SANCTIONS ARE NOT AN OBSTACLE FOR FRIENDS

Azerbaijan and Russia will continue the development of trade and economic relations despite the American sanctions imposed on April 6, 2018 against 15 companies and 24 citizens of Russia.

However, Baku has never joined the sanctions campaign against its neighbours and remained committed to the policy of good-neighbourly relations in the region. The recent statement by the Aide to the President of Azerbaijan, Ali Hasanov, also underlines this commitment: "Baku does not join any Western campaigns and sanctions related to neighbouring states. It also prevents the use of its territory as a platform against any countries," wrote Ali Hasanov on his Facebook page.

Main partner in non-oil sector

Obviously, any partnership between states has always been based on deep and unconditional interweaving of political and economic interests. Economic relations between Azerbaijan and Russia have always been positive for mutually beneficial cooperation.

In fact, the trade interests of the U.S. and EU in Azerbaijan are mainly focused on products of the oil and gas sector. Russia is the largest importer of non-oil products from Azerbaijan. According to the Minister of Economy of Azerbaijan, Shahin Mustafayev, the volume of trade turnover between our countries in 2017 increased by 22%, while the export of Azerbaijani products to Russia grew by 42%. His Russian counterpart Maxim Oreshkin added that since the beginning of 2018, the export of Azerbaijani goods to Russia has increased by 50%, while the export of the CIS countries is 6%.

According to Mustafayev, in the next five years Azerbaijan is going to triple the volume of exports to Russia according to the development plan of Azerbaijani economy presented to Russian in order to coordinate the activities of the economic departments of our countries. To achieve this ambitious goal, both the governments and the business community of Russia and Azerbaijan take important steps. In particular, it is planned to establish an excise customs post on the border of Azerbaijan and the Russian Federation, which will simplify the export of tobacco products and alcoholic beverages from Azerbaijan to Russia. Thus, Azerbaijani products will be exported to Russia directly bypassing the Georgian territory. Mustafayev said that the Russian side agreed to the opening of an excise post in the shortest possible time.

In addition, the growth of mutual trade will be facilitated by the construction of a motor road bridge on the border of Azerbaijan and Russia across the Samur River, which will be completed next year.

Nevertheless, the governments of Azerbaijan and Russia are mainly focused on the organization of joint production enterprises designed to sell their products to third countries.

For instance, the agreement with the Russian GAZ Group (a branch of the Basic Element Industrial Group) for the assembly of low-tonnage GAZ trucks at the Hajigabul Industrial District is a clear indicator of this approach. According to Mustafayev, Azerbaijan and Russia are interested in launching joint petrochemical engineering enterprises at the Sumgait Technopark.

In addition, there is potential for expanding cooperation in the investment sphere. "A number of projects have been implemented so far. At the end of 2018, we laid the foundation of the pharmaceutical plant and the packing division of the enterprise," added Mustafayev.

Regional projects

Certainly, the regional projects with active involvement of both countries are the most promising. For example, 100 thousand tons of cargo were transported from Russia to Iran through the international transport corridor North-South by the end of the first quarter of 2018. As noted by Shahin Mustafayev, there is considerable potential for increasing the cargo flow along this corridor. Incidentally, a great deal of work has been done during the last two years to open the railway line between Azerbaijan and Iran: in 2016-2017, the missing section of the railway was constructed in Azerbaijan including a bridge over the Astara River and the railway section between Astara (Azerbaijan) and Astara (Iran). The construction of a cargo terminal at the Astara Station (Iran) is nearing completion. According to the agreement signed on March 27, 2018, Azerbaijan allocated $500 million to Iran for the construction of the Astara-Rasht railway, which will play an instrumental role in the implementation of the North-South transport corridor.

By the way, Azerbaijan Railways CJSC has received more than 200 applications for cargo shipment services through a new partially constructed cargo terminal at the Astara Station of Iran. It is envisaged to deliver cargo not only to the domestic market of Iran, but also to the markets of Syria and Iraq. Currently, Russia mainly exports timber to Azerbaijan. In the future, it will be possible to transport fruits from Iran to Russia as well.

As noted by the Russian Minister of Economic Development, Maxim Oreshkin, the North-South corridor allows the supply of products from India to Europe through Iran, Azerbaijan, Russia, as a combination of sea, road and rail transport. According to him, the entire chain is a very complex project, and no country, let alone the company will be able to implement it separately.

Complementarity of economies

According to Oreshkin, the economies of our countries complement each other. In particular, if Azerbaijan has a population with a high proportion of younger generation, Russia suffers from a noticeable shortage of personnel.

Today, the leaderships of Azerbaijan and Russia are taking active steps to bring the peoples of the two countries closer. One of the directions is tourism. Currently, the work is underway to increase the visits to Azerbaijan and Russia by citizens of both two countries; projects are being implemented to provide information to the population, and to expand the places of recreation for citizens of the two countries.

According to Azerbaijani statistical data, the tourist flow to Azerbaijan grew by 20% in 2017 compared to 2016 (up to 2.7 million people). Russian tourists are on top of the list - 0.8 million people.

It is noteworthy that a memorandum on cooperation was signed between the tourist resort centre Shahdagh (Azerbaijan) and Resorts of the North Caucasus OJSC (Russia) during the recent visit of M. Oreshkin to Baku. In other words, both parties agreed to work out specific ideas to increase the tourist flow.

In the humanitarian sphere, it is planned to open a branch of the Moscow State Institute of International Relations (MGIMO) in Baku. Also, the Master Degree Program with biennial training will be launched after the completion of higher education. In general, the supply of products from Azerbaijan allows us to concentrate on the production of more competitive goods in Russia.

In fact, the deeds of Azerbaijani leadership demonstrate that the pressure of third countries in our relations with Russia is unacceptable for us. The only guiding aspect of our relations is the national interests of Azerbaijan, which are explicitly expressed in economic cooperation with Russia.