"Made in Karabakh" brand: Long-awaited game changer for country's economic prospects "Heart of Azerbaijan" is beating again

Non-oil development, including the creation of industrial clusters in Karabakh, is identified as a long-term driver of Azerbaijan's progress. It is expected that the residents of Aghdam Industrial Park will start exporting within the framework of pilot projects already this year. To boost the work in this direction, the Export and Investment Promotion Agency (AZPROMO) has developed a project "Made in Karabakh - Heart of Azerbaijan".

The National Export Strategy is expected to be adopted in the first half of the year, and logistics subsidies will be provided to companies promoting the Made in Azerbaijan brand. Yusif Abdullayev, Executive Director of AZPROMO, spoke about these and other vectors of developing non-oil production and exporting in 2024 at the Forum held on January 29.

It seemed that not much time had passed since the Azerbaijani forces liberated the destroyed and looted towns and villages of Karabakh from almost 30 years of occupation. In Aghdam, which was wiped off the face of the earth, not a single house, industrial or social facility was left standing, all historical monuments, mausoleums and cemeteries were destroyed, and even trees and lamp posts were uprooted. Now, the much-anticipated production of products in the Aghdam industrial cluster is expected to start this year.

It should be remembered that according to the first plan of the state program "The Great Return to the Liberated Territories of Azerbaijan", the mass return of the population to Aghdam in 2025 is planned. To this end, intensive housing construction is underway, and in the medium term about 42 thousand citizens of our country are expected to return to the city and villages of this district.

To provide jobs for future residents of the district, the largest industrial zone in the region - Aghdam Industrial Park - will be created here on an area of 190 hectares in the second half of 2021, where 19 resident companies and 6 non-resident structures are currently registered. These companies plan to invest more than $103 million in industrial projects and create more than 1.7 thousand permanent jobs.

"As part of the pilot project, the residents of Aghdam Industrial Park will start production and export their products this year," said Yusif Abdullayev, head of AZPROMO, during a press conference dedicated to the results of last year's activities.

Among other things, it is planned to establish the production of building materials such as pipes, metal products, facade plaster, insulating materials, reinforced concrete works, and roofing in the Aghdam Industrial Park. A factory of ventilation and fire-fighting equipment, a shoe and tobacco factory, a wallpaper factory, etc. will also be set up here.

According to data published by the Economic Zone Development Agency (IZIA) at the end of last year, about 10 of the registered residents are already actively carrying out construction and installation works. Several companies are expected to open by the end of spring 2024. These will most likely be a building materials production plant, and shoe and wallpaper factories, and it's possible that by the end of May, the construction of an automation and telecontrol systems (railway signalling) production plant will be completed.

As in other industrial parks and districts of the country, the Aghdam Industrial Park's import-substitution production and the "Araz Valley Economic Zone" industrial and logistics cluster under construction in the Jabrayil district are aimed at foreign markets.

The first export of Karabakh industrial products is scheduled for the second half of this year. In this regard, AZPROMO has accelerated work on the implementation of the "Made in Karabakh - Heart of Azerbaijan" trademark project and, according to Abdullayev, the rules for the use of this trademark have been prepared and submitted to the relevant structures.

It is expected that the first to receive the "Made in Karabakh" trademark will be the enterprises located in the Agdam Industrial Park. In addition to the strengthening of the commercial component, it is crucial from the geopolitical point of view, as it will once and for all establish a new geographical brand for Azerbaijan.

At the same time, the Export Promotion Agency is accelerating the promotion of the country's "Made in Azerbaijan" brand, including the provision of logistical support to exporters promoting this brand. The processes related to the implementation of this initiative are in their final stages. In general, Azerbaijan plans to significantly increase exports of non-oil products and is working on creating new financing mechanisms, introducing fiscal, customs and other forms of support for SMEs, including those operating in industrial clusters.

This year will see a significant increase in the number of international Forums and Exhibitions that are designed to help export initiatives. For example, Azerbaijan will host the National Export Forum in autumn 2024, and with the support of the Agency, Azerbaijani exporters will participate in exhibitions in Germany, Japan, the Republic of Korea and China. Two more Azerbaijani trade houses are expected to be opened in the Celestial Empire - in Chengdu and Nanjing.

AZPROMO plans to adopt a National Export Strategy in the first half of 2024 to bring together all these administrative mechanisms, regulatory documents and various preferential instruments into a single concept. About three years ago, specialists from AZPROMO, together with experts from European and other international organisations, developed a new National Export Strategy for the medium term.

The document includes three basic principles: creating a new culture of export promotion in the republic, producing products that meet the needs of foreign markets, as well as spreading the "Made in Azerbaijan" brand in the world market, including through trade and wine houses, promoting and advertising products within the framework of trade missions, international exhibitions and business forums.

The trade geography expansion policy envisages an increase in supplies of domestic non-resource goods to 15 target markets, mainly China and Southeast Asia, the Persian Gulf and North Africa, and Southern and Eastern Europe.

The strategy has identified some 118 priority products and goods in seven main categories for external supplies. In return, support for export financing instruments will be expanded, and fully upgraded Made in Azerbaijan and Invest in Azerbaijan websites will be launched. If the new strategy is successfully implemented in the future, Azerbaijan may consider creating its analogue of EXIMBANK, a structure focused on lending to counterparties to promote Azerbaijani products and services in foreign markets.

According to estimates by the Ministry of Economy, all these measures will enable Azerbaijan to increase the volume of its non-oil exports to at least $5 billion in four years. Taking into account the dynamics of non-oil exports last year, these plans are quite realistic.

In 2023, Azerbaijan exported $3.348 billion worth of non-oil products to over 110 countries, 9.8 per cent more than in the record year 2022. According to international experts, Azerbaijan will further increase the pace of non-oil production and exports in 2024 against the background of a favourable external environment. This will bring the country closer to achieving its goals.