Economy of return: building the future in Karabakh Review by Khazar Akhundov

For six years now, Azerbaijan has been implementing a large-scale programme for the revival of Karabakh and East Zangezur. A key component of the ongoing work is the development of agro-industrial enterprises and the creation of a logistics hub. To this end, large industrial zones have been established in the territories liberated from occupation – the Aghdam Industrial Park and the “Araz Valley Economic Zone.”

In addition, production clusters are being formed in Khankendi and Khojaly, where on May 28 – Independence Day – President of Azerbaijan Ilham Aliyev took part in the opening ceremony of industrial facilities. During his visit, the head of state also reviewed reconstruction work being carried out in a number of settlements in the Karabakh region.

Over the years of implementation of the “First State Programme on the Great Return to the Territories of Azerbaijan Liberated from Occupation,” large-scale projects of enormous scope have been carried out: cities and villages are being built and restored, along with road, energy, and utility infrastructure. Residential buildings and social facilities are being constructed, while industrial clusters, as well as commercial, service, and tourism facilities, are being commissioned.

Equally significant is the financing of these initiatives: over more than five years, the volume of funds allocated for reconstruction work in the liberated territories has reached 23 billion manats ($13.5 billion), and in the near future, total budget allocations for these purposes are expected to reach approximately 30 billion manats ($17.6 billion).

All of this work is being carried out under the direct supervision of President Ilham Aliyev: the head of state visits the liberated territories, takes part in foundation-laying and opening ceremonies for infrastructure, industrial, residential, social, and other facilities. In particular, on May 28, Ilham Aliyev inspected reconstruction work on individual residential houses and infrastructure in the village of Boyuk Galaderesi in the Shusha district.

Aydin Karimov, the Special Representative of the President of the Republic of Azerbaijan in the Shusha district, briefed the head of state on the work carried out in the village of Beyuk Galaderesi. It was noted that a number of projects had been implemented to create necessary living conditions for citizens and address social issues: residential houses have been restored, power transmission lines have been laid, as well as a new gas pipeline and distribution water supply lines, and the relevant utility infrastructure has been established. At present, work continues in the village on laying communication lines, while intra-village roads have also been improved.

During a meeting with residents who had returned to the village, the President of Azerbaijan particularly noted that they were celebrating Independence Day and Eid al-Adha on their native Karabakh land.

“I sincerely congratulate you on this occasion. Returning to one’s native homeland after a long separation is a profound happiness [...] We have been restoring these lands, towns, and villages devastated by the Armenians for five years now. And how are we doing it? It is unparalleled in the world. To accomplish this volume of work in just five years—only a strong state can do it. The foundation of this strong state is the unity between the people and the government [...] Excellent conditions have been created for you here. Almost all of the houses here had been destroyed. Seventeen houses are ready, twenty more will be completed during the second phase, and additional houses will be built afterward. Work is also underway in the surrounding areas—Kichik Galaderesi, Turshsu, and Saribaba,” the Azerbaijani leader stated, emphasizing that Lachin is nearby, Shusha is nearby, and a new road is being constructed, which will make travel more comfortable.

On the same day, in the Khojaly district, the head of state inspected conditions created in fully renovated private houses intended for servicemen of the Ministry of Defence and took part in the opening of a fully reconstructed Cultural Centre in the city of Khankendi.

Work on developing the industrial potential of the cities of Khojaly and Khankendi is also progressing no less intensively. Together with Aghdam, they are part of a single agglomeration being formed as an industrial centre for the entire Karabakh region, and today they lead in terms of capital attracted to production projects.

The “Aghdam Industrial Park” has become the core of this system. The creation of its infrastructure began in May 2021. Today, 149.7 million manats ($88 million) have been invested here, 30 business entities have been granted resident status, and five entrepreneurs have received non-resident status. Businesses operating in this industrial park are provided with extensive tax and customs incentives, as well as utilities and rental benefits.

Thus, a highly favourable business environment has been established here, attracting investors who can immediately implement their projects on a Plug and Play basis. As a result, more than 1,000 permanent jobs have already been created in the second-largest industrial park of the country. In the near future, as over thirty enterprises are commissioned, more than 2,400 people are expected to be employed in the Aghdam industrial zone.

The industrial strategy is also being implemented in other settlements of the Aghdam agglomeration. In Khankendi, a large sewing factory, Businesstex JV, has been operating since last year, employing more than 200 people. In addition, on May 28 of this year, with the participation of the head of state, another light industry enterprise was inaugurated there, with an investment of 3.5 million manats ($2 million). The GP Safety LLC factory will produce 25 million pairs of various types of work gloves annually. It currently provides employment for 35 people, and in the future, its products are planned to be exported to the European market.

The industrial vector is also developing successfully in the Khojaly district. Thus, in July last year, a modern brick factory was commissioned in the village of Dashbulag, designed to produce 16.2 million bricks annually. The project cost amounts to 8.5 million manats ($5 million), and once the enterprise reaches full capacity, it will provide employment for 120 people.

A year ago, in the village of Ballija, Accurate Az LLC built a furniture production facility for office furniture and accessories. The plant is expected to produce 240,000 units of office furniture in 20 different types, as well as 4 million units of furniture accessories, with around 60% of its output planned for export.

This trend continued with the commissioning of the Garabagh Textile House factory in Khojaly, the opening ceremony of which was attended by President Ilham Aliyev on Independence Day. Minister of Economy Mikayil Jabbarov and the founder of the company, Rizvan Tahmazov, briefed the head of state about the enterprise. It was noted that 4.2 million manats ($2.5 million) were invested in the project, and the factory—equipped with Turkish and Chinese technological machinery—will produce 1.4 million units of textile products annually. The majority of raw materials will be sourced locally, although imports from Türkiye, Uzbekistan, and China are also envisaged.

The finished products will be sold not only on the domestic market but also abroad. At the initial stage, production will include home textiles such as bed linen, bedspreads, and towels. The factory will provide permanent employment for 85 people, and in the future, it is planned to expand production to include garments as well, increasing the number of jobs to 200.

In addition, new factories in Khojaly and Khankendi will have access to all benefits provided for other enterprises operating in the territories liberated from occupation.

All these achievements leave no doubt that the work on the revival of Karabakh and East Zangezur will continue successfully in the future. This will contribute to the rapid return of hundreds of thousands of people who, as noted by President Ilham Aliyev in his speech at the opening ceremony of the 13th session of the World Urban Forum (WUF13), were deprived of their fundamental right — the right to live on their own land.