Turkic Investment Fund's role in expanding OTS cooperation Baku forum highlights key areas for joint investment 

In recent years, Azerbaijan and its partners in the Organization of Turkic States (OTS) have been working closely to boost investment and implement joint projects in the non-oil sectors of their economies. A key priority for OTS countries is providing financial support for innovative projects in areas such as industry, logistics, energy efficiency, IT technologies, and the "green" economy.

The new opportunities in the business track and the prospects for expanding investment cooperation among the OTS countries were discussed at the meeting held in Baku on February 14, titled "Turkic Investment Fund (TIF) and the Union of Turkic Chambers of Commerce and Industry (TCCI): Informative meeting with business leaders and B2B."

In a relatively short period of time, the member countries of the Organization of Turkic States have managed to launch sustainable and viable integration mechanisms in the economic sphere, outlining the contours of the Turkic world as a new geopolitical reality. This is particularly important in light of the ongoing economic crises and persistent global conflicts that threaten the stability of the world order established eight decades ago.

"It is necessary for a new actor, a new serious player with a serious agenda, to emerge. For example, we believe that the Organization of Turkic States can become a serious power centre on a global scale. Because it has vast geography, human resources, natural resources, transport and communications, and unity," stated Azerbaijani President Ilham Aliyev in early January this year during an interview with local television channels. 

Notably, the key focus of the OTS countries' integration efforts is on expanding commercial ties, establishing a preferential trade regime, reducing customs and transport tariffs, as well as developing logistical connections. At the same time, business cooperation is seen as an equally important avenue of collaboration, with an emphasis on increasing efforts in investment, forming joint ventures (JVs), which are expected to become the main drivers of economic growth in the region. Today, the OTS countries are focused on advancing integration initiatives in the fields of transport, "green" energy, and implementing joint investment projects in finance, industry, tourism, IT technologies, automotive manufacturing, agriculture, and the processing of agricultural raw materials.

To implement projects in the listed areas, the OTS countries aim to expand integration in the financial sector, including optimizing the process of attracting preferential financing. In particular, the creation of the Turkic Development Bank is planned, and there is also an intention to actively involve international financial institutions and foreign investment companies in capital-intensive projects of regional significance. To these ends, at the initiative of Azerbaijan, Türkiye, Kazakhstan, Kyrgyzstan, and Uzbekistan, the Turkic Investment Fund (TIF) was established, with its founding session held on May 18, 2024 in Istanbul. The Fund was established to provide technical support for projects in both the public and private sectors in Turkic-speaking countries.

The expansion of the financial and investment component in the joint initiatives of the OTS countries was the focal point of a meeting held on February 14 in Baku for business leaders and B2B participants. The event saw the participation of the Turkic Investment Fund (TIF) and the Union of Chambers of Commerce and Industry of the Turkic World (TCCI). A key highlight of the forum was the signing of a memorandum of understanding between the TIF and TCCI, which outlined the framework and specific areas of cooperation between the two entities.

"The authorized capital of the Turkic Investment Fund has been increased by $100 million, or 20%, to $600 million," noted Elnur Aliyev, First Deputy Minister of Economy of Azerbaijan, during the Baku meeting. "The growth in the Fund’s capitalization occurred as a result of Hungary joining the TIF." 

According to the deputy minister, the TIF can play an important role in stimulating cooperation between Turkic countries, and the increased authorized capital of the Fund promises broad prospects for the development of trade and entrepreneurship, as well as financing regional projects, particularly initiatives for micro, small, and medium-sized enterprises.

"As one of the founding countries of the TIF, we call for further deepening business integration among our countries through joint projects and innovative initiatives, making the most of the Fund’s opportunities, which will allow us to fully realize the economic potential of Turkic states and secure stronger positions in global markets," the deputy minister added.

One of the key points was the possibility of using the funds of the Turkic Investment Fund not only to finance large capital-intensive intergovernmental projects but also to allocate resources for initiatives from small and medium-sized enterprises (SMEs). 

"We are very pleased that the proposals for financing SME projects, presented by the Azerbaijan Small and Medium Business Development Agency (KOBİA), are reflected in the TIF activity agreement," said Orkhan Mammadov, Chairman of the Board of KOBİA, during the business leaders' meeting. "The Fund supports the expansion of the transport and logistics chain, and in this regard, our Agency can support the creation of a digital platform – an export accelerator for SMEs to facilitate their integration into the regional supply chain." 

The head of KOBİA also noted that SMEs are actively promoting the application of ESG (Environmental, Social, and Governance) principles in Azerbaijan, and for this purpose, the ESGHUB platform has been created: "Considering that TIF supports various development projects in relevant areas, we can cooperate in promoting cluster companies."

The new opportunities emerging from the expanding cooperation between the TIF and TCCI, which signed a memorandum of understanding in Baku, create the conditions for more active participation of SMEs and the private sector as a whole in the initiatives of the Organization of Turkic States. 

"The memorandum institutionalizes the partnership between key economic organizations of the OTS and will accelerate investments in the member countries of the organization. The activation of TIF’s activities will support small and medium-sized businesses, finance key infrastructure and economic projects, and expand trade and investment opportunities," said Kubanychbek Omuraliev, Secretary General of the OTS, a participant in the Baku meeting. 

"Among the Fund's priorities are providing financial support for innovative projects in the fields of industry, logistics, energy efficiency, information and communication technologies, and the ‘green’ economy." The OTS Secretary-General urged businessmen from Turkic countries to expand investments in joint regional projects, noting that the volume of trade between member states currently accounts for only 7% of the total exports of Turkic countries, and to increase this figure, more investments must be attracted.

According to Murat Karimsakov, Chairman of the Kazakhstan Foreign Trade Chamber, who also participated in the business leaders’ meeting and B2B information session, business plays a key role in ensuring the sustainable development of the economies of OTS countries amid the current global economic challenges. 

"Today, more than ever, it is crucial to build effective mechanisms for trade and economic cooperation, strengthen investment collaboration, and consolidate business efforts within the OTS initiatives," emphasized Karimsakov. 

In his view, promising investment areas include deep processing of agricultural products, petrochemicals and gas chemistry, as well as the development of high-tech industries, stimulating innovation activities, and implementing advanced technologies. As the Kazakh participant in the meeting believes, a key task for the OTS countries is consistent cooperation to create a favourable investment climate, necessary for attracting investments and establishing joint ventures.