Uzbek president's visit to Baku indicative of brotherly ties An analysis by Caliber.Az

The state visit of the Uzbek President, Shavkat Mirziyoyev to Azerbaijan, which began just a short while ago is marking, together with the joint Azeri-Uzbek business forum organized earlier on August 21, new directions of economic relations between the two countries. The business circles of the two friendly states intend to not only significantly expand trade but also to considerably strengthen the investment component for the implementation of joint projects in the petrochemical, gas, mining and transportation sectors. In the course of the visit by the leader of Uzbekistan and the hosted business forum, a number of documents were signed, defining the long-term prospects of cooperation between Baku and Tashkent.

Market transformations and the policy of openness and regional integration pursued by the President of Uzbekistan, Shavkat Mirziyoyev, as well as the correlating responsive efforts of the government of Azerbaijan to expand economic ties with the Central Asian States have become a solid foundation on which the business communities of the two countries have been cooperating in the last few years. Baku and Tashkent are very closely involved in the integration efforts of the Organization of Turkic States (OTG), cooperate in regional transport-transit and logistics projects, and are actively increasing bilateral trade. Uzbekistan, in particular, which does not enjoy direct access to the Caspian Sea, is an active carrier and partner of the participating countries of the Trans-Caspian International Transport Route (TITR) and other routes making up the "Middle Corridor", with the viewpoints of Baku and Tashkent on the expansion of transit and the increase of cargo volumes along the Trans-Caspian Corridor in full alignment. Cooperation in the field of civil aviation has also been very active recently: the airlines of the two countries carry out 15 flights per week, with the Baku Forum resulting in further agreements which seek to increase the intensity of air traffic.

Trade indicators reflect the vivid dynamics of transport cooperation: while Azerbaijan’s trade with Uzbekistan amounted to a relatively small $31.2 million in 2017, this figure reached $182 million at the end of last year, which is more than half the level of the previous year. In January-June 2023, mutual trade reached $84.6 million, increasing by 1.7%. At the same time, the two countries are aiming to increase bilateral trade to $1 billion over the next five years. According to the business forum participants, the same high standard will be achieved by increasing the mutual supply of pharmaceutical and petrochemical products, plastics, polymers, mining products, agricultural goods, etc.

Such a powerful trade breakthrough is supported by, among other things, a robust foundation made up of treaties and legal regulations, comprising over 130 inter-state, intergovernmental and inter-agency agreements, including the recent "Declaration on Deepening Strategic Partnership and Enhancing Comprehensive Cooperation".

The other most important driver of business cooperation in the past two years has been the efforts of the governments and businesses of the two countries, which have focused on the implementation of joint production projects in the automotive, agricultural and light industries sectors, such as the joint Azerbaijani-Uzbek enterprise that has been working for two years in the Hajigabul industrial quarter on the assembly of Chevrolet cars. Within the framework of the second stage, the range of models and the level of localization of production of the Azeri-Uzbek project will be further expanded. In accordance with this undertaking, an event for the ceremonial pouring of concrete at a new production plant was held in May this year in Hajigabul, possessing a design capacity of 30,000 cars a year.
The joint venture (JV) created by "Azermash" of Azerbaijan and the Uzbek "UzAvtoSanoat" plan to launch the production of Chevrolet's brands such as Cobalt, Malibu, Tracker and Equinox. Moreover, the large-scale assembly will be replaced by a more complete production cycle, including body welding and car painting, and the third stage in Azerbaijan is planned to localize the production of spare parts. In the future, the goods of the Azerbaijani-Uzbek JV are planned to be exported to Türkiye, CIS countries and other countries in close proximity.

The setting up of a plant for the primary processing of cotton is also planned in Azerbaijan, with the support of the largest regional manufacturer of cotton cleansing equipment - Uzbek company PAHTAMASH.

Regarding projects of a medium-term timeline, Baku and Tashkent are working on joint projects totaling $800 million. To this end, an intergovernmental agreement on the establishment of a joint investment fund with a capitalization level of $500 million for the implementation of promising industrial and agricultural projects was reached. The citizens of the two countries will see the results of today’s negotiations in the practical implementation of projects both in Azerbaijan and Uzbekistan. The recently created joint investment fund, with an approved budget of $500 million, will utilize this amount quickly and it will be necessary to increase it", said Azerbaijani President Ilham Aliyev in a joint press statement after the talks with Uzbek President Shavkat Mirziyoyev.

The success of the planned joint investment ventures should not be doubted, as the number of joint Azerbaijani-Uzbek enterprises has quadrupled in recent years. In particular, there are 204 enterprises with Azerbaijani capital in Uzbekistan - in trade, engineering and metalworking, finance and insurance, real estate, energy, jewelry, food and light industry, pharmaceuticals and service-orientated industries. In turn, 53 Uzbek companies operate in Azerbaijan, with whose participation various projects are being implemented.

The list of areas in which the business community of the two countries plans to make joint efforts in the coming years is much broader, as evidenced by the results of the Azerbaijani-Uzbek business forum held on August 21 on the occasion of the Uzbek President's two-day (22-23 August) state visit to Azerbaijan.

Within the framework of the business forum attended by more than 250 companies from both countries, the State Oil Company of Azerbaijan (SOCAR) and its partners, namely "Uzbekneftegas" and the Ministry of Mining and Geology of Uzbekistan signed agreements on the cooperation in the oil & gas and petrochemical spheres, providing for mutual participation in the relevant projects in both countries. The prospects of cooperation in the field of trade and logistics in oil and petrochemical products and gas chemistry were also outlined, agreements were reached on the exchange of experience on digitalization of these industries and joint training of personnel. An equally important outcome of the forum was the signing of a road map for the development of energy cooperation between Azerbaijan and Uzbekistan for 2023-2025. "There are multiple energy projects on the horizon, and our energy partnership will contribute to the further strengthening of relations between our countries. I would like to recall, that Azerbaijan and Uzbekistan signed a road map for 'green' energy last year, with the development of the liberated territories and 'green' energy making up priority areas of our multifaceted cooperation", the Azerbaijani Minister of Energy, Parviz Shahbazov wrote on his Twitter page.

The energy sector is, however, not the only focus of attention of Azerbaijani and Uzbek business circles: during the Baku Business Forum, documents on the cooperation in metallurgy, accreditation and pharmaceuticals were signed between the relevant structures of Azerbaijan and Uzbekistan.

"These are very serious projects that provide a different level of relations, another level of localization of industry and development of transport logistics, because today, for us, for Uzbekistan, the transport component in our economy is a very serious one. And we, with the nearest country - Azerbaijan determine our direction, and if everything that we have agreed today will be implemented, the success will be for the economy of Uzbekistan, and for the economy of Azerbaijan", said President Shavkat Mirziyev.

The president of Azerbaijan expressed a similar position on the consistent increase of the level of business cooperation between the countries in a press statement. "Today, within the framework of meetings and negotiations, we have essentially determined the future of development of our relations. It is no coincidence that one of the documents signed today provides for the establishment of a 'Supreme Inter-state Council'. This is a high level of relations and an indicator of fraternal relations between our countries, as well as an indication that the agenda is quite broad", said President Ilham Aliyev.

Following the completion of the talks between the leaders of Azerbaijan and Uzbekistan in Baku, the heads of state visited the cities of Fuzuli and Shusha in the Garabagh Economic region of the republic, with other public and private joint events having been held on August 23.