Growing Ties Between Azerbaijan And Uzbekistan - Major Economic Developments Ahead

(MENAFN- Trend News Agency) BAKU, Azerbaijan, August 22. In recent years, the relationship between Azerbaijan and the Central Asian countries has moved beyond friendly neighborly ties to become genuinely strategic. Global shifts have driven Azerbaijan and its neighbors over the Caspian to collaborate more extensively across various sectors. This is not just a strategic partnership in name - it is backed by tangible economic projects of continental importance.

Uzbekistan here is one of the best examples. Baku and Tashkent already enjoy a robust strategic partnership, with each aspect of their bilateral cooperation holding significant importance within the broader framework of their relationship. The consistent and frequent high-level interactions between the two countries underscore the strength and depth of their ties.

Today, the Uzbek-Azerbaijani business forum kicks off in Tashkent. This event will provide a platform for discussing ways to boost trade, share expertise, and forge new partnerships among business leaders.

Let's dive into the key aspects of the strong economic cooperation between Azerbaijan and Uzbekistan.

In 2023, Uzbekistan and Azerbaijan signed a bilateral agreement to establish a $500 million investment fund. During President Mirziyoyev's latest visit to Baku, both sides agreed to increase the fund's capital.

Industrial cooperation between Uzbekistan and Azerbaijan is steadily expanding. Currently, 236 enterprises with Azerbaijani capital operate in Uzbekistan, including 62 JVs and 174 fully foreign-owned businesses. Additionally, 70 Uzbek companies are active in Azerbaijan. The Joint Uzbek-Azerbaijani Investment Fund plays a crucial role in driving this growth. Promising industries for collaboration include silk production, the creation of a textile cluster, the construction of an international school, and food production projects.

Uzbekistan's Minister of Investment, Industry, and Trade, Laziz Kudratov, announced this year that the two countries plan to establish a joint online commercial platform. This platform will enable businesses from both nations to easily connect, facilitating trade transactions and the initiation of joint investment projects. By launching this online platform, Azerbaijan and Uzbekistan aim to provide entrepreneurs with a valuable tool to find the right partners and generate new trade and economic cooperation opportunities.

Moreover, in July, Azerbaijan and Uzbekistan signed a final protocol to strengthen their partnership during the 13th session of the Azerbaijan-Uzbekistan Intergovernmental Commission.

In general, trade turnover between Azerbaijan and Uzbekistan reached over $118.2 million from January to July 2024. In 2023, trade increased by 26.5 percent, totaling $231.6 million. Efforts are now underway to boost trade to $1 billion.

The "Contract on the Establishment of the Supreme Interstate Council between the Republic of Azerbaijan and the Republic of Uzbekistan" was signed during President Mirziyoyev's visit to Baku in August 2023. A total of 20 documents were signed during this visit. Currently, over 180 agreements form the foundation of this productive cooperation.

The leading energy corporations of both countries, SOCAR and Uzbekneftegaz, have been actively working to elevate their collaboration to new heights. In 2023, they successfully established a JV focused on gas trading. In May 2024, Minister Laziz Kudratov announced ongoing negotiations with SOCAR for its involvement in Uzbekistan's oil and gas production projects. Similarly, talks are in the final stages regarding Uzbekneftegaz's participation in gas production projects in Azerbaijan.

Of course, cooperation between the two countries goes beyond traditional energy resources. Recognizing the importance of the energy transition, both Baku and Tashkent are actively working to integrate green technologies into their energy systems. One of the most significant recent achievements is a trilateral agreement between Azerbaijan, Uzbekistan, and Kazakhstan on the transmission of green energy.

A recent agreement between Azerbaijan, Kazakhstan, and Uzbekistan was reached during the inaugural meeting of Central Asian energy ministers in Kazakhstan. The deal focuses on creating a JV based in Baku to export green energy from Central Asia to Europe. This builds on a December 2022, agreement among Azerbaijan, Georgia, Romania, and Hungary to establish an energy corridor from the Caucasus to Europe. As part of this initiative, a 1,195-kilometer underwater cable will be built to transmit green electricity from Azerbaijan, through Georgia and the Black Sea, to Romania, and then on to Hungary and other European countries. The project aims to deliver up to 4 GW of green energy.

In August, following a trilateral meeting in Astana on linking energy networks, Azerbaijan, Kazakhstan, and Uzbekistan signed a protocol. They agreed on the draft Strategic Partnership Agreement for developing and transferring green energy among the three countries, approved the Terms of Reference for the initial feasibility study, and selected the Italian company CESI to conduct it. The agreement envisions exploring options for connecting energy systems, including laying a high-voltage cable along the Caspian Sea bed and in other regions, to optimize the trade of green energy from Azerbaijan, Kazakhstan, and Uzbekistan.

Moreover, Azerbaijan and Uzbekistan, both positioned on key transportation routes, are actively working together in this area. Thanks to President Ilham Aliyev's forward-thinking policies, Azerbaijan has developed crucial transport and logistics infrastructure and is now integrated into international transport networks. This will significantly boost cargo traffic from Central Asian countries, including Uzbekistan, through Azerbaijan. A key development in this regard is the 'Agreement on International Road Transport Relations between the Governments of Azerbaijan and Uzbekistan,' signed during President Ilham Aliyev's state visit to Uzbekistan.

Building strong ties with Central Asian countries is a key focus of President Ilham Aliyev's visionary foreign policy. At the same time, by enhancing cooperation with Europe, Azerbaijan effectively serves as a bridge for connecting Central Asia with the West.

In this context, both current and upcoming joint initiatives between Azerbaijan and its close partner Uzbekistan are set to introduce new transportation projects, advance energy projects, and improve overall infrastructure. These efforts aim to transform the region into a hub of mutual cooperation, benefiting all involved parties. Additionally, these projects will open new opportunities for strengthening interregional connections and creating promising prospects.

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