Azerbaijan: Vibrant Country of the Caucasus

| February 9, 2016


Bilateral business ties between Azerbaijan and Canada have intensified considerably over recent years, but a large potential still remains to be realized.

f a transition period is one of the most painful time-spans for a developing economy, Azerbaijani policymakers and people know it much better than other societies. The collapse of the Soviet Union was not only a huge fortune for this nation, but also it was a tremendous gain in terms of economic welfare. The latter has two directions. Firstly, the Soviet Union possessed outdated technology which was not sophisticated enough to allow the Big Brother to take all the oil from the relatively unfavorable geographical environment, which mainly exists on the Caspian Sea. The primary extraction plants of the Union were on the onshore fields. The demise of the seventy-year-old regime allowed Azerbaijan to extract its own natural resources. Secondly, even though there was a strong petro-chemical industry in Azerbaijan, while it was the member of the communist club, in terms of a settled manufacturing base, Azerbaijan almost inherited nothing from the Union. Furthermore, highways, heating systems, water supply facilities, and many other public utilities were required to be renewed. Extremely underdeveloped technology and low capacity utilization rates made all the plants non-viable in the new world, in which Azerbaijan was to exist as an independent state.

In an exclusive interview with BN magazine,Charge d’ Affaires of the Embassy of Azerbaijan to Canada, Ramil Huseynli  has called on Canada  to develop bilateral relations on both an economic and political level with Azerbaijan, saying that the two countries have common interests and mutual respect in line with their strategic partnership.

Since the establishment of diplomatic relations between Azerbaijan and Canada how is this relationship developing today?

After regaining its independence in 1991, Azerbaijan started to pursue a multifaceted foreign policy aimed at establishing relations of friendship and cooperation with all countries based on principles of mutual respect and equality. Given Canada’s middle-power status and its key position in international organizations, it was only logical that Azerbaijan had a special interest in building up relations with this country.

The current relations between Azerbaijan and Canada can be described as friendly and gradually evolving. However, it is worth mentioning that Canada is not actively involved in the geopolitical processes going on in the South Caucasus. Rare bilateral visits could be explained by this factor. The Canada-Azerbaijan Inter-Parliamentary group has been was established in Canada’s Parliament in 2006. Since then, a number of bilateral visits have taken place. The most recent one took place in April 2013 when a Canadian parliamentary delegation led by Mr. Barry Devolin, Chair of the Canada-Azerbaijan Inter-Parliamentary friendship group visited Baku. The delegation was received by President Ilham Aliyev and held meetings with a number of other high-level officials.

According to official statistics, bilateral trade between Azerbaijan and Canada increased from $20 million in 2004 to around $1 billion in 2008. Last year trade reached $500 million, whereas Canadian imports were $473 million and exports $35 million. Our primary trade consists of Azerbaijani crude oil exports to Canada. From Canada, Azerbaijan is importing machinery and mechanical appliances, electrical equipment and miscellaneous manufactured articles. In this connection, our primary task is to promote bilateral cooperation in the non-oil sector and to diversify the structure of trade turnover.

What was the highlight of your partnership with Canada?

The following economic developments are highlights which deserve special attention:

  1. In 2013 Bombardier Transport, a company in the vanguard of the Canadian economy, won a major signalling order from Azerbaijan Railways. In line with the contract worth more than $200 million Bombardier would deliver its signalling solutions on the international Baku-Kars transport corridor connecting Asia and Europe.

  2. On October 20, 2015, Space Systems/Loral (SSL), a subsidiary of MDA Corporation of Canada, was selected to provide a communications satellite to Azercosmos, the national satellite operator of Azerbaijan.

  3. On October 28, 2015, Zenith Energy, Calgary base Canadian energy company, received approval for on-shore oil production in Azerbaijan.

What is the significance of the concluded agreements with Canada?

Unfortunately, bilateral legal framework between Canada and Azerbaijan is scarce. I could only cite the agreement on abrogation of double taxation signed back in 2004 as an ingredient part of this framework. This scarcity in fact reflects the non-intensive character of relations between the two countries.

It is worth mentioning that the expansion of the legal framework follows the pattern of development of bilateral relations. As such, seeing more and more Canadian companies’ business undertakings in Azerbaijan, and vice versa, we are confident that the legal framework will soon receive a boost by one or two intergovernmental agreements. In this light, ongoing negotiations between Canada and Azerbaijan aimed at concluding Investments Protection and Promotion Agreement deserves special mentioning.

Are you optimistic about future business partnership between Azerbaijan and Canada?

Our Embassy pays special attention to the development of cooperation with Canada in the non-oil sector. Our observations show that promising fields in bilateral economic relations are agriculture, information and communication technologies, alternative energy resources, construction, biotechnology and tourism. It would be particularly beneficial for Azerbaijan to utilize Canada’s rich expertise in the agricultural field.

In the meantime, Azerbaijan has an interest in Canada’s bank sphere and other areas related to this sector (crediting etc.). For example, a delegation of the Azerbaijan Mortgage Fund visited Canada in 2010 with a view of getting acquainted with Canada’s expertise in mortgage crediting.

Furthermore, there is a great potential for cooperation in the construction and tourism fields and Canadian companies are interested in cooperation in these areas. Currently, Canadian experts take part in the construction of several tourism and sport facilities in Azerbaijan. Fairmont Baku is an example of a completed project in this regard.

Moreover, according to our observations, great opportunities exist for exporting Azerbaijani products, especially food industry products (fruit juices, olive oil etc) to Canada.

In general, I am optimistic about the future of economic relations between Azerbaijan and Canada. 


Category: Interviews

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