Brand-New Horizon For Azerbaijan-Uzbekistan Relations - Run-Up To President Shavkat Mirziyoyev's Visit To Baku

Amidst the ongoing global uncertainty and persistent confrontations in various spheres, relations between Azerbaijan and Uzbekistan has consistently maintained a strong sense of stability. The strategic alliance between Baku and Tashkent has consistently held paramount significance for both countries.

And the visit of President of Uzbekistan Shavkat Mirziyoyev to Azerbaijan scheduled for August 22-23 is another proof of this thriving cooperation.

In June 2022, when President Ilham Aliyev visited Uzbekistan, a series of significant agreements were signed to outline the future trajectory of the bilateral relationship. Notably, the Declaration on Deepening Strategic Partnership and Increasing Comprehensive Cooperation was among these, heralding a fresh phase in bilateral ties. This declaration highlights pivotal areas of collaboration, including the increase of trade and industrial cooperation. Beyond this, the shared commitment extends to enhancing transport and logistics networks, jointly fostering agricultural sector growth, and prioritizing cooperation within the military and military-political domains. As of today, over 160 agreements compile the basis for this productive cooperation.

Mutual economic interests only strengthen bilateral relations. Thus, Uzbekistan and Azerbaijan can provide each other with unique opportunities to provide access to new markets. Due to the geographical location of Uzbekistan, Azerbaijan can access Asian markets, while Azerbaijan can provide access to European markets for the Uzbek side.

The Trans-Caspian International Transport Route (TITR), referred to as the Middle Corridor, stands as the pivotal conduit for global trade, presenting a spectrum of challenges and prospects for both nations. The potential benefits are clear, as engagement in this initiative empowers Baku and Tashkent to amplify their economic capabilities, while also affording them the avenue to expand their political influence on the international stage.

In 2022, the volume of mutual trade between Uzbekistan and Azerbaijan showed a significant increase year-on-year - from $118.9 million up to $181.2 million (52.4 percent growth). Over the first half of the current year, the trade turnover between the two countries reached $84.6 million, which is an increase of 1.7 percent year-on-year.

Meanwhile, the number of joint ventures over the recent years has surged significantly. As of July 1, 2023, there are 204 enterprises with Azerbaijani capital in Uzbekistan (compared to 71 in 2017), of which 67 are joint ventures and 137 are foreign enterprises. Some 22 joint ventures have been established since the beginning of the current year.

Earlier this year, the parties have inked an intergovernmental agreement to initiate a joint investment fund with a value of $500 million. This fund is poised to hold substantial importance in fostering economic cooperation, facilitating the execution of fresh cooperative investment endeavors, and contributing to the generation of novel employment opportunities.

Uzbekistan has actively engaged in the reconstruction efforts in Karabakh, which was liberated from Armenian occupation in 2020. President Shavkat Mirziyoyev, addressing an informal summit of the Turkic Council in March 2021, conveyed the country's willingness to contribute to the reconstruction endeavors in the liberated territories. This contribution primarily encompasses the restoration of historical landmarks, mosques, as well as cultural and educational establishments. The country has been involved in the construction of a modern school with a capacity of 960 students in the Fuzuli district, which is expected to be commenced during Mirziyoyev's visit to Azerbaijan.

Energy cooperation stands as a notable cornerstone in the mutual relations between these two countries, encompassing both fossils and renewable energy sources. Presently, Azerbaijan and Uzbekistan are engaged in discussions aimed at fostering a partnership centered around renewable energy resources. Of particular focus is the prospective creation of a joint venture for manufacturing essential components for green energy production.

The leading energy corporations of the both countries, namely SOCAR and Uzbekneftegaz, have been engaged in discussions aimed at elevating their collaborative efforts to an unprecedented extent. In the current year, these companies have already successfully forged agreements to establish a joint venture focused on gas trading. Additionally, they have solidified plans for the involvement of Uzbekneftegaz in Azerbaijan's oil and gas initiatives, and vice versa.

Forging robust cooperation with Central Asian countries stands as a fundamental cornerstone within President Ilham Aliyev's visionary foreign policy. Simultaneously, through improving productive cooperation with Europe, Azerbaijan effectively assumes the role of a conduit for facilitating the integration of Central Asia with the West.

In this context, both the existing joint initiatives and those on the horizon between Azerbaijan and fraternal Uzbekistan are poised to unveil new transportation projects, foster energy projects, enhance the overall infrastructure potential, thus transforming the region into a hub of mutual cooperation that generates advantages for all the actors engaged. These endeavors concurrently forge new avenues for fortifying interregional connections, paving the way for promising prospects.

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