framework of the visit of Kazakh President Kassym-Jomart Tokayev to Azerbaijan scheduled for this year, it is planned to sign a number of documents, including a comprehensive program for the development of bilateral cooperation until 2026, as well as a new intergovernmental agreement on trade and economic cooperation.

A meeting of the Turkish, Azerbaijani and Kazakh foreign ministers, Mevlut Cavusoglu, Jeyhun Bayramov and Mukhtar Tleuberdi is scheduled for June 27 in Baku, where, among other things, aspects of the development of a strategically important transport route - the Middle Corridor will be considered. The expansion of transport cooperation between the two countries, including within the framework of transit projects, is recognised as one of the most promising and profitable areas of cooperation. "It is necessary to work on the development of the Trans-Caspian International Transport Route (TITR), an extremely important undertaking implemented by Azerbaijan and Kazakhstan. It is expected that by late 2022, the volume of cargo transportation along this route will increase sixfold," Ambassador Abdikarimov said.

Currently, a number of initiatives are being implemented in Kazakhstan to expand the transit and transport potential of TITR: it is planned to create a container hub on the basis of the Aktau Seaport SEZ, and the merchant fleet of the neighbouring country will be replenished with four ferries, global container operators such as PSA International, Maersk and MSC will be involved. The construction of the second railway line and electrification of the Dostyk–Moynty railway section is planned for 2022-2025, which will increase the speed of container trains and increase the capacity of the section by five times.

At the same time, Baku and Nur-Sultan plan to accelerate the process of unification of tariffs for cargo transportation and synchronization of customs procedures in order to expand transit traffic along international corridors with the connection of cargo traffic from China and Turkey. A clear example of the effectiveness of transport cooperation between the eastern and western shores of the Caspian Sea is the uninterrupted operation of the Aktau- Baku–Aktau feeder line and the ferry crossing, a multiple increase in cargo transhipment. In order to reduce the time for processing ferry cargo between Kazakh and Azerbaijani ports, a new procedure for processing transportation documents on the principle of "one window" has been introduced, as a result, the time for this has been reduced from 10-12 hours on average to four hours, and customs and border authorities, temporary storage warehouses operate around the clock. And soon, Azerbaijan and Kazakhstan and their partners in the region plan to introduce a single electronic transit permit mechanism to expand road cargo transportation.

As the consequences of the pandemic crisis were overcome, Baku and Nur-Sultan intensified work on joint high-tech projects: during the international forum "Space Technology Conference" (STC 2022) held in Tashkent in May, an agreement was signed between Azerkosmos and the Kazakh state company - JSC "Garysh Sapary", on the implementation of joint projects in the field of space and mutual use of satellite resources. The countries are also connected by the joint implementation of the largest communication project: since the end of last year, KazTransCom and the Azerbaijani operator AzerTelecom have accelerated work on the project of laying an optical cable along the bottom of the Caspian Sea with a length of about 380-400 kilometres and a capacity of about 4-6 terabits/s.

Along with the expansion of Azerbaijani-Kazakh trade and transport projects, the investment component is gradually gaining momentum: today more than five hundred companies with Azerbaijani capital are registered in Kazakhstan, operating mainly in the field of trade and intermediary activities, road and capital construction, processing and logistics. In turn, about 145 companies with Kazakh capital operate in Azerbaijan. It is possible that the interest of Kazakhstani entrepreneurs in our country will soon expand, a number of companies from the neighbouring country are planning to participate in contract work and, possibly, invest in projects for the revival of the Karabakh and East Zangezur economic regions.