Three pillars of cooperation among Turkic States Trade, transport, investments

In recent years, Azerbaijan and its partners in the Organization of Turkic States (OTS) have been working together to establish a regime of trade preferences, simplify customs procedures, increase investment components, and expand transport corridors, implementing new joint projects in the real economy sector. 

The achievements in business collaboration and the prospects for further expanding economic ties among OTS countries were the focus of discussions at the Turkic Chambers of Commerce and Industry (TCCI) General Assembly, held recently in Baku.

In a relatively short period, the member countries of the Organization of Turkic States (OTS) have launched stable and viable integration mechanisms in the economic sphere, shaping the contours of the Turkic world as a new geopolitical reality. Against the backdrop of ongoing global conflicts and a series of economic crises, the Turkic world, located across the vast expanse of the Caspian region and the Middle East, remains an island of stability and prosperity, demonstrating brotherly cooperation and mutually beneficial business partnerships.

By expanding trade and transport connections, investing in joint ventures, and forming partnerships, OTS countries are focused on accelerating growth and diversifying their national economies. In this regard, the Turkic states are making steady progress: the combined economic growth in OTS member states in the first half of 2024 reached around 6%, double the global average of 3.1%. Meanwhile, in the first half of this year, the Gross Domestic Product (GDP) of OTS countries reached $900.4 billion, accounting for 1.7% of global GDP, while total trade turnover amounted to $508.8 billion, or 3.2% of global trade.

Today, the member countries of the Organization of Turkic States (OTS) are focused on advancing integration initiatives in areas such as transport, green energy, and joint investment projects in finance, industry, trade, tourism, IT technologies, and more. It is encouraging to note that within Azerbaijan's trade strategy, significant attention is being given to the growing commercial relations with OTS countries.

"As of January-November 2024, Azerbaijan's trade turnover with the member countries of the Organization of Turkic States reached $6.3 billion, with the share of Azerbaijan's exports to Turkic countries amounting to $3.7 billion. This demonstrates the significant contribution of our country to trade relations with OTS partners," said Elnur Aliyev, First Deputy Minister of Economy of Azerbaijan, speaking at the Turkic Chambers of Commerce and Industry (TCCI) General Assembly in Baku.

The deputy minister emphasized that OTS member states possess considerable potential for further enhancing trade and economic ties, and there is a need to strengthen efforts in this direction. In this regard, Aliyev believes that joint projects and the acceleration of reforms aimed at simplifying and digitalizing trade, as well as optimizing transport and cross-border procedures, are of utmost importance.

In recent years, Turkic states have not only been expanding commercial ties, but also focusing on implementing collective agreements on preferential trade. For instance, the agreement between Azerbaijan and Türkiye entered into force in March 2021. Under the "Trade Facilitation Strategy," OTS member states also aim to streamline mechanisms for electronic trade: intergovernmental agreements are expected to be signed soon between Azerbaijan, Kazakhstan, Uzbekistan, Kyrgyzstan, and Türkiye.

The agreement specifically aims to enable paperless trade, with the introduction of electronic invoicing and electronic bills of lading, allowing for seamless interaction between information systems. Furthermore, each of the parties will establish a digital "single window," through which participants in commercial operations can submit e-documentation or data requirements for the import, export, or transit of goods via a single point of entry.

The issue of expanding trade relations cannot be considered in isolation from transport and logistics policy, and it is no surprise that among the key priorities for Central Asia, Azerbaijan, and Türkiye is the optimization of regional logistics, modernization of transport infrastructure, the introduction of digital technologies, tariff unification for transport services, and the reform of customs legislation.

"Member states of the OTS must act together in the face of growing global trade wars," said Rifat Hisarcıklıoğlu, President of the Union of Chambers and Commodity Exchanges of Türkiye, at the forum in Baku. "It is essential to steadily increase trade among Turkic countries and eliminate existing obstacles in this area. In this regard, it is crucial to simplify customs procedures collectively." He added that Turkish specialists are ready to share their expertise with Turkic countries on this matter.

At the same time, the efforts of OTS countries, in partnership with China, are focused on significantly increasing cargo traffic via the Trans-Caspian International Transport Route (TITR). In this regard, unprecedented modernization of port and railway infrastructure in the Caspian region is underway.

In January-November 2024, cargo traffic along the Middle Corridor increased by 63%, reaching 4.1 million tons, while container traffic saw an even more remarkable growth of 2.6 times, reaching 50,500 TEU. To reduce delivery times for goods within the Turkic states region, a multimodal digital platform, the Digital Trade Corridor, has also been established.

"Currently, work is underway on a number of joint digital projects that will facilitate and expedite cargo transportation along the Middle Corridor," said Kubanychbek Omuraliev, Secretary General of the OTS, speaking in Baku the day before.

The member states of the OTS aim to expand integration in the financial and investment sectors, including efforts to optimize the process of attracting concessional financing and implementing joint projects. In this regard, the Turkic Investment Fund was established, with its founding meeting held in May of this year in Istanbul.

"Between 1995 and 2024, the volume of mutual investments between Azerbaijan and the member states of the Organization of Turkic States (OTS) amounted to approximately $37 billion: of this, around $17 billion was invested by OTS countries in Azerbaijan, while the remainder represents Azerbaijani investments in Turkic countries," said Elnur Aliyev, Deputy Minister of Economy, during the forum. "We have signed agreements on the promotion and protection of investments with all Turkic states, which has created a legal framework for further strengthening and expanding our business ties."

In this regard, Yusif Abdullayev, Executive Director of the Azerbaijan Export and Investment Promotion Agency (AZPROMO), believes it is essential to more actively utilize the Union of Chambers of Commerce and Industry of Turkic States as an effective platform for mutual investments. He also emphasizes the need to leverage the financial potential of the Turkic Investment Fund to increase the capitalization of joint business initiatives. A similar sentiment was expressed by Baghdad Amreyev, President of the Turkic Investment Fund, who stated that OTS countries should invest in the industries of the future and develop the necessary skills for this.

The Fund has identified the development of joint projects that accelerate the "green" transition as a key priority. At the same time, the investment fund will provide financial support for national, joint, and regional projects that contribute to increasing trade and investment, expanding transport, energy, and digital connections, and offering technical support to SMEs and startups.