From trade to investment: Baku, Doha expand business cooperation Analysis by Caliber.Az

In recent years, Azerbaijan has identified the Persian Gulf, Middle East and North Africa regions as key areas for expanding trade and economic cooperation. And one of the most successful examples of partnership in the field of trade, energy, tourism and investment is the Azerbaijani-Qatari business ties. The next step to expand contacts between the two countries was the visit of the Azerbaijani Economy Ministry delegation to Qatar, during which an agreement on the establishment of the Azerbaijan-Qatar Business Council was signed on October 30, Azerbaijan's Trade House opened in Doha, and cooperation in the field of "green" energy and other areas was discussed.

Over the past five years, various steps have been taken through the Economy Ministry and its structural divisions - the Azerbaijan Export and Investment Promotion Fund (AZPROMO), the Small and Medium-Sized Business Development Agency of Azerbaijan (KOBIA), as well as through trade missions to geographically diversify domestic agricultural and industrial exports. The focus is on the countries of Eastern Europe, and China, but especially on a number of Arab states, where more than a dozen Azerbaijani trading and wine houses have been created in total. Within the framework of the trade diversification policy, various presentations and seminars are held, the participation of domestic companies and small and medium-sized businesses at international exhibitions is organised, and all these steps are aimed at promoting and advertising products under the brand "Made in Azerbaijan". It is noteworthy that recently, along with the expansion of supplies of petrochemical products, including polymers and carbamide fertilisers, aluminium and other industrial products, as well as textiles, carpets, silk products, etc., AZPROMO's key efforts are aimed at promoting Azerbaijani food products. In particular, domestic wines and brandy, canned and processed fruit and vegetable products are actively promoted in the retail chains of Egypt, Jordan, Iraq, the UAE, Saudi Arabia, Oman, Bahrain, Qatar and other Gulf states.

On this track, it is appropriate to highlight the development of Azerbaijani-Qatari business ties, which, despite the short period of occurrence, demonstrate very high dynamics and huge potential for further expansion. In recent years, Baku and Doha have made every effort to strengthen and develop trade and economic cooperation: about 40 bilateral documents have been signed, which allowed expanding trade ties, as well as attracting the investment interest of Qatari business in the Azerbaijani economy. The most important step to simplify business contacts and increase tourist exchange was the agreement approved by Azerbaijani President Ilham Aliyev in January 2022 on the introduction of a visa-free regime with Qatar, according to which persons with a civil passport of two friendly countries can travel freely from one to the other.

Another step in this direction was the ministry delegation's recent visit to Qatar, during which Economy Minister Mikayil Jabbarov met Qatari Prime Minister Sheikh Khalid bin Khalifa bin Abdulaziz Al Thani. "During the talks with the Qatari head of government, the prospects for expanding bilateral cooperation in the field of energy, transport and logistics, mutual investments, and other spheres of the economy were discussed," the economy minister on Twitter. During the visit, meetings were also held with Qatar's Trade and Industry Minister Sheikh Mohammed bin Hamad bin Qassim Al Abdullah Al Thani, and with the personal representative of the Emir of the country, Sheikh Jasim bin Hamad Al Thani, at which issues of expanding trade, strengthening cooperation in various industries, as well as supporting business ties between small and medium-sized businesses of the two countries were discussed.

The current visit turned out to be very productive, in particular, agreements were reached on the creation of a bilateral business platform. "An agreement was signed in Doha with the Qatar Chamber of Commerce and Industry on the establishment of the Azerbaijan-Qatar Business Council, which will become an effective platform for cooperation and implementation of joint business initiatives of the two countries' entrepreneurs," the KOBIA's head Orkhan Mammadov, who also took part in the visit to Qatar, wrote on his Twitter page. Among other things, the new structure will also encourage investments and attract Qatari capital to our country's agricultural and processing sectors.

On the same day, the Azerbaijan Trading House opening ceremony in Doha took place. Jabbarov noted, the activity of the Trading House contributes to the support of business initiatives and stimulates the development of bilateral economic relations. The Trading House's activity, in particular, will become another lever supporting the efforts of AZPROMO and other specialized structures promoting domestic jams, compotes and fruit juices, canned food, narsharab and packaged fresh berries, lavender oil and environmentally friendly honey, Azerchai in the assortment, as well as cold-pressed vegetable oils (primarily olive oil) and other agricultural products.

However, the export of Azerbaijani food products is far from the only direction for the development of bilateral trade with Qatar, especially since today efforts are being made through AZPROMO to expand the range of exports and increase the volume of commodity supplies to the Persian Gulf countries and other Arab states. It is planned to supply Azerbaijani textiles, building materials, polymer and chemical products, energy equipment, etc.



On the other hand, the Azerbaijani-Qatari business ties have strengthened the investment component, which provides for the creation of joint ventures with companies from the rich countries of the Persian Gulf. Back in December last year, KOBIA and the Qatar Chamber of Commerce and Industry outlined plans to expand mutual business missions and create new electronic platforms for the development of trade relations between the two countries' business entities.

Well, the main trend of dynamically developing Azerbaijani-Qatari business contacts was increasing the Qatari capital's interest in Azerbaijan's industrial and transport potential. In particular, Qatari companies are directly or indirectly involved in the development of the port and aviation infrastructure of our country, relations have expanded in the agricultural sector, tourism, and since last year in the renewable energy sector (RES). Thus, one of the components of energy cooperation between the two countries is the participation of Qatari companies and capital in the construction of solar and wind power plants in the Karabakh and East Zangazur economic regions of Azerbaijan, as well as the joint development of the rich wind energy potential of the Caspian Sea's Azerbaijani sector. In particular, cooperation has been established and various projects are being discussed with the Qatari company Nebras Power, which specialises in gas turbine and wind energy projects.

Aspects of cooperation in renewable energy and the promotion of joint investments with the Azerbaijani Investment Holding were recently discussed in Doha during negotiations between Economy Minister Jabbarov and the Chief Executive Officer of the Qatar Investment Corporation Mansour bin Ibrahim Al-Mahmoud.

It should be noted here that despite the fact that the basis of Qatar's economy is oil and gas production (the third country in the world in terms of reserves of "blue fuel"), the emirate skillfully directs profits from the oil and gas industry to investment projects, mainly in third countries. Thus, the investments of the Qatar Investment Authority sovereign wealth fund alone exceed $335 billion, and the UK alone accounts for about $52 billion of the fund's investments. However, Qatar's participation in the capitalization of the world economy is noticeably greater if we add investments of private companies and investment funds. Moreover, along with such Arab countries as the UAE and Saudi Arabia, the Emirate of Qatar is one of the world leaders in terms of investments in the most promising industries – alternative energy and high-tech agricultural sector, transport and logistics hubs and industry, IT startups, tourism, etc. And this circumstance makes the efforts of Baku strategically important, striving to make the most of the opportunities for business cooperation with Doha.