(MENAFN- Trend News Agency) BAKU, Azerbaijan, December 28. Middle Corridor
still lacks some pieces of infrastructure and some of its parts are
not developed, Antonio Nucifora, Practice Manager for the
Macroeconomics, Trade and investment in Europe and Central Asia
Region of the World bank Group, said in an exclusive interview with
trend.
'Most of the trade between China and Europe was happening
through the Northern Corridor, which eventually goes through
Russia. And now with the war in Ukraine and the sanctions on
Russia, significant part of this trade shifts towards the Middle
Corridor, which essentially passes through Central Asia and the
Caucasus, again, linking China to Europe. The geographical location
on the East-West trade route, connecting Europe and China, opens up
a lot of opportunities for Azerbaijan. The first one is of course,
related to transit shipments. The transport and logistics, the
demand for services in this sphere can contribute to economic
growth in Azerbaijan. The strategic location on the Middle Corridor
also enables Azerbaijan to become more attractive to global value
chains, and be able to be better integrated in global value
chains,' he said.
Nucifora went on to add that in a globalized world, there are
some leading firms that invest in countries, which they use as a
hub for production to access global markets.
'Different pieces of products are produced in multiple countries
and then assembled together. Now some of these big foreign
investors may be encouraged to come to Azerbaijan, taking advantage
of this country's connection to the global markets, China and
Europe,' he explained.
Nucifora believes that the geographical advantage will help
Azerbaijan attract investment and get more integrated into the
global market.
'Indeed, the Middle Corridor is not functioning very well at
present. That's why most of the traffic in the past was passing
through the Northern Corridor. The reason is that the Middle
Corridor still lacks some pieces of infrastructure and some of its
parts are not developed. So, in order to reduce the costs of using
the Middle Corridor for trade, Azerbaijan will need to coordinate
with major partner countries such as Georgia and Kazakhstan, to
invest in the infrastructure needed to make the corridor more
operational. Secondly, Azerbaijan also needs to look very carefully
at reducing the barriers for trade in terms of the procedures at
the borders, especially for transit shipment. This in fact is part
of the bigger issue related to the importance of a new growth model
based on a dynamic private sector. Because in order to achieve
that, there is going to be a need for Azerbaijan to act in at least
three directions. First, it is about creating by all means an
environment for private sector to flourish, ensuring a level
playing field, where markets are contestable. The second one is an
environment where you can attract investments. Of course,
Azerbaijan has a strong track record, when it comes to attracting
investors in the energy sector,' he said. The third is about
integration into the global markets, according to Nucifora.
'There is no country in the world that has achieved high income
status without being integrated into global markets. When you are a
small country, you have a small domestic market with a relatively
limited population size. Having access to global markets to be able
to sell to a much bigger scale remains fundamental. Therefore, to
develop globally, smaller countries need to have integration into
global markets, which becomes an engine, a pathway to growth,' he
added.
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